Grab, the ride-hailing startup, has inked a joint venture deal with a unit of ZhongAn Online P&C Insurance Co., the Chinese Internet insurance company, to develop a platform to sell insurance throughout Southeast Asia.
According to a report in the The Business Times, through the joint venture, the two will offer a variety of insurance products at a lower price point. Users will be able to access the insurance products via the Grab mobile app, with the service expected to be launched in Singapore in the first half of this year. It will then be expanded into other markets, noted the report. ZA International, the unit of ZhongAn that is working with Grab, is providing the back-end technological assets for the new insurance platform. The two plan to work with insurance providers around the world to create products that meet the specific needs of Southeast Asian consumers. For instance, one of the first products to be offered will provide drivers in Singapore with insurance that would protect them if they got sick or in an accident. Grab is partnering with Chubb for that product. Insurance premiums can be automatically deducted through GrabPay or via payment partners, noted the report.
In an interview with The Business Times, Reuben Lai, a senior managing director for Grab Financial, said the company sees a big opportunity in the market for distributing insurance in Southeast Asia. “If you were to look at the penetration levels, we are maybe around 30 to 40 percent lower than markets such as China. And even though it’s underpenetrated, the market size is about US$80 billion to US$100 billion right now, and that market is expected to double in the next few years,” said Lai. The executive noted that the joint venture can offer better insurance rates because the cost to acquire a customer is lower thanks to Grab’s large user base. The report noted that in order for Grab to be successful, it has to offer products that are based on how people use the company’s app.