Yes, it is true that traditional insurance can be slow, complicated, and expensive. Microinsurance is a solution to this problem. Microinsurance is simpler than traditional insurance, providing coverage for specific needs during a shorter period at an affordable price. The coverage can be for a one-day trip, for a special event, or for specific medical needs. This may be an appealing option for individuals who do not require the full coverage offered by traditional insurance policies.
Another benefit is transparency. Microinsurance covers a very specific event, which eliminates the need for lengthy discussions with the insurance company regarding coverage, and claims can be processed quickly or even automated.
Customers will benefit from flexible products and an end-to-end digital experience that enables efficiency of underwriting processes. With more products becoming available digitally, Microinsurance policies are becoming increasingly popular.
Furthermore, digital technology can facilitate communication between service providers and insurers, allowing customers to access and manage their policies more easily. Insurance can be more affordable and accessible with Microinsurance and digital solutions.
There is also growing demand for Microinsurance as people are pursuing a wide variety of lifestyle activities and sports, and people are more likely to choose a pay-as-you-go model.
Our recent article "FinTech Trends, the Future of InsurTech (Part 2)" discusses the features, benefits, and market trends of Microinsurance.
This article features YAS Digital's co-founder and CEO Andy Ann sharing his thoughts on Microinsurance and the company's vision with our Managing Partner, Edward Shen. Their discussion focused on the challenges facing the traditional insurance industry as well as how Microinsurance and digital insurance solutions can assist in making insurance more affordable and accessible.
This article is also available on LinkedIn.
Edward: Hi Andy, it's nice to meet you. Could you tell me a bit about your company?
Andy: The mission of YAS Digital, or YAS Microinsurance, is to reinvent existing insurance value chains and to meet the needs and opportunities of the Web3 economy, particularly the growth of DeFi, Web3, and Smart Cities. There are new opportunities in the insurance industry that are not adequately addressed by the traditional insurance industry, and Web3 technology offers the potential to disrupt the traditional insurance value chain.
We are providing insurance products that meet the rapidly changing demands of customers, and we have transitioned our products into on-demand and embedded microtransactions that are scalable on our Green Blockchains.
Edward: What motivated you and your co-founders to start YAS Digital?
Andy: We recognized the need for a new type of insurance solution that was fast, high frequency, and on-demand in the age of Web3, Defi, and Smart Cities (such as autonomous cars and IoT devices). There was a gap between what traditional insurers were offering and the new risks and lifestyles. Blockchains and other smart devices are expected to generate a large amount of real-time data that will drive the transformation of the insurance industry.
That is why we founded YAS Digital and have been developing our insurance products on Green Blockchains since launching the company. Our goal is to make insurance more on-demand, micro-sized, and integrated into transactions. We introduced the first insurance policy incorporated into NFT artwork in early 2021 using smart contracts. Additionally, we are developing a scale-up solution that will allow us to offer a Microinsurance scheme that is borderless and global by the beginning of 2023.
Edward: What are the key features of YAS Microinsurance products?
Andy: On-demand subscriptions, pay-as-you-go, no complicated contracts , no binding, and affordable pricing are among the most important features of YAS Microinsurance products. You may download the YAS Microinsurance App from the Apple App Store or Google Play, and you will be able to activate your coverage within five seconds after downloading the app. With no application or claim form required, we simplify the entire underwriting and claim process from beginning to end. As a very important final point, premiums are affordable since insurance coverage is tailored to the needs of the individual user.
Edward: Can you walk me through one of your popular products and its key features?
Andy: Hiking in Hong Kong has enormously increased in popularity during the pandemic. As you know, some of the hikes can be very challenging. As a result, the number of hiking accidents increased.
HYKE attracts many users due to the fact that it provides insurance coverage for 5 hiking trips on all hiking trails in Hong Kong for a one-time fee of HK$75. As part of the coverage, you will be covered for heatstroke, wildlife and animal attacks, and twisted ankles while hiking alone. The policy covers up to HK$5,000 in accidental medical expenses, HK$2,000 in personal property damage (this benefit is only available if the Accidental Medical Expenses benefit is available), and HK$300,000 in accidental death or permanent disability. With just one tap, you can activate HYKE coverage.
In case of a Hiking accident and the insured makes a claim, such a claim application can be done on the YAS App, and we will process the claim within 5 working days.
Edward: Why is Microinsurance particularly important in Asia?
Andy: The Asia Pacific region is one of the largest markets for Microinsurance, driven in part by the increasing demand for Microinsurance products in developing countries such as China and India. A key factor in stimulating this demand is the low premiums offered by Microinsurance, which are often more affordable. As a result, Microinsurance can play a significant role in increasing financial inclusion and providing protection against various risks.
Edward: How is the business going so far?
Andy: YAS Microinsurance has grown rapidly and gained traction in various markets. We've won multiple awards, including Top Rising Tech Star in 2021 by Deloitte Hong Kong and Global Top 5 InsurTech Watchlist in 2022 by StarUs Insights. We're grateful for the support of our investors like 500 Startups Asia Fund, Beyond Ventures Fund, and ZEMU VC, who are all reputable players in the tech industry. With these partnerships, we've been able to grow and expand, and we're excited about how we can make an even bigger impact on the insurance market.
Edward: What are your expansion plans?
Andy: The market for DeFi, Web3, and Smart Cities is expected to grow significantly over the next few years, with a conservative estimate of over $500 billion by 2028. Our insurance products at YAS Digital target a lucrative, scalable, and sustainable market, making premiums based on holding value or transacted value. Our plan is to expand our reach and offerings to meet the increasing demand for digital insurance solutions in this rapidly growing market.
Edward: Andy, thank you so much for taking the time to speak with me and for introducing me to YAS Digital. I enjoyed the session and appreciated learning more about your company and your plans for the future of Microinsurance. It is clear that you are committed to improving financial inclusion and making insurance more accessible to a broader group of individuals. Once again, I would like to thank you for your time and insights.
YAS in numbers:
YAS Digital was founded in 2019 with the head office in Hong Kong. The company launched Microinsurance products in Hong Kong and is expanding its business to South East Asia.
Over the past year, YAS Microinsurance has experienced impressive growth and success. Some of the key highlights include:
A Year-on-Year Annual Recurring Revenue (“ARR”) growth of 470% (4.7x) from 2021 to 2022
Attractive gross profit margin
An increase of 209% in issued insurance policies in just 12 months
A reduction in product launch lead time from nine months to just 1.5 months, with the number of products offered increasing from four in 2021 to eight in HK and Malaysia in 2022
QIDS Venture Partners is dedicated to supporting and catalysing the developments in Fintech by sharing with our audience Fintech trends and interesting Fintech business ideas. You may forward this article to other investors who are interested in Fintech as well. If you need more information or would like to arrange a meeting with us, please feel free to contact our Managing Partner Edward Shen via LinkedIn or email.
Comments