Singapore-based insurtech firm Igloo sees Southeast Asia as a high-potential market due to its low insurance penetration, rising income level, increasing awareness about insurance, its Co-Founder said.

“There is a lot of room to grow due to the low insurance penetration. On top of that, the rising income levels and digital savvy-ness are reassuring for insurtechs like Igloo, demonstrating an even higher growth potential,” Raunak Mehta, who is also the Chief Executive Officer, told TechNode Global. “Awareness of insurance is increasing, with more and more consumers looking to protect themselves against financial stress.”

Founded in 2016, Igloo’s key markets include Vietnam, the Philippines, and Indonesia. The insurtech firm is also in other markets such as Singapore, Malaysia, and Thailand.

Mehta said through the company’s proprietary technology and partners in the key markets, Igloo is able to develop innovative microinsurance products designed to meet underserved needs and address emerging risks that are often overlooked by traditional insurance providers due to their high-risk nature or lack of data.

Besides car insurance and personal accident insurance, Igloo also offer insurance products for rice farmers, coffee farmers, gamers, gig workers, phones and pets, among others.

Igloo announced in November last year it has raised an additional $27 million in its Series B extension, bringing a close to its Series B funding round at $46 million. Igloo said then the initial Series B capital raise of $19 million in March 2022 was led by Cathay Innovation, with further investments from ACA and other existing investors including OpenSpace. This round of investment announced in November 2022 roped in investors including BlueOrchard, Women’s World Banking Asset Management (WAM) and Finnfund.

The InsuResilience Investment Fund II, initiated by German development bank KfW on behalf of the German Federal Ministry for Economic Cooperation and development (BMZ) and managed by impact investor BlueOrchard Finance Ltd., led the capital extension, along with WAM, Finnfund, La Maison, and Series B lead investor, Cathay Innovation.

Igloo has raised a total of $62 million in funding over three rounds, data from Crunchbase showed.

Igloo develops its insurance products and then partners with insurers who underwrite their policies. Igloo works with 20 global, regional and local insurers across Southeast Asia. It distributes its insurance products through partnerships, and partnered with over 55 companies in seven countries, TechCrunch reported last November. It has facilitated more than 300 million policies and increased gross written premiums by 30 times since 2019, according to the report then.

Mehta, who was promoted as CEO last year, has extensive experience in the e-commerce and technology space, having held leadership roles at e-commerce brands such as Flipkart and ZALORA Group. Joining Igloo in 2018 as Chief Commercial Officer, Raunak has spearheaded the company’s market entry into the Philippines, Vietnam, Thailand, Indonesia, Australia and Malaysia, while establishing partnerships with industry leaders such as Lazada, Shopee, Bukalapak, AIS, RedDoorz, and Foodpanda across a range of insurance products.

In the interview, Mehta also shared about Igloo’s plans and strategy after the fundraise last year. He also shared his views about the insurance industry in Southeast Asia, the challenges Igloo faces expanding in the region and the company plans to address these challenges, among others.

Below are the edited excerpts:

There are more insurtech firms offering insurance products online. What is Igloo’s competitive advantage against other insurtech companies?

We have the right technology, expertise, and network of partners that have enabled us to launch numerous unique and pioneering microinsurance products to support this mission. Through our proprietary technology and partners in our key markets, we are able to develop innovative microinsurance products designed to meet underserved needs and address emerging risks that are often overlooked by traditional insurance providers due to their high-risk nature or lack of data.

For example, Gamers’ Insurance is an emerging risk given the rise of esports in Indonesia. With long gaming hours, there comes the risk of repeated stress injuries, and we protect gamers against them. Similarly, our new Safe Dining Plan (coverage food poisoning) stems from the increased propensity of Indonesians to seek dining out experiences.

What’s next for Igloo after its product launches in June?

We are always looking to launch new products, but they need to bring benefits to the customers. As usual, we will analyze the market and identify what the customers need before making these decisions. For now, we are looking for partnerships that enable us to extend our products beyond their current markets and/or coverage.

One example is weather index insurance. We are looking to extend it to protect more farmers in more countries against more indices. We recently extended it from rice farmers to also protect coffee farmers in Vietnam.

Another example of a product we are looking at extending is our mobile phone insurance. We started out with protection for screens but also partnered with Viettel Store and Sendo in Vietnam last month to protect phones from Accidental Damage and Liquid Damage.

Igloo has a different focus on each of the markets it is operating in. Could you further elaborate on this? How does Igloo decide what kind of products to be launched in its markets respectively?

Indonesia, Vietnam, and the Philippines are our three key markets in Southeast Asia. These markets have a lot of room for insurance penetration growth, and with an emerging middle-class, ever-improving economy, and increasing digital adoption, insurtechs like Igloo have a significant role to play.

We conceptualize our product offerings through a combination of market research and inherent demand from our distribution partners. This allows us to identify common pain points in each market, after which we make a decision whether to scale our products to markets outside of their origin to drive our agenda for inclusive insurance. The understanding of local pain points in each market also helps us to develop new products that can address those pain points and emerging risks.

Can you share more about Igloo’s strategy?

