Choosing an insurance policy is one of the most complicated financial decisions a person can make. Jakarta-based Lifepal aims to simplify the process for Indonesians with a marketplace where users can compare policies from more than 50 vendors, get help from licensed agents, and make claims. The startup, which it claims to be the largest direct insurance market in the country, announced today that it has raised $ 9 million in a Series A. The round was led by ProBatus Capital, a Prudential Financial-backed venture capital firm involving Cathay Innovation and returning investors Insignia Venture Partners, ATM Capital and Hustle Fund.
Lifepal was founded in 2019 by former Lazada executives Giacomo Ficari and Nicolo Robba as well as Benny Fajarai and Reza Muhammed. The new funding brings the total to $ 12 million.
The marketplace partners currently offer around 300 policies for life, health, motor vehicle, property and travel insurance. Ficari, who also co-founded Neobank Aspire, told TechCrunch that Lifepal was created to make comparing, buying, and applying for insurance as easy as shopping online.
“The same experience that a customer has today in a marketplace like Lazada – the convenience, all digital, fast delivery – that we saw was missing in the insurance company, which is still face-to-face with offline brokers like 20 to 30 Operated years ago, “he said.
Indonesia’s insurance penetration rate is only around 3%, but the market is growing with the country’s gross domestic product thanks to a larger middle class. “We are really at a turning point in GDP per capita and a lot of insurance carriers are more focused on Indonesia,” said Ficari.
Other venture capital backed insurtech startups that are capitalizing on this demand include Fuse, PasarPolis, and Qoala. Both Qoala and PasarPolis focus on “micro-guidelines” or inexpensive coverage for things like damaged equipment. PasarPolis is also working with Gojek to offer drivers health and accident insurance. Meanwhile, insurance specialists are amalgamating an online platform to conduct their business.
Lifepal takes a different approach as it does not sell micro-policies and its marketplace allows customers to purchase directly from vendors rather than through agents.
According to Lifepal data, around 60% of health and life insurance customers are buying insurance for the first time. On the flip side, many auto insurance buyers already had policies but their coverage had expired and they decided to shop online instead of going to an agent for a new one.
Ficari said Lifepal’s target customers overlap with the investment apps that are gaining traction in Indonesia’s growing middle class (like Ajaib, Pluang, and Pintu). Many of these apps have educational content as their customers are typically first-time investing millennials, and Lifepal is taking a similar approach. The content page called Lifepal Media focuses on articles for people dealing with insurance policies and related topics such as personal financial planning. The company says its website, including its blog, now has around 4 million monthly visitors, which forms a funnel for its marketplace.
While one of the advantages of Lifepal is that people can compare policies on their own, many also rely on customer support, which is manned by licensed insurance agents. In fact, Ficari says around 90% of its customers use it.
“We understand that insurance is complicated and expensive,” said Ficari. “People want to take their time to think and have a lot of questions, so we have good customer support in place.” He added that the combination of Lifepal, self-research and support, PolicyBazaar’s approach in India of the largest insurance aggregators in the country.
To keep its business model scalable, Lifepal uses a recommendation engine that matches prospects with policies and customer service reps. It takes into account data points like budget (based on Lifepal’s research, its customers typically spend around 3% to 5% of their annual income on insurance), age, gender, family composition, and whether they have previously taken out insurance.
Lifepal’s investment in ProBatus enables it to work with Assurance IQ, the insurance distribution automation platform acquired by Prudential Financial two years ago.
In a statement, Ramneek Gupta, founder and managing partner of ProBatus Capital said that Lifepal’s “three-pronged approach” (the educational content, online marketplace and live agents for customer support) have the “potential to change the way How Indonesian Consumers Buy Insurance ”is changing.
Some of Lifepal’s funding will be used to develop products that make applying for policies easier. Upcoming products include Insurance Wallet, which will include an application process with support in asserting a policy – for example, which auto repair shop or hospital a customer should go to – and an escalation if a claim is rejected. Another product called Easy Claim automates the complaint process.
“The goal is to stay with the customer end-to-end, from reading content to comparing policies, purchasing, to renewing and using, so you can really see people stay around,” said Ficari.
Lifepal is Cathay Innovation’s third Insurtech investment in the past 12 months. Investment Director Rajive Keshup told TechCrunch in an email that it supports Lifepal because “the company has grown phenomenally last year (12X) and is ready to surpass its aggressive 2021 plan despite the spread of the COVID Delta variant which underscores the fact that Lifepal is very strong “on track to replicate the success of similar global models such as Assurance IQ (US) and PolicyBazaar (India).”