Are Asia’s insurtech players pouring new wine into old wineskins?

“​​All successful startups eventually become the things that they hate, which is an incumbent,” says Walter de Oude, founder and former CEO of Singapore-based insurtech firm Singlife.

In the “highly capital-intensive” and regulated world of insurance, insurtech companies often need to acquire existing industry players to obtain licenses, and scale. In some cases, it’s also fueled by startups getting funded by traditional firms to spur their growth.

As lines between insurtech companies and traditional insurers blur, it’s worth asking how much of a difference these upstarts can truly make to the insurance sector, given their close links to incumbents.

De Oude’s Singlife, for example, became a fully owned subsidiary of Japanese insurer Sumitomo Life in March this year, signifying the former’s transition to insurance sector incumbent.

But Singlife’s journey to incumbency started even earlier, with its acquisitions of the Singapore operations of Zurich Life in 2018 and Aviva Singapore in 2020.

De Oude himself believes Singlife lost its startup status when it acquired Aviva, saying that the move transitioned the firm “very solidly” from a growth company to a big business.

Singlife is just one example of these blurred lines.

Traditional insurers are increasingly channeling investments into insurtech ventures too, with some even establishing their own startups. Theresa Blissing, founder of the Asia InsurTech Podcast, explores this in her book The Future of Insurance.

Theresa Blissing, founder of the Asia InsurTech Podcast / Photo credit: Blissing’s website

For example, Japan’s Tokio Marine led the US$196 million funding round for Singapore-based Bolttech, with participation from US insurer MetLife, in May 2023.

That said, Bolttech wasn’t exactly a traditional startup – it wasn’t a newcomer entering an established sector with limited resources.

“Instead, it’s about a well-funded venture steered by seasoned industry professionals who, in part through strategic acquisitions, rapidly secured a global foothold,” writes Blissing.

Hunger for acquisitions

The distinction between incumbent and startup may be especially hazy in insurance because of the heavily regulated nature of the industry.

For many years, “we have seen new players taking over existing carriers for their license or portfolio,” Blissing tells Tech in Asia.

The way the world works

A long game