Warburg Pincus commits $350m to SE Asia insurance platform
Warburg Pincus has seeded a digital insurance platform for Southeast Asia with a USD 350m equity commitment and two recent acquisitions from Spain-headquartered insurance giant Mapfre.
The acquisitions include ABDA, a general insurer in Indonesia that was carved out for EUR 56.6m (USD 55.3m) last March. The second is MIIC of the Philippines, a diversified non-life insurance provider that has operated in the country since 1934, one year after the establishment of its parent.
ABDA’s gross premiums were IDR 572.8bn (USD 37m) in 2020, down 26% on the prior year. Net income improved 58% during 2020 to IDR 138.2m. The Jakarta-listed company’s market capitalisation is currently about IDR 4.1trn.
MIIC’s gross premiums were PHP 1.4bn (USD 24m) in 2020, down 9% on the prior year. Net income came to PHP 27.7m in 2020 versus a PHP 90.4m loss in 2019. Prior to acquisition, it was 75% owned by Mapfre and 25% by Manila-based Insular Life Assurance.
Warburg Pincus is combining the companies under the name Oona Insurance with a view to becoming the pre-eminent digital general insurance platform in Southeast Asia. They will be rebranded as Oona in due course.
Much of the strategy is based on the idea that general insurance remains underpenetrated in the region. The plan includes introducing new products that are not already part of the combined ABDA and MIIC offering, such as travel, health, and coverage related to internet, e-commerce, and digital payments.
“Legacy systems and mindset amongst incumbents provide a real opportunity to create a truly customer-focused organisation with a strong tech and brand spine,” Abhishek Bhatia, a 25-year insurance industry veteran brought in as Oona 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.”
Digital insurance appears to be emerging as a vertical of sufficient scope to support dedicated platforms in Southeast Asia. Last June, France-based Eurazeo set up a USD 200m insurance technology fund for the region with an unnamed global insurance company as the lone LP.
The creation of de novo sector platforms is an established playbook for Warburg Pincus. The standout example is Asia’s largest logistics developer ESR, which the GP seeded in China in 2011. An exit was completed in early 2021 generating a 10x return, but Warburg Pincus re-invested a few months later when ESR acquired ARA Asset Management for USD 5.2bn.
Warburg Pincus was active in Southeast Asian digital insurance last November, when it joined Insight Capital and Bow Wave Capital in a USD 300m round for Mynt, a Filipino financial services app valued at USD 2bn. At the time, Mynt’s GInsure offering was said to account for one-third of all new insurance policies in the Philippines.
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