Axiata Digital partners Great Eastern to offer insurtech solutions in Malaysia and Indonesia

• Premiums or contributions to begin from as low as US$0.36
• Leverage on big data, AI and behavioural economics to serve the underserved

MALAYSIA wants its citizens to be better insured. In June 2019, finance minister Lim Guan Eng said the government wants the national insurance penetration rate to breach the 75% mark by 2020.

This target may be revised, as later in September, Lim said that the 75% goal by 2020 is still some distance away from the present rate of 55%. If the 75% can’t be achieved on time, then an assessment will be carried out.

It’s hard to say if the goal is achievable by the dawn of the new decade, but what’s clear is that there needs to be more ways for insurance to reach the underserved. Insurtech can help, and it’s about to get a boost in Malaysia.

Axiata Digital Capital – a fintech service provider operating under the brand name Aspirasi – has just signed a strategic partnership with Great Eastern to provide affordable and customised insurance and takaful products for consumers, micro-entrepreneurs and SMEs.

The products is fully digital, and will be offered on Aspirasi as well as its partner platforms. Axiata says that there will be a “comprehensive” range of insurance and takaful products designed to meet different needs, including life insurance and takaful, health insurance, home insurance and personal accident insurance.

Premiums or contributions will start from as low as RM1.50 and IDR5,000 (approx. US$0.36).

The partnership

The insurance and takaful products are underwritten by Great Eastern Life Assurance (Malaysia) Bhd, Great Eastern General Insurance (Malaysia) Bhd and Great Eastern Takaful Bhd respectively in Malaysia, and by PT Great Eastern Life Indonesia and PT Great Eastern General Insurance Indonesia in Indonesia.  

Axiata Digital Capital, through Aspirasi, will be “providing the technology platform on which the product will be built,” Axiata Digital’s chief financial officer and Aspirasi’s executive director Sheyantha Abeykoon tells Digital News Asia.

These micro-insurance products will be distributed to all Axiata Digital platforms, including Boost e-wallet and Aspirasi. Sheyantha says that approval will be needed on some of the platforms due to regulations, but the general idea is to use “all the reach we have in Axiata Digital to distribute some of these products.”

Adding to that, Sheyantha says that Aspirasi will focus on the technology innovation and product development, as well as how they can productise some of the solutions for the underserved.

There will be a focus on micro-enterprises and SMEs, Sheyantha notes.

This jives with Aspirasi’s aspirations, which provides a range of micro-finance solutions to small businesses. The company has thus far disbursed RM50 million worth of micro-loans funds to 9,000 merchants.

Serving the underserved

Going forward, Aspirasi will be leveraging on big data, artificial intelligence and behavioural economics to provide the underserved with the insurance that they need. How they’re doing so is essentially to ride on Aspirasi’s existing technology.  

Aspirasi – as a micro-financer – has been providing loans to pre-screened customers who are on their partner platforms, such as Boost.

“Pre-screening happens by looking at completely alternative data – not your bank statement, not your income document. It’s perhaps your transaction data, some part of your digital footprint. We use AI and data science to underwrite our customers. That’s how we’re using it today,” says Sheyantha.

Going forward, Sheyantha says that analytics can be used to drive performance marketing. That is, they can use marketing analytics to find relevant customer sets and offer them the exact products they’re looking for.

Axiata has a plan to launch a total of 12 insurance products in the next six months. An example, as Sheyantha explains, will be something like Key Man Insurance, which insures companies against the loss of key talent. This can be significant for micro-SMEs, which sometimes only have a handful of employees, so there can be a real risk to the company if they fall sick or leave.

Looking further into the future, the application of AI can be used to detect fraud at the point of application.

“There are technologies we are developing that are able to detect fraud purely on behavioural patterns, like how somebody is entering an application online in a specific way,” Sheyantha says.

“These are some future applications that may not be done immediately, but are about how we can innovate insurtech going forward.”

Sheyantha says that they haven’t gotten into specific products, though they’re looking at possibly bundling products together for particular situations or people. Other possible products include providing protection against stock losses, or for business travel.

“We think there are lots of ways to productise here. There are a lot of standard products in the market right now, so we figure there is lots of room to innovate.”

Setting differences

The products sold on the Axiata Digital platforms will differ from the ones Great Eastern is providing traditionally in a few ways. They could be pay per use, for instance, and the products will be provided digitally. Applications can be completed in as short as three minutes – or at least that’s what Axiata is targeting.

Sheyantha is aware that digitally-distributed insurance does have its concerns, particularly customer service. The idea now, he says, is to digitise the “first mile” aspect of insurance applications, with follow-up interaction done by Great Eastern.

First level interaction between the customer and the service can be driven by AI or chatbots over the app, while the second tier and more complex aspects can be passed on to the insurance company. 

Things may possibly change later. “But right now, the customer service component of it, what we call policy administration part of it, will be handled directly by Great Eastern,” he clarifies.

Will there be a different approach when it comes to providing the service to Indonesia? “Fundamentally, our strategy of serving the underserved in both [Malaysian and Indonesian] markets, at a broad level, is a homogeneous strategy. We build digital platforms providing micro-financial services needs to these consumers because we feel that we can reach them digitally in a cost-effective, seamless manner rather than through traditional means.”

Essentially, the core unique selling point will be the same across both countries. Where things could differ, Sheyantha says, is in productising. As different countries have different insurance needs and regulations, Axiata Digital will be working with Great Eastern to ensure proper localisation comes through.  

Sheyantha sees a lot of potential in this. “Insurance has been around for centuries. It’s not a new business. But it’s a business that hasn’t caught onto the gig economy yet, or on digital platforms, as much as it should. Insurtech is a fledgling industry, so this is a platform that could really penetrate the unpenetrated, and serve the underserved.”