Igloo provides affordable and accessible insurance solutions in Indonesia
They aim to triple the company's growth through product launches and partnerships in 2023.
When Igloo entered Indonesia through a collaboration between Sompo Indonesia and Axinan in mid-2019, they wanted to position themselves as an insurtech that could answer micro-customer needs and be easily accessible. Because, according to Igloo, affordability and accessibility are still the main challenges in Indonesia.
Based on data from the Financial Services Authority (OJK), the insurance penetration rate in Indonesia in 2021 only reached 3.18%. In terms of premium income growth in the insurance sector in January-November 2022 it only grew by 0.44% compared to the previous year. It is hoped that the presence of insurtech with its technological innovations will encourage increased use of insurance products, which are still low.
"Igloo has microinsurance products that can be tailored to the unique needs of micro customers, so they have a more affordable cost. In addition, Igloo also implements an embedded insurance model that can be accessed through a digital platform that is often used in Indonesia," said Henry Mixson, Indonesia Country Manager for Igloo, to Insurance Asia.
Igloo partnered with the DANA digital wallet to provide 'Gadget and Gamer's Health Protection' insurance products as well as e-commerce Bukalapak to offer several insurance products such as for transit, electronics and good protection.
Igloo sees that most insurance companies in Indonesia still use traditional methods which can take a long time, so this insurtech wants to speed up the insurance process from product discovery to claim settlement through a single digital platform or embedded insurance model.
This model, said Henry, allows Igloo to move faster in developing new insurance products to integrate, resulting in a shorter turnaround time than traditional insurance players.
"We see that the claim settlement process is still another issue that is often faced by the Indonesian people. In settlement of claims, delays can be caused by manual damage assessments, contested claims, and abusive claim settlement tactics," said Henry.
Therefore, Igloo implements smart-claims management systems to make the insurance claim process more efficient and reduce manual processes. "By leveraging big data management plus machine learning and AI, we are able to assess risk to bring down anti-selection claims, false positives and fraudulent claims," he said.
Igloo innovation in Indonesia
To provide easily accessible insurance products, Igloo launched Ignite by Igloo in Indonesia last year. Indonesia is the second country where this product is launched after Vietnam.
Ignite by Igloo is an AI-powered platform to increase the productivity of insurance sales partners. This platform provides several services in one application, which makes it easier for partners to access, unites sales data and customer data, provides real-time updates to customers including claims, settlement and policy renewals, and discover, compares products so that they can offer insurance products that customers need. "For example, the FastQuote feature can shorten the purchase flow by calculating premiums and generating quotes within a few seconds, which speeds up partner reports," said Henry.
According to him, the launch of the Ignite platform was motivated by the fact that many insurance companies had digitized their operations, but had not yet reached their insurance sales partners, who were still working manually, so Igloo wanted to speed up the partner's work process.
Igloo has also made insurance products that are easily accessible by collaborating with e-wallet platforms which, according to the Populix research institute, are number two most used in Indonesia, namely DANA in insurance products "Mobile Phone Screen and Gamer's Protection". This product can be accessed exclusively through the DANA application. This collaboration, said Henry, provides affordable and easy access to microinsurance, especially for cellphone users and e-sport players whose number continues to increase. The global gaming industry, Igloo notes, is on the rise and Southeast Asia accounts for more than 50% of that growth.
"Gamer's Protection" insurance is offered at an affordable price, which costs $0,07 or IDR1,000 and can provide benefits of up to $65,52 (IDR1 million) for heart attacks or carpal tunnel syndrome. The launch of this product was based on data that shows Indonesian people' spending an average of 8.5 hours each week playing games, so in the long term it could cause health problems.
Customers can obtain protection for themselves or their children through the DANA application where customers will be directed to choose benefits that suit their lifestyle. This 'Gamer's Protection' product has just been awarded 'Product of The Year' by the Insurance Asia Award 2022.
What's next for Igloo?
Going forward, Igloo is eyeing the possibility to launch Weather Index Insurance in Indonesia, which has already been launched in Vietnam. This product uses a smart contract-based blockchain to automate insurance payouts using pre-assigned values from weather events and natural disaster losses.
"We are looking at the possibility of implementing this innovation in Indonesia, as a country with the 3rd largest rice granary in the world, to support paddy farmers and Indonesian specialty product farmers such as coffee who have not been covered by insurance," said Henry.
He added that the product innovation launched by Igloo could help the company's business development. “We conceptualize the product through a combination of market research and inherent demand from our digital distribution partners. Once we identified the existing issues we then found opportunities to escalate this product beyond its origins and push it into our inclusive insurance agenda in the region," he said.
Igloo is still looking for the right partner before launching this product in Indonesia. Last year, Weather Index Insurance was launched in Vietnam with a premium of $9/hectare and a minimum coverage area of 0.1 hectare.
He added that the product innovation launched by Igloo was carried out through a combination of market research and requests from digital distribution partners. "Once we identified the existing problems we then found opportunities to scale this product out and push it into our inclusive insurance agenda in the region," he said.
Igloo plans to expand partnerships with sectors such as telecommunications, cybersecurity, e-commerce, travel and financial services. Currently, Igloo already has strong cooperation with more than 55 companies in 7 countries in Southeast Asia, where according to Igloo, the level of underinsurance in the region is quite high. With insurance gaps in Indonesia, Thailand, Vietnam and the Philippines of $23 billion.
To continue to expand, this insurtech will continue to try to grow the team, focus on consolidating teams in each country, and focus on insurance processes and products. "I would not say there are no challenges in developing innovation. However, we see innovation as our opportunity in the midst of traditional insurance. We try to launch insurance products that suit customer needs," he said.
Since 2019, Igloo has distributed more than 300 million policies and has increased its gross premium 30 times. In Indonesia, Igloo is targeting to triple the company's growth this year, through product launches, cooperating with more distribution partners and meeting more customer needs.
“With the advancement of our technology adoption, we can offer unconventional but on-demand insurance products,” said Henry.