Insurtech startup PolicyStreet has bagged USD 6 million in a Series A round led by Altara Ventures, Auspac, and Gobi Partners. The firm will utilize the capital to expand its operations to new regional markets, as well as ramp up its technology capabilities and reinforce its business efforts to address insurance coverage and protection gaps.
PolicyStreet has also secured in-principle approval for a general insurance and reinsurance license from Malaysia’s Labuan Financial Services Authority. This allows PolicyStreet to create and underwrite insurance products, according to a press release.
“We are excited to have the capability to introduce new sachet-based and on-demand insurance products with our new license to power up the insurtech ecosystem while continuing to provide value to all our existing customers in Southeast Asia,” said Yen Ming Lee, CEO and co-founder of PolicyStreet.
Founded in 2017, the firm aims to capitalize on the region’s glaring holes in insurance coverage. Research conducted by Lloyd’s, the specialist insurance and reinsurance market, and the US-based Center for Economics and Business Research suggests that the underinsurance gap in Asian countries was worth USD 134 billion in 2018.
Despite urbanization and population growth, the insurance penetration rate in Southeast Asia’s developing economies, such as Indonesia and Malaysia, remains below 5%. This is far below Singapore’s roughly 12.5%, according to a study conducted by US consultancy Bain & Company in 2019.
PolicyStreet offers a digital platform that allows consumers and businesses to purchase insurance products and services in a more affordable and accessible manner. Currently, it partners with 40 insurance partners, counting AirAsia, Carro, as well as Foodpanda as clients.
Digital insurance platforms like PolicyStreet service Southeast Asian consumers who increasingly prefer to buy insurance products online. Over 60% of the region’s consumers prefer a web-based process for this type of purchase, while 68% of respondents said they wanted an end-to-end digitalized product in a survey conducted by global reinsurance firm SwissRe Group.