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How an Indonesian startup sold insurance in a country that didn’t buy insurance

How an Indonesian startup sold insurance in a country that didn’t buy insurance

Cleosent Randing is the founder and CEO of PasarPolis, an Indonesian insurance startup that had served one billion policies to 80 million customers by 2021. PasarPolis has expanded in Southeast Asia, and also partnered with online marketplace Shopee and smartphone producer Xiaomi to provide device insurance.

At the time PasarPolis was founded, insurance penetration in Indonesia was lower than 3%. What were some of the reasons for the low numbers of people with insurance?

I think the biggest factor is the lack of insurance literacy as most people simply aren’t aware of the importance of insurance. In Indonesia, many people tend to be reluctant in purchasing insurance protection. For low-income families, this, unfortunately, means that even tiny setbacks such as a broken phone or a sudden trip to the emergency room can hugely impact their savings if they fail to protect themselves.

We’re continuously educating the market, focusing on improving insurance literacy, not only in Indonesia but across Southeast Asia. This will be one of our key priorities in the coming year, especially amid the increasing awareness of day-to-day protection due to the pandemic.

What strategies did PasarPolis pursue that differentiate the company from how insurance has traditionally been done in Indonesia?

We’re addressing the stigma of the challenges often linked with insurance: high premium costs, lack of accessibility, and complicated processes from purchase to claim. PasarPolis solves these problems with technology. 

By specializing in microinsurance, we are able to provide low-priced coverage solutions for any type of risk, from accidents to broken gadgets. We created an embedded system that allows us to distribute insurance through partner channels, such as ride-hailing apps (Gojek), e-commerce firms (Shopee, Bukalapak, Lazada, Blibli, and Pegipegi), fintech companies (Dana, Home Credit), consumer electronic companies (Xiaomi and ITGallery), furniture companies (Ikea), and travel platforms (Traveloka). 

For platforms like Shopee, point-of-sale insurance is seen as an additional value proposition to further boost device sales, and device insurance take-up rates have gradually increased month-on-month. Technology in general has allowed us to deliver a better customer experience as well. Our cloud-based platform enables us to quickly integrate with partners and also helps process claims more efficiently. 80% of our total claims are resolved within 18 seconds. 

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We’ve previously reported on e-commerce companies partnering with roadside stands in Indonesia. Can you explain how PasarPolis’ mitra insurance model works? 

For decades, insurance agents were undeniably the most dominant and well-known distribution channel for insurance products in Indonesia. This is why PasarPolis decided to operate a mitra model, where offline agents, such as mom-and-pop shop owners, can facilitate insurance product purchases on our digital platform. This helped us reach Indonesians who didn’t have easy access to the digital economy. With over 60,000 mitras onboarded in our platform, this model has successfully made us one of Indonesia’s fastest-growing agencies in 2021. We were able to increase the number of policies we sold per month by over five times, selling 25,000 policies last year through our mitras.

Ultimately, our goal is to revolutionize the insurance market in Indonesia. We knew we had to have an unparalleled digital distribution presence in the country. Collaborating with mitra agents has allowed us to ensure our products are deeply embedded in our customers’ daily activities.


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