PasarPolis CEO Cleosent Randing spoke to The Jakarta Post's Aditya Hadi about his decision to move from a brokerage-only business to a digital insurance firm that can sell its own products and how the company is braving the “tech winter”.

Question: What is the idea behind PasarPolis?

Answer: Since the beginning, our objective has been to ensure that people can feel a sense of security by having insurance.

In Indonesia, there is a clear public distaste toward insurance, due to the complex process of buying and claiming for reimbursement. That's why we decided to start with a frictionless way to buy insurance.

Another interesting aspect of Indonesians that makes them different from people in other countries is that they don't actively look for insurance. Almost no one here spends their weekend searching for insurance products on Google, for example.

Thus, instead of waiting for people to buy, we’ve tried to enter their daily lives, such as their activities in buying a ticket for traveling, purchasing a new gadget and ordering online transportation. We come to their micro moments.

What insurance products do you have right now?

The insurance sector is still archaic. We realized that people's lifestyles have changed in the digital era. Instead of going to a restaurant, some people prefer to buy food online. Travelers no longer go to offline travel agents but just buy airplane tickets through smartphone apps.

That's why we’ve tried to seize the opportunity by creating a product that is suitable for those. That's our first product.

The second one is gadget-related insurance. Many people in Indonesia use smartphones with cracked screens, while there is cracked-screen insurance that is cheaper than the price of some screen protectors. We have partnered with Xiaomi, IKEA, Home Credit and Shopee for this solution.

The third one is auto insurance, but we haven't launched it publicly. We plan to launch it in the second half of this year.

How was your performance last year?

We performed quite well, as the value of gross written premium (GWP) tripled last year compared with the previous year. In total, we issued 500 million policies last year alone.

However, I think [the performance] is not only about how big the business is, but also how good the product is. How we can make the claims process easier, how we can provide a sense of security to more people, that is our focus this year.

Last year, PasarPolis launched the Tap Insure app that allows the firm to sell its own products, on top of your brokerage business. The move marked your entrance into the digital insurance business. Why did you decide to expand your offering in that direction?

We have created a product experience where people can buy insurance instantly. However, we see that despite that seamless process in the beginning, people still complained about the complex process for claims.

By being a digital insurance provider, we could create a product that has a faster claims process. So, not only can the buying process be finished in a tap, but the claims process should also only require a tap.

There are three main value chains in insurance, they are distribution, underwriting and claims processing. We have tackled the first part with PasarPolis, and we want to handle the last two with Tap Insure.

In the underwriting process, we think the price calculation can be done by artificial intelligence (AI) in the future; that would make the insurance more affordable. And in reimbursement claims, we want to make it real time.

Do you have a plan to provide insurance for electric vehicles (EVs)?

There should be insurance for that.

However, despite all of the hype, we need to check how practical electric vehicles are. In advanced countries, there are a lot of charging stations, but the conditions are different in Indonesia.

From an insurance point of view, we already could provide comprehensive coverage, both for electric and traditional vehicles. For example, we could cover if your vehicle gets scratched. We have a license for that.

The unique thing about EVs is the battery, so there is a new risk in the price.

What is PasarPolis' strategy in facing the so-called tech winter?

With high interest rates, there is no more cheap capital. And there is no indication that interest rates will drop significantly in the near future.

I think it's good [for the ecosystem], as cheap capital [tends to] be thrown into business models that are actually not profitable and don't have a path to achieving profitability.

By being a digital insurance provider through Tap Insure, we can have our own underwriting, our own manufacturing. It makes our profitability become clearer. So, not only do we build innovative products with a seamless experience, but we also create a solution with good unit economics.

The problem with brokerage is that we are squeezed between insurance companies and platforms [as distribution channels], as both of them are trying to make money. Thus, by being a digital insurer, we can manage our costs in the long term.

When will PasarPolis become profitable?

We’ve estimated that we will reach positive earnings before interest, taxes, depreciation and amortization (EBITDA) by the end of next year.