Southeast Asia’s insurtech sector hits $2.4b in 2023

It was mainly driven by Singlife’s merger with Aviva Singapore.

Despite ongoing macroeconomic and geopolitical uncertainties, Southeast Asia’s insurance technology (insurtech) sector saw a significant rise in deal value in 2023, reaching $2.35b from 27 deals. This marked a notable increase from $538m from 39 deals in 2022 and approached the 2020 high of $2.36b from 32 deals. 

The majority of the sector's 2020 deal value was driven by Singlife’s merger with Aviva Singapore, valued at over $2b.

According to EY and Singlife’s report "InsurTech Landscape in ASEAN – Key Trends and Opportunities Shaping the InsurTech Sector", investors are becoming more selective, focusing on profitable companies with innovative technologies or regional presence. 

Notably, Sumitomo Life's acquisition of Singlife (which valued the Singaporean insurer at $3.5b) and Bolttech’s $246m Series B round highlight this trend.

Conversely, early-stage companies saw limited funding, with only two Series A deals totalling $2.3m.

Singapore continued to dominate InsurTech funding and deal count, accounting for 85% of the deal value. However, Indonesia, Thailand, and Malaysia are increasingly attracting investment due to their favourable demographics and market developments.

Rahul Vardhan, Partner at Ernst & Young Solutions LLP, noted that future fundraising will likely focus on category leaders with a track record of sustainable growth and regional presence. 

“Presence across multiple jurisdictions will also be a key differentiator to allow scale in SEA’s underpenetrated insurance market. However, regional expansion is a capital-intensive endeavour that requires a strong understanding of local regulations to navigate the regulatory hurdles smoothly,” Vardhan said.

The report also observed a rise in exit strategies, including IPOs, with three M&As, two secondary transactions, and one IPO in 2023. 

Strategic partnerships and investments by tech unicorns and traditional financial providers are enhancing InsurTech offerings. 

Notable examples include Tokio Marine’s investment in Bolttech for embedded insurance and FWD Insurance’s investment in Protos Labs for AI-driven cyber risk analytics.