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May 2019

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Grab ready to deliver insurance to the masses

Source: Asia Insurance Review | May 2019

Asia Insurance Review spoke to Grab’s insurance head Tom Duncan on the company’s vision to provide simpler access to protection across Southeast Asia. 
By Ridwan Abbas
 
 
With over 9m drivers, merchants and agents in a network that spreads across eight Southeast Asian markets, Grab has an impressive captive audience to promote its nascent insurance service to. And considering that large parts of the region are unbanked and uninsured, Grab and its insurance partners see a big opportunity to bridge the protection gap in Southeast Asia. 
 
Grab Financial, the FinTech unit within Southeast Asia’s leading ride-hailing and mobile payments platform, does not underwrite policies but rather acts as a partnership platform to deliver digital insurance products to its drivers and partners through Grab’s driver app. 
 
Grab announced its first insurance partnership with Chubb in Singapore last year, offering its drivers in the island state protection against loss of income from illness or accidents. When asked what it looks for in a potential partner, head of insurance Tom Duncan said, “The motivation and willingness to create new and more innovative insurance products, and what that comes down to is simplification … so we’re really keen to work with partners who are interested in simplifying insurance products.”
 
Rather than have a product that comes with complicated features, Grab wants to deliver “basic coverage at a very affordable price point that addresses a very specific need,” he said. 
 
The term ‘micro’ was a recurrent theme in conversation with Mr Duncan and it is clear that Grab sees ‘bite-sized’ and affordable coverage that is integrated into a user’s lifestyle as the future of insurance. 
 
As a first step, it is offering insurance services only to its driver ecosystem who can access the product through the Grab drivers’ app. In some ways, Grab can use this as a sort of test-bed before it ultimately rolls out insurance products through its main consumer app. 
 
Unique customer insights
Well on its way to becoming an ‘everyday super-app’ in the mould of China’s WeChat, Grab has a tremendous deal of insight into its users. With regards to offering the right proposition for its drivers, Mr Duncan said, “We are able to design products that suit their income and cash flow, and in time they will be able to pay extreme micro premiums on a per trip or per day basis.” 
 
Grab is currently working with insurers NTUC Income and MSIG in Singapore to deliver a customised motor cover, where Grab’s drivers can choose to turn the cover on and off depending on when they are on the road. It aims to roll out its motor cover later this year. 
 
Again, Grab’s depth of user insight means it has the ability to offer coverage based on scenarios generated by everyday use of its app. 
 
“We are in a unique position because obviously we can see when the driver turns the app on when they drive … and in time on the consumer side of the platform we’ll also very much be looking into scenario-based insurance, offering products that are very linked to a consumer’s existing use case on the ground.” said Mr Duncan. 
 
Payments system an enabler 
Grab’s payment system – GrabPay – is an enabler for the company in delivering insurance services at a low cost, he added. 
 
With 144m downloads of GrabPay, there lies a big opportunity for Grab to enable insurance transactions for under-served segments of the population within Southeast Asia. 
 
“For example our drivers will be able to pay out of their earnings on the Grab platform rather than enter in credit card details or any other kind of payment methods. It will be very easy for them to opt in if they wish to and have micro premiums taken out from their earnings as they drive.”
 
One other advantage is that premium and claim payments can be integrated through GrabPay, and Grab is intent on making its claims process as simple and efficient as possible. 
 
“Ideally we are able to pay that claim in real time but when it’s not possible with some insurance products, then they can track the status of their claims with the insurer through our app,” he said. 
 
Getting as many people insured
Grab’s aim for its insurance business in this first phase is to get as many of its driver partners insured across the region, and is “very ambitious” about the number of sign-ups it can reach. 
 
It also recently received a general insurance agency license in Malaysia, which will represent the second market after Singapore for Grab’s insurance business.
 
With the ability to interface with more than 140m users of its app across Southeast Asia, Grab’s insurance foray may yet be one of the most successful microinsurance ventures this region has seen. A 
 
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