Customised Insurtech Products For MSMEs

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Customised Insurtech Products For MSMEs
Customised Insurtech Products For MSMEs
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SectorMost major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Financials
Insurance
Business Model Description

Invest in insurtech companies offering B2B solutions to MSMEs for shielding their businesses from operational and external risks. This is done by partnering with existing insurance and takaful companies to offer their technology platforms and solutions to the MSME market or by working directly with MSMEs to develop insurance products that meet their unique needs through direct-to-consumer models, allowing MSME owners to purchase and manage insurance online without going through traditional agents. Insurtech companies developing solutions for MSMEs generate revenue through subscription models, commission fees, a percentage of premiums, or through value-added services such as risk management. Examples of companies active in this space are:

PolicyStreet uses AI and machine learning to provide customized insurance products for individuals (i.e., car insurance, medical insurance) and businesses. Their WISE product uses RPA technology to provide instant and personalized insurance quotes for SMEs. PolicyStreet raised a total of USD 9.5 million in funding to date (42).

VSure.life is an insurtech company that uses AI and machine learning to provide personalized insurance products for individuals and SMEs. They offer a range of insurance products and use chatbots to assist customers. VSure.life has raised a total of USD 3.1 million in funding to date and has an average annual revenue of USD 6 million (43, 27).

FWD Takaful uses AI and machine learning to offer Shariah-compliant insurance products including life insurance, health insurance, and general insurance for individuals and businesses. In 2022, parent company FWD Group raised USD 200m in pre-IPO funding. The Group has raised USD 1.82 billion to date (44, 58).

MSIG Malaysia uses AI and machine learning to offer personalized insurance products for SMEs. They use data analytics to understand the needs and risks of small businesses and offer tailored coverage options. In 2021, MSIG Malaysia recorded a profit of USD 60.66 million (45).

Expected Impact

Enhance MSMEs' financial stability and continuity through customised insurtech products, decrease business disruption risks, and increase national economic growth.

How is this information gathered?
Updated: 18 Jun, 2023
Malaysia
Indicative ReturnDescribes the rate of growth an investment is expected to generate within the IOA. The indicative return is identified for the IOA by establishing its Internal Rate of Return (IRR), Return of Investment (ROI) or Gross Profit Margin (GPM).
> 25% (in IRR)
Investment TimeframeDescribes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.
Short Term (0–5 years)
Market SizeDescribes the value of potential addressable market of the IOA. The market size is identified for the IOA by establishing the value in USD, identifying the Compound Annual Growth Rate (CAGR) or providing a numeric unit critical to the IOA.
> USD 1 billion
Average Ticket Size (USD)Describes the USD amount for a typical investment required in the IOA.
USD 1 million - USD 10 million
Direct ImpactDescribes the primary SDG(s) the IOA addresses.
Decent Work and Economic Growth (SDG 8) Sustainable Cities and Communities (SDG 11)
Indirect ImpactDescribes the secondary SDG(s) the IOA addresses.
Reduced Inequalities (SDG 10) Gender Equality (SDG 5)

