Warburg Pincus has announced a $350-million equity commitment to set up Oona Insurance (also known as Aseana Insurance), a digital general insurance platform in SE Asia.
Warburg Pincus has partnered with seasoned executive Abhishek Bhatia to set up the platform, it said in a press statement.
Warburg plans to scale the digital insurance platform through a buy-and-build strategy.
Oona is seeded with two acquisitions – Indonesia’s PT Asuransi Bina Dana Arta (ABDA) and the Philippines’ Mapfre Insular Insurance Corporation (MIIC). Both firms, which have decades of experience in their markets, will be rebranded as Oona Insurance.
With the acquisition of ABDA and MIIC, Oona offers a wide range of general insurance products including motor, property, and group health. Oona also plans to cover travel as well as release products that are emerging on the back of increasing adoption of the internet, e-commerce, and digital payments.
Oona plans to deploy a value-creation strategy to scale up into the region’s digital general insurance platform with operations across multiple major markets in the region.
Established in 1982, ABDA offers insurance products on vehicles, homes, property, transportation, travel, personal accident, and health insurance. The company went public in 1989. As of the first half of this year, ABDA posted a profit for the year amounting to 67.35 billion rupiah ($4.34 million). This was down of about 8.67% compared to the first half of 2021 which was 73.75 billion rupiah ($4.7 million), according to the company’s financial report.
In September, Aseana Insurance acquired ABDA for $59.5 million, DealStreetAsia reported. Aseana bought 386.92 million shares, or a 62.33% stake in ABDA, from the Spanish insurance company MAPFRE Internacional SA, according to ABDA’s disclosure to the Indonesian financial services authority (OJK).
Meanwhile, Mapfre, which was founded in 1934, provides insurance services on fire and allied lines, motor vehicles, personal accidents, casualty, liability, engineering, marine cargo, surety, and micro insurance. Before the acquisition, Mapfre Insurance Philippines was 75% owned by MAPFRE of Spain and 25% by Insular Life Assurance Co. Ltd., of the Philippines.
“I am very excited to partner with Warburg Pincus to build Oona into a truly world-class company,” Abhishek Bhatia, Oona’s Group CEO, said in a statement.
“All the assets and operations will be consolidated under a coherent operating model and a common brand and tech stack, positioning us well to capture the rapidly growing opportunities for digital general insurance in the region,” Bhatia added.
SE Asia is ripe for innovation and digitalisation in the insurance industry. Singapore aside, insurance penetration in the region’s emerging markets remains low, but with promising growth. In 2021, the insurance penetration rate of Indonesia increased to approximately 3.06% from about 1.96% in 2013.
Meanwhile, in the Philippines, the insurance industry was estimated at 1.67% of the country’s gross domestic product (GDP), according to Statista, but the figure saw an increase from the previous year.
The region is also home to many insurtech providers such as Singapore’s homegrown insurtech unicorn Bolttech, Eurazeo-backed Qoala, Xiaomi-backed PasarPolis, and more.
“With consistently rising incomes and accelerating digital adoption, we believe Oona is well positioned to capture the tremendous growth opportunity for digital insurance across Southeast Asia,” said Saurabh Agarwal, managing director at Warburg Pincus.
This investment is consistent with Warburg Pincus’ approach of investing capital and resources to create de novo platforms to capture the high-growth opportunities in the region. Examples include ESR, the largest real asset fund manager in Asia; PDG, a leading developer and operator of data centers in the Asia Pacific; and Asia Self Storage, the largest self-storage company in Asia, per the statement.