Warburg Pincus investing $350m to set up SE Asia insurance platform Oona

Warburg Pincus has announced a $350 million equity commitment to build Oona Insurance (aka Aseana Insurance), a digital general insurance platform in Southeast Asia.

Warburg Pincus has partnered with veteran manager Abhishek Bhatia to set up the platform, a press statement said.

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 Philippines’ Mapfre Insular Insurance Corporation (MIIC). Both companies, which have decades of experience in their markets, will be renamed Oona Insurance.

With the acquisition of ABDA and MIIC, Oona offers a wide range of general insurance products including motor, property and group health insurance. Oona also plans to cover travel and release products that arise due to the increasing acceptance of internet, e-commerce and digital payments.

Oona plans to implement a value-added strategy to enter the region’s digital general insurance platform with operations in several key markets in the region.

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Founded in 1982, ABDA offers insurance products for vehicles, homes, property, transportation, travel, accident and health insurance. The company went public in 1989. In the first half of this year, ABDA recorded an annual profit of 67.35 billion rupiah (US$4.34 million). This was down 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 Spanish insurance company MAPFRE Internacional SA, according to a disclosure by ABDA to the Financial Services Authority of Indonesia (OJK).

Meanwhile, Mapfre, founded in 1934, offers insurance services for fire and allied lines, motor vehicle, personal accident, casualty, liability, engineering, marine, surety and micro insurance. Prior to the acquisition, Mapfre Insurance Philippines was 75% owned by MAPFRE of Spain and 25% by Insular Life Assurance Co. Ltd. from the Philippines.

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“I am delighted to be working with Warburg Pincus to build Oona into a truly world-class company,” said Abhishek Bhatia, Oona Group CEO, in a statement.

“All assets and operations will be consolidated under a coherent operating model and common brand and technology stack, positioning us well to capitalize on the rapidly expanding digital property insurance opportunity in the region,” added Bhatia.

Southeast Asia is ripe for innovation and digitization in the insurance industry. Apart from Singapore, insurance penetration in the region’s emerging markets remains low but with promising growth. In 2021, Indonesia’s insurance penetration rate increased to about 3.06% from about 1.96% in 2013.

Meanwhile, the insurance industry in the Philippines was estimated at 1.67% of the country’s gross domestic product (GDP), according to Statista, but the figure was up from a year earlier.

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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 steadily rising incomes and accelerating digital adoption, we believe Oona is well positioned to capitalize on the tremendous growth opportunities 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 capitalize on 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 Asia Pacific; and Asia Self Storage, the largest self-storage company in Asia, according to the statement.

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