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Sector Sources
  • 1) Bank Negara Malaysia. Financial Inclusion. https://www.bnm.gov.my/financial-inclusion. 2) BNM. 2022. Malaysia’s Financial Development Context, Financial Sector Blueprint 2022-2026. https://www.bnm.gov.my/publications/fsb3. 3) Fintech Malaysia. 2022. Fintech Report 2022. https://form.jotform.com/221982684944470. Accessed through: https://fintechnews.my/31945/malaysia/fintech-report-malaysia-2022/. 4) Financial Education Network. 2019. Malaysia National Strategy for Financial Literacy 2019-2023. https://www.sc.com.my/api/documentms/download.ashx?id=6385977c-bd2c-4612-bda8-9ce6a5961720#:~:text=The%20National%20Strategy%2C%20a%20holistic,financial%20well%2Dbeing%20of%20Malaysians. 5) Bank Negara Malaysia. 2021. BNM Annual Report 2021. https://www.bnm.gov.my/documents/20124/6458991/ar2021_en_book.pdf. 6) SME Finance Forum. MSME Finance Gap. https://www.smefinanceforum.org/data-sites/msme-finance-gap. 7) Ministry of Economic Affairs. 2019. Shared Prosperity Vision 2030 (SPV 2030): Restructuring Malaysia's Development Priorities. https://www.epu.gov.my/sites/default/files/2020-02/Shared%20Prosperity%20Vision%202030.pdf. 8) IsDB and Ministry of Finance and Ministry of External Trade. 2020. Mapping Malaysia's Resource Centres. https://www.isdb.org/sites/default/files/media/documents/2022-02/MATRADE-ISDB_MMRC_E-book%20Source.pdf. 9) World Bank. 2018. Malaysia Digital Economy, A new Driver for Development. https://www.worldbank.org/en/results/2021/06/25/malaysia-s-digital-economy-a-new-driver-of-development. 10) World Bank and Bank Negara Malaysia. 2022. An Exploration of Nature-Related Financial Risks in Malaysia. https://openknowledge.worldbank.org/handle/10986/37314. 11) EY. 2022. Malaysia’s Financial Sector Blueprint 2022 - 2026. https://www.ey.com/en_my/take-5-business-alert/malaysia-s-financial-sector-blueprint-2022-2026. 12) Insurance Asia. 2023. FWD Group launches VC fund for investment in Malaysian insurtechs. https://insuranceasia.com/insurance/news/fwd-group-launches-vc-fund-investment-in-malaysian-insurtechs. 13) Faber Consulting AG. 2022. Malaysian Insurance Highlights 2021. https://www.malaysian-re.com.my/api/uploads/MIH_22_final_a6da7cf755.pdf. 14) Baker McKenzie. 2021. Guide to Insurtech Innovation and Utilization. https://resourcehub.bakermckenzie.com/en/resources/asia-pacific-insurance/asia-pacific/malaysia/topics/guide-to-insurtech-innovation-and-utilization. 15) The Edge Market. 2022. Budget Speech 2023. https://maa.theedgemarkets.com/article/full-budget-2023-speech. 16) Global Data. 2022. Malaysian insurance industry to reach $26.7 billion in 2026, forecasts GlobalData. https://www.globaldata.com/media/insurance/malaysian-insurance-industry-reach-26-7-billion-2026-forecasts-globaldata/. 17) Bank Negara Malaysia. 1997. Insurance Act 1996 and the Insurance Regulations 1996. https://www.bnm.gov.my/-/insurance-act-1996-and-the-insurance-regulations-1996.18) Bernama. 2022. PTV Programme Boosts Insurance Penetration in 2022. https://www.bernama.com/en/business/news.php?id=2145902. 18) Bernama. 2022. PTV Programme Boosts Insurance Penetration in 2022. https://www.bernama.com/en/business/news.php?id=2145902. 19) A.M Best. 2022. Market Segment Outlook: Malaysia Non-Life Insurance. https://web.ambest.com/docs/default-source/events/malaysia-non-life-segment.pdf?sfvrsn=ab0a80e2_1. 20) The Edge Malaysia. 2023. Insurance: Insurtech players eyeing digital insurer licences. https://theedgemalaysia.com/node/665043. 