OVO, ZhongAn To Launch Insurance Business in Indonesia

Both parties will offer Indonesian insurance companies access to ZA Tech's proprietary insurtech capabilities and applications.

Ovo ZhongAn Insurance Indonesia

OVO Group and ZA Tech have tied up to launch a new insurance technology (insuretech) business in Indonesia, according to reports.

ZA Tech is a technology venture founded by China’s online-only insurance company ZhongAn Online P&C Insurance Co while OVO – which counts Grab and Tokopedia as its investors – is owned by Bumi Cakrawala Perkasa (BCP).

Both parties will offer Indonesian insurance companies access to ZA Tech’s proprietary insurtech capabilities and applications.

Ovo said the new service will be ready next year and that it will draw on ZA Tech’s proprietary technology and applications.

Harumi Supit, Ovo’s head of corporate communications, said insurers can make their digitized products available on the Ovo app through the platform.

She added that the joint venture will certainly support the rise of insurance aggregators or marketplaces.

The launch of the new insure tech business in Indonesia comes as the county’ insurance sector is already crowded, with some 152 companies vying for premium. Indonesia is the world’s fourth largest nation, with a population of about 265 million, offering significant opportunity for new players.

Last October, Indonesia’s Financial Services Authority (Otoritas Jasa Keuangan or OJK) issued Circular Letter No. 19/SEOJK.05/2020 on distribution channels for insurance products.

Circular Letter 5/2020 provides more guidelines for insurance companies and their distribution partners on the marketing of insurance products, and on how they may use electronic systems and channels such as social media.

While the circular letter provides guidelines on various types of distribution channels, it is particularly helpful in giving more clarity on the requirements that are applicable to cooperation with non–bank business entities. Prior to this, there had been lack of express guidance from OJK on such type of cooperation. Although a draft circular letter on such type of cooperation was made available by OJK in 2018, it was never finalised.

While Circular Letter 5/2020 is intended for insurance companies, in practice, distribution partners including banks, multi–finance companies and digital platforms that partner with insurance companies will all need to ensure compliance. – BusinessNewsAsian.com