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How insurtech is redefining “B2B2C” business models

Igloo and April are niche providers leveraging tech to create markets in Asia for incumbent underwriters.



Wei Zhu, Igloo

A breed of capital-light insurance companies is leveraging digital to create new ways to reach consumers through traditional players. 

This specialist type of insurer, sometimes called a “managed general underwriter”, does everything an insurance company does except carry the risk.

Such MGUs may be cutting-edge insurtech startups or they may be traditional companies now adopting digital tools. Whatever the provenance, they are creating new ways to support traditional carriers that would like the agility of insurtechs to go after new, hard-to-reach business segments.

Igloo is a Singapore startup that is helping partner companies serve ecommerce clients in Southeast Asia. April is a traditional French company with a digital direct-to-consumer capability it is leveraging for partners in the region.

What they have in common is their “B2B2C” model, that is, they reach consumers via partners – traditional insurers or insurance brokers that lack the expertise to service specific businesses. MGUs allow insurers to offer specialist cover at pure variable cost instead of the fixed cost of their own employees.

The insurance companies underwrite policies, but the MGUs do everything else, from designing product and pricing, to managing plans and handling claims.

Beyond the basics, though, MGUs look very different.

Igloos in Asia

Igloo is a hardcore tech company. It was set up in 2016 by Wei Zhu, former CTO at Grab, and a Facebook and Microsoft veteran (pictured). Zhu happily acknowledges he has no background in insurance but saw a huge, conservative industry ripe for digital disruption.

With operations teams in Indonesia, Thailand, Philippines and Vietnam, Igloo partners with carriers such as Allianz, FWD, MSIG and Sompo to help them provide specialist cover in fields such as ecommerce.

For example, it provides insurance to Indonesian consumers who want to protect mobile phones. In this case, consumers who don’t buy insurance immediately at point of sale can try to get insurance afterwards. They take a selfie with the phone in a mirror, and Igloo’s machine-learning tools can guess whether the person is attempting fraud or if the phone is actually still in working order. Without such insights, insurance companies would be flying blind.

Similarly Igloo can offer people insurance if they receive defective products from an ecommerce site such as Bukalapak, as well as deploy artificial intelligence to offer fraud insurance back to them.

“Everything flows through us, including the data,” Zhu said. “We issue the policy and manage claims.” By helping traditional insurers underwrite policies in the world of ecommerce, Igloo reduces their claims ratio by as much as 80%, he said.

Technically, Igloo does not need a license. But it finds partners are more comfortable if it has broker licenses or licenses to manage agents or operate reinsurance. It already holds several of these and will use proceeds from its latest funding round to invest in more.

Igloo began in 2016 as Axinan but changed its branding, to boost its appeal with consumers. “We found a lot of people in countries like Indonesia had trouble pronouncing the X,” Zhu said. “Igloo is a cute name but it’s also something that protects you in a harsh climate.”

The startup just completed a $8.2 million Series A-plus round of funding, with backing from telcos such as Singtel and InTouch, the investment arm of Thai telco AIS. The funding will go in part to expanding into new verticals – starting with telecommunications – and beefing up its tech and local businesses.

Its total funding now stands at $16 million; Zhu declined to reveal the company’s valuation.

April in Paris

Igloo is a full-stack software startup with no insurance background that is building businesses in emerging markets; April is a veteran insurer that is going tech, starting in the financial centers of Hong Kong and Singapore.

The France-based general underwriter is taking a B2C capability and providing it to its distribution partners in Asia.

The company began in France over 30 years ago in health insurance, which was then a novel market to cover in that market. For the past eight years it has been active in Asia in specialized markets such as selling international health cover to French expats – and now providing such services to local people as well as foreigners in six regional markets.

Romain DiMeglio, Asia CEO, says the business has traditionally been low tech, except for its use of mobile apps: it has come to rely on these to provide service. “Our business model is more about service than distribution,” he said. The firm continues to add new health-related services, such as tele-consultation.

April has also begun to vend its app on a white-labelled basis to give insurance companies access to its regional network of doctors. The Covid-19 pandemic has prompted it to hasten this rollout to intermediaries. “The virus has forced us to accelerate deployment,” he said.

“When it comes to distribution, we are 90% technology and only 10% human,” DiMeglio said. The customers it acquires directly have been able to use its app or its website to get quotes, enroll in products, make claims, and receive payments.

April is now using its Asia business to make this available to brokers or its partner insurance companies.

“The plans we sell tend to be complicated, so we are streamlining as much as we can,” DiMeglio said. Automation allows intermediaries to focus more on sales rather than paperwork. “We are rolling this out for intermediaries in Hong Kong and Singapore first, and then we’ll extend this to our other markets.”

For carriers, of course, this requires integrating with April to be able to underwrite to its customer base. DiMeglio says one reason the MGU is making its tech available now is that more insurance companies are upgrading their own tech stack, so it just needs an API to plug in.

“We’re agnostic as to who builds the connections, whether it’s us or our partner, or a third-party vendor,” DiMeglio said. What matters is that insurance partners have the digital tools to support April’s business.

“Our partners need to understand us, they need compliance, they need to know the risk’s they’re insuring, in real time,” DiMeglio said.

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