34) SME Corporation Malaysia. MSME Insights 2021 New Release, Chapter 3: Financing Ecosystem for MSMEs. https://www.smecorp.gov.my/images/Publication/MSME_Insights/SME_Insight_2021_Chapter3.pdf. 35) UN Department of Economic and Social Affairs. 2022. SDG Indicators Database. https://unstats.un.org/sdgs/dataportal/database. 50) PwC. 2023. Revolutionising financial inclusion through Digital Insurance and Takaful Promoting inclusive insurance in Malaysia. https://www.pwc.com/my/en/assets/publications/2023/20230416-revolutionising-financial-inclusion-through-digital-insurance-and-takaful.pdf. 51) OECD. 2023. Insurance Indicators. https://stats.oecd.org/index.aspx?queryid=25444.
IOA Sources
  • 21) Stakeholder Consultation on Feb 10, 2023. 22) Stakeholder Consultation on Feb 3, 2023 23) Stakeholder Consultation on March 22, 2023 24) MDEC. Fintech Initiatives https://mdec.my/digital-economy-initiatives/for-the-industry/entrepreneurs/fintech. 25) SME Corp Malaysia. 2021. Profile of MSMEs in 2016-2021. https://www.smecorp.gov.my/index.php/en/policies/2020-02-11-08-01-24/profile-and-importance-to-the-economy. 26) Baker Mackenzie. 2022. Malaysia: New Licensing Framework For Digital Insurers and Takaful Operators. https://www.globalcompliancenews.com/2022/01/24/malaysia-new-licensing-framework-for-digital-insurers-and-takaful-operators120122/. 27) DOSM. 2023. National Accounts, Gross Domestic Product (GDP). https://open.dosm.gov.my/gdp. 28) Government of Malaysia. 2010. Law of Malaysia, Act 709, Personal Data Protection Act 2010. https://www.pdp.gov.my/jpdpv2/laws-of-malaysia-pdpa/personal-data-protection-act-2010/?lang=en. 29) Government of Malaysia. 1999. Law of Malaysia, Act 599, Consumer Protection Act 1999. https://aseanconsumer.org/file/pdf_file/CONSUMER%20PROTECTION%20ACT%201999%20AMENDMENT%202019%20.pdf. 30) DOSM. 2022. Micro, Small & Medium Enterprises (MSMEs) Performance 2021. https://www.dosm.gov.my/v1/index.php?r=column/cthemeByCat&cat=159&bul_id=aFRNc2Zid295Tm1yczN5dWJNS1NwQT09&menu_id=TE5CRUZCblh4ZTZMODZIbmk2aWRRQT09. 31) Chubb Business Insurance. 2022. SME Insurance: 8 things every business owner in Malaysia must know. https://www.chubb.com/my-en/articles/8-things-every-business-owner-in-malaysia-must-know.html. 32) Asia Insurance Review. 2019. Malaysia: SME face underinsurance risk. https://www.asiainsurancereview.com/Magazine/ReadMagazineArticle?aid=41687. 33) Malaysian Reserve. 2018. Over 85% of SMEs at risk due to underinsurance, says AIG statistics. https://www.aig.my/content/dam/aig/apac/malaysia/documents/Business/sme-package/sme-article-the-malaysia-reserve.pdf. 36) Chronic Poverty. 2022. How Insurtech Is Changing the Insurance Market. https://www.chronicpoverty.org/economy/how-insurtech-changing-insurance-market/. 37) Prime Minister’s Department of Economy, Economic Planning Unit. 2021. Twelfth Malaysia Plan (12MP) 2021-2025 : A Prosperous, Inclusive, Sustainable Malaysia. https://rmke12.epu.gov.my/en. 38) Statista. 2021. Employment in the informal sector as a share of urban employment in Malaysia from 2011 to 2021. https://www.statista.com/statistics/974044/informal-sector-share-of-urban-employment-malaysia/. 39) Government of Malaysia. 2013. Law of Malaysia, Act 758, Financial Services Act 2013. https://www.bnm.gov.my/documents/20124/820862/Financial+Services+Act+2013.pdf. 40) Government of Malaysia. 2011. Law of Malaysia, Act 731, Money Services Business Act 2011. https://www.bnm.gov.my/documents/20124/815175/en_money_services.pdf. 41) Fintech News Asia. 2022. 