The Asia Pacific region, with around 4.7 billion people, is home to nearly 60% of the world’s population, making it a crucial market for insurers and insurtech platforms. Bolttech, a company launched in early 2020 but with already a presence in 26 markets worldwide, is one of several firms seeking to tap into the region’s burgeoning insurtech market demand.
The rapid urbanization of the region and expansion of its middle class are two main reasons behind the spurt in demand for insurance protection. Middle class households are more likely to set money aside and plan for the future, including paying into protective coverage. These consumers are also more likely to buy more expensive items such as cars or motorcycles, driving up the demand for non-life policies.
Bolttech provides an insurance exchange that connects insurers, distributors, and customers to buy and sell different insurance and protection products. The platform allows clients to offer financial products that may not be in their area of specialization by partnering with other providers. It also enables non-insurance companies to provide insurance coverage for their customers.
By joining the digital marketplace, insurers can access a large user base of potential customers. Users can access a wide range of financial products to compare different options, making it easier for them to buy insurance and protection products.
Bolttech also offers device protection and other digital insurance products in countries like Malaysia, Thailand, Vietnam, Singapore, and Indonesia. The firm is already one of the largest cell phone insurers in Southeast Asia, the company’s CEO, Rob Schimek, told KrASIA.
“[Cell phone insurance] is usually the first experience a customer has with Bolttech. We then connect customers to our insurance exchange platform and offer them insurance protection for all their home electronics, as well as auto, home, or life insurance,” he said.
Currently, Bolttech serves more than 7.7 million customers around the world. It counts over 150 insurance providers and 700 distribution partners on its platform, including Philippines-based mobile payment wallet PayMaya, Thailand-based Rabbit Line Pay, as well as e-commerce firms Lazada and Tiki in Vietnam. Over USD 5 billion worth of insurance premiums was transacted through the Bolttech platform in 2020, Schimek said.
Bolttech is a subsidiary of Pacific Century Group, an Asia-based private investment group with interests across three core businesses—technology, media and telecommunications, and financial services and property.
In July, the Singapore and Hong Kong-based insurtech company reached unicorn status after bagging USD 180 million in a Series A funding round led by Activant Capital Group. In September, the firm collected an additional USD 30 million from EDBI and Mundi Ventures to bring the total funding round to USD 210 million.
Racing for regulatory compliance
Bolttech faces competition from local players across the region, including Singapore-based firm Singlife, Chinese online insurer ZhongAn, and India-based Go Digit General Insurance. As of August, there were at least 335 private insurtech firms operating in the APAC region, with about 67 of them based in Southeast Asia, according to S&P Global Market Intelligence data.
Investors are pouring capital into digital marketplaces that drive business to existing insurance carriers, according to a study by S&P Global Market Intelligence, which analyzed 56 insurtech companies in the APAC region that disclosed at least USD 10 million of capital raised via private placement deals. What’s more, the rapid growth of Southeast Asia’s digital economy opens an opportunity worth over USD 10 billion in insurance premiums over the coming five to ten years, according to Boston Consulting Group and ZA Tech.
“We intend to continue building out our capabilities and our licenses across Asia, including North Asia and Southeast Asia. We hope to have that capability largely in place by 2022. We want to extend our existing global market leadership position into the Asian marketplace to make sure we are the undisputed leader,” Schimek said. He revealed that several more broker licenses “are in the pipeline,” and should be granted by the end of 2021.
The APAC market holds several challenges for insurance providers, including intensifying regulations and economic uncertainty, according to a report by consulting firm Ernst & Young.
“One of the first things we focus on is the governance side of the equation. Bolttech operates with very careful consideration of all legal requirements and best practices in all the countries. We’re continually strengthening our governance systems, infrastructure, and protocols across markets.” Asia is a “fragmented market with remarkable complexity,” he said.
Schimek didn’t reveal specific financial information but mentioned that the firm will “need more capital” in the future. Whether a capital injection could come from a Series B round or the public market will depend on timing and the amount of capital needed, he added.
“We are keeping all of our options open, so there is a possibility that Bolttech will one day pursue a listing in the public market,” Schimek said.