Our hyperlocal market knowledge allows us to work with partners to develop and launch microinsurance products at rates that are accessible and affordable. For example, we recognize the increased vulnerability of gig workers when the pandemic hit, and pivoted to launch PandaCare in Thailand, later extending it to Singapore and the Philippines.

An example of accessibility would be our partnership with Circle K – making Igloo the first to sell general products through convenience stores in Southeast Asia – this goes a long way in making insurance accessible.

Could you please share more about pet insurance and gamers’ insurance? Are these products only available in certain markets? Is there any plan to introduce these products into other markets? What’s your game plan?

Pet Insure and Gamers’ Insurance are two of our most popular products. In fact, Gamers’ Insurance is an award-winning product, winning ‘New Insurance Product of the Year Indonesia’ at the Insurance Asia Awards 2022.

Gamers’ Insurance is available in Indonesia at the moment and protects enthusiasts of one of the booming global industries. The rise of mobile gaming in Indonesia also brings serious health concerns brought about by extended periods of gaming. With Gamers’ Insurance, we provide coverage against common gaming-related health conditions like carpal tunnel syndrome and cardiac arrest.

Pet Insure was created in collaboration with Malayan Insurance and GCash in the Philippines to offer convenient security. Through Pet Insure, Igloo provides medical reimbursement, personal accident cover, and owner’s liability coverage.

We are always on the lookout for opportunities to extend our products to new markets. This is based on a number of factors like demand and strategic partnerships.

Igloo’s last fundraising was its Series B funding round in November 2022. How soon would Igloo need to raise funds again?

There is no immediate need to raise funds. However, we continuously evaluate fundraising opportunities that align with our business strategy and future growth aspirations.

Would you be able to disclose Igloo’s valuation? (or revenue growth or other latest financial numbers?)

Igloo has continued to grow since it was first established. We have grown our strategic partnerships base across all our key markets and also made many additions to our catalog over the last two years. We have expanded our presence in Asia Pacific, establishing operations in Singapore, Malaysia, Thailand, Indonesia, Vietnam, and the Philippines, including the opening of tech and data centers in India.

What are the opportunities and potential Igloo sees in Southeast Asia?

Southeast Asia as a whole is a high-potential market. In particular for insurance, there is a lot of room to grow due to the low insurance penetration. Furthermore, the rising income levels and digital savvy-ness are reassuring for insurtechs like Igloo, demonstrating an even higher growth potential.

Awareness of insurance is increasing, with more and more consumers looking to protect themselves against financial stress.

Does Igloo have preferred markets among the countries in the region?

So far, our key markets are Vietnam, the Philippines, and Indonesia. We are also in Singapore, Malaysia, and Thailand, but the key markets are the ones where we see the biggest potential.

Do you have any preferred segment(s)?

Our products are targeted to the underserved large population of low-middle income classes where there is significantly low insurance literacy which subsequently impacts insurance penetration. To increase penetration, we offer easy-to-purchase and understand microinsurance and general insurance products that address emerging and often unaddressed risks.

Insurance industry is a highly-regulated industry in most of the countries. Are there any regulatory hurdles Igloo encountered and how does Igloo overcome these hurdles (if there are any)?

In the insurance industry, regulations play a crucial role in safeguarding policyholders’ interests. We collaborate closely with insurers, leveraging technological solutions to help them meet regulatory requirements effectively. For example, insurance players across Southeast Asia are being encouraged by the public sector to embrace digital solutions.

By doing so, we aim to enhance accessibility and affordability in insurance, ultimately leading to a higher insurance penetration rate, benefiting individuals and businesses alike.

What are the challenges Igloo faces expanding in the region? How does Igloo address these challenges?

The biggest challenge is the lack of financial literacy region-wide. While the situation is improving and people are increasingly aware of insurance, there is a lot of room for improvement. This can hinder insurtechs like Igloo from scaling businesses and expanding into different markets. Especially with our goal of ‘Insurance for All’, this creates a natural barrier to the achievement of it.

What we do at Igloo to address this challenge is to find the root of the problem. Complexity, lack of accessibility, and affordability are all factors that make people hesitate when it comes to purchasing insurance.

We use technologies like AI and blockchain to make insurance as simple as it gets. Claims management and purchase processes are simplified through smart contracts, for example in weather index insurance. We also use AI to calculate premiums and prices tailored to each specific customer. Microinsurance helps us to address affordability and through our various partners, we make insurance accessible too.

Some say the insurance industry is the least tech-disrupted industry. What’s your view on this?

I hold a different perspective on this statement. There are many insurtechs [that are] successfully disrupting the industry and using technology to improve customer experience and making insurance more accessible.

We use technologies like AI, machine learning and blockchain to simplify the claims process, improve the efficiency of operations and risk management which long been a pain point for insurers. Our weather index insurance in Vietnam, which protects rice and coffee farmers against losses incurred due to irregular rainfall, uses blockchain-based smart contracts to calculate claims in real time and automatically provide the most accurate payouts and premiums.

We also use AI in our dynamic pricing models, to ensure no customer has to pay more than they deserve to.

To conclude, there is tech disruption in the industry for sure, and I am excited to see new and emerging technologies will disrupt it even further. Keeping up with technology is essential for insurers and insurtechs to thrive.

Singapore’s Igloo raises additional $27M, bringing Series B total funding round to $46M