5 Interesting New Details in BNM’s New Digital Insurance & Takaful Draft Framework. https://fintechnews.my/33467/insurtech-malaysia/5-interesting-new-details-in-bnms-new-digital-insurance-takaful-draft-framework/. 43) Growjo. 2023. Vsure.life. https://growjo.com/company/Vsure.life 44) Business Insurance. 2022. FWD Group raises $200m in pre-IPO funding. https://www.businessinsurance.com/article/20220119/NEWS06/912347321/Asia-insurance-FWD-Group-raises-$200M-in-pre-IPO-funding 45) MSIG Malaysia. 2023. Financial Info. https://www.msig.com.my/about/financial-info/ 46) Bain and Company. 2023. Asia-Pacific Private Equity Report 2023. https://www.bain.com/insights/asia-pacific-private-equity-report-2023/. 49) Hydra Strategy Limited. 2021. Efront releases fourth annual global private equity performance series. http://www.hydrastrategy.co.uk/blog/2021/8/24/efront-gpeps-2021. 48) The Financial Capability and Inclusion Demand Side Survey 2021. Financial Education Network. 2022. https://www.fenetwork.my/wp-content/uploads/2022/12/BoxArticleFSR22_Eng.pdf 49) New Straits Times. 2023. Fahmi: Internet access issue especially in rural areas to be resolved by June. https://www.malaymail.com/news/malaysia/2023/03/07/fahmi-internet-access-issue-especially-in-rural-areas-to-be-resolved-by-june/58329. 52) Paypal. 2022. Accelerating Small and Medium-Sized Enterprise (SME) Digitalisation in Malaysia 2022/2023. https://publicpolicy.paypal-corp.com/sites/default/files/2022-09/paypal-accelerating-digital-readiness-malaysia-whitepaper-2022.pdf. 53) The Malaysian Communications and Multimedia Commission. 2021. The National Digital Infrastructure Plan, Bringing High Quality Digital Connectivity to All Malaysians. https://www.mcmc.gov.my/skmmgovmy/media/General/pdf/MCMC-MyConvergence_20.pdf. 54) The Edge Markets. 2023. Financial inclusion a top national priority. https://theedgemalaysia.com/node/653723. 55) European Union. 2021. Gender Country Profile for Malaysia. https://www.google.com.tr/url?sa=i&rct=j&q=&esrc=s&source=web&cd=&ved=0CAIQw7AJahcKEwi429a7gIT_AhUAAAAAHQAAAAAQAw&url=https%3A%2F%2Feuropa.eu%2Fcapacity4dev%2Ffile%2F126107%2Fdownload%3Ftoken%3DK9eqHdFn&psig=AOvVaw22Kv8QuxIhnkML-KOTJF7D&ust=1684589068897519. 56) DOSM. 2021. ICT Use and Access by Individuals and Households Survey Report, Malaysia, 2021. https://www.dosm.gov.my/portal-main/release-content/ict-use-and-access-by-individuals-and-households-survey-report-malaysia-2021. 57) Crunchbase. 2023. Vsure.life. https://www.crunchbase.com/organization/vsure-life 58) Tracxn. 2023. FWD. https://tracxn.com/d/companies/fwd/__AmMTsMsEJxiUOOLvofCEjIBZGSJe_oDyk1IrNzQ9JIE/funding-and-investors 42) Crunchbase. 2023. Policy Street. https://www.crunchbase.com/organization/policystreet/company_financials 59) Ekuiti Nasional Bhd (Ekuinas). 2018 .Ekuinas Divests its 60% stake in Tranglo to regional leader, TNG Fintech Group Inc.https://www.ekuinas.com.my/images/media-centre/press-release/2018/Press-Release-Tranglo-Exit_final.pdf 60) Fintech News Malaysia. 2019. PitchIN’s First ECF Exit with MyCash Online Gives its Investors 44.2% Returns.https://fintechnews.my/21811/crowdfunding-malaysia/pitchins-first-ecf-exit-with-mycash-online-gives-its-investors-44-2-returns/ 61) Government of Malaysia. Industry4WRD Policy. 2018. https://www.miti.gov.my/index.php/pages/view/4832 62) Government of Malaysia. Economic & Fiscal Outlook and Federal Government Revenue Estimates 2023. 2023. https://budget.mof.gov.my/pdf/belanjawan2023/ekonomi-fiskal/EUFORE2023_270223.pdf