How this Australian insurtech startup made the leap into Southeast Asia

Like many other industries, the insurance sector’s digital transformation got a boost in the aftermath of Covid-19, driving 80% of insurers to seek new business models and revenue streams.

This paved the way for insurtech startups looking to make a dent in the industry, especially in Southeast Asia, where insurance penetration is 1%-3% lower than the rest of the world.

Right now, the industry is fertile ground for digital solutions. In the first half of this year alone, insurtech startups secured US$210 million from investors – a 100% increase from the same period last year.

Brimming with funding and opportunities, the region is a haven for new startups – even those from other parts of the world. ProofTec, an artificial intelligence (AI) vehicle damage assessment platform, is one such startup looking to make a foray into Southeast Asia.

Letting AI be the judge

The Australian firm was founded in 2018 by Danny Cohen, who got the idea as a frequent renter of vehicles during his time at one of the largest essential infrastructure services providers in Australia and New Zealand.

Cohen, who is also ProofTec’s CEO, realized that the process for assessing damage to rental cars was fraught with difficulties: The main problem was figuring out whether damage to a vehicle was preexisting – and if so, who was responsible for causing it?

Danny Cohen, CEO of ProofTec / Photo credit: ProofTec

“Undetected damage is a significant financial burden for car rental operators and often presents challenges when trying to deliver on high customer experience expectations,” he explains.

Through his initial collaboration with the Commonwealth Scientific and Industrial Research Organisation, Cohen found AI a promising tool in gauging damage to vehicles as the technology had progressed far enough for practical use. That’s when he set out to build an AI solution with Jeroen Vendrig, who became ProofTec’s chief technology officer.

Jeroen Vendrig, chief technology officer of ProofTec / Photo credit: ProofTec

The AI solution reconstructs a virtual image from several photos of the vehicle sent in by customers or car rental operators. The AI then scans this virtual reconstruction to identify any damage and determine whether there is any new damage.

This method effectively automates the assessment process, serving as an objective and independent arbitrator between customers and car rental operators. This allowed ProofTec to get off the ground quickly and draw customers from across Australia.

Having found success in its home market, the “next logical move” for ProofTec was to explore its overseas options, and Southeast Asia was the perfect choice because of how close it is to Australia.

Understanding the region

Cohen noted that the region’s established car-sharing and ride-hailing operators made it especially well suited for the Australian firm’s solutions. Moreover, the market for these services is projected to race forward at a compound annual growth rate of roughly 14% in the next four years to hit US$23 billion by 2025.

However, as an overseas company, ProofTec went through some teething issues when looking for partnerships in the region.

“Those [difficulties] are specific to each country and market, which makes it even more challenging because of language barriers and cultural norms,” says Cohen.

To navigate these problems, the company turned to the Australian Trade and Investment Commission (Austrade), a government agency that promotes trade, investment, and international education for businesses. Besides giving ProofTec access to an extensive network of industry stakeholders, the agency also provided specific guidance tailored to each of the markets that the AI-driven platform wanted to explore.

“It’s very much that end-to-end picture of what we need to know when we’re talking to a company,” says Cohen. “What are the things we should be looking at? What are the things we need to make sure we do when we talk [to it?]”

Further, companies in the region have different methods of collaboration, he adds. Some companies prefer to receive direction from potential partners, which was at odds with the more discussion-based approach that ProofTec was used to.

That was the case when ProofTec first entered discussions with a vehicle mobility company in Southeast Asia. ProofTec initially took a more open approach that would allow for more input from the potential partner’s end. However, after consulting with Austrade, the company realized it needed to adjust its line of communication.

Photo credit: kasto / 123RF

“We needed to be more definitive and clear about the exact solution that we would be providing,” he explains.

Besides seeking guidance from Austrade, ProofTec also participated in the second season of Insurance Australia Group’s Firemark Accelerate (FMA) program, which was run out of Singapore. Through the FMA, ProofTec met local network leaders and companies such as Viktor Kyosev from Greenhouse and William Devos from Board of Innovation. This allowed ProofTec to gain significant and invaluable local market insights and accelerate its commercial activities.

The beginning of a beautiful partnership

Being part of the program helped ProofTec grow its regional expertise and secure a firmer foothold in unfamiliar territory. This eventually led to a partnership with a leading Singapore-based mobility tech company, which ProofTec was introduced to via a mutual contact in Australia earlier this year.

After ProofTec got in touch with the Singapore firm’s head of fleet management and gave several demonstrations, the latter felt confident enough to push forward with the partnership. ProofTec is now piloting its solution this month, and Cohen is confident that it will deliver significant value.

“We’re looking to optimize workflows, increase the level and number of damages detected, and improve its customer experience when [customers] engage with it for vehicles,” he says.

ProofTec also has also begun working with Sompo Insurance Indonesia, the local arm of global insurance firm Sompo, to begin pilot runs of its mobility solution and new online AI claims management platform. According to Cohen, the claims platform can help companies like Sompo have a single point of reference for pricing and negotiating repairs.

“Our AI claims management platform aims to reduce claim cycle times while significantly improving the customer experience and reducing claim costs for both insurers and claim managers,” he explains.

Ismiyatun Kartiwinoto, chief operating officer of Sompo Insurance Indonesia, is also confident ProofTec’s offering will strengthen its operations: “This AI solution will enable us to detect both existing and new damage, which may otherwise have been overlooked or disputed, ultimately leading to an efficient, effective, and transparent claims process.”

Kartiwinoto, who is spearheading the company’s exploration into AI claims management, adds that it will also cut customer waiting time during initial risk assessment and claim surveys.

Given Sompo Indonesia’s mature understanding of how AI could benefit its operations, Cohen describes the insurance firm as the “perfect partner.”

More markets, more coverage

ProofTec hopes to grow aggressively through partnerships like these, which open up more cross-region opportunities. To that end, the startup is mulling the inclusion of motorbikes in its damage detection software, as it only covers cars at present.

The company is also looking to expand further into other countries, including those outside Southeast Asia such as the United States and the United Kingdom. Cohen notes that this would probably be done either by setting up more physical offices or by providing application programming interfaces to potential partners.

“It’s all about making sure that we can continue to provide solutions to as many jurisdictions as possible,” he says.

The Australian Trade and Investment Commission is the Australian Government’s international trade promotion and investment attraction agency, helping to bridge the gap between Australian businesses and the rest of the world through its global network of offices.

For more information on investing in Australia or for Australian businesses to expand into Singapore, connect with Austrade.

This content was produced by Tech in Asia Studios, which connects brands with Asia’s tech community. Learn more about partnering with Tech in Asia Studios.