Revolution or evolution? The path ahead for Asia’s insurtech firms

In The Top Up this week, we look at why insurtechs are looking more like incumbents and why fintech startups like Finbourne continue to raise funds. [Read from your browser]( The Top Up 💵 Welcome to The Top Up! Delivered every fortnight via email and through the Tech in Asia website, this free newsletter breaks down the biggest stories and trends in fintech. If you’re not a subscriber, get access by [registering here]( IN FOCUS In today's newsletter, we look at: - [Why Asia's insurtech players are being co-opted by incumbents]( - Why startups that focus on fintech and AI will likely attract more investment --------------------------------------------------------------- Hello {NAME} A few years ago, I purchased a couple of insurance plans from Aviva and AXA. Over the next few years, I was notified that these plans had been transferred to Singlife and HSBC Life, respectively. The Aviva to Singlife switch is described by my colleague Budi in this week’s featured story. In his piece, Budi explains why the lines between traditional insurance companies and insurtech players have become increasingly blurred. Singlife, for example, grew by acquiring the Singapore operations of old-school carriers Zurich Life and Aviva. In turn, it has now become a wholly owned subsidiary of Japanese major Sumitomo Life. Bolttech, too, isn’t exactly a typical startup. Its founder spent years in the insurance industry, and its investors include traditional insurance companies like Tokio Marine and MetLife. Meanwhile, in this week’s Hot Take, I look at why fintech startups that are riding on the AI wave are likely to attract investor attention, even as investment in the fintech sector as a whole is at multi-year lows. -- Simon  --------------------------------------------------------------- THE BIG STORY [Are Asia’s insurtech players pouring new wine into old wineskins?]( Singlife and other insurtech players have made acquisitions in recent years to expand, putting them closer to becoming industry incumbents.  --------------------------------------------------------------- THE HOT TAKE Finbourne’s US$70m funding shows way forward for fintech Here’s what happened: - The London-based fintech firm [announced]( this week that it had raised US$70 million in a series B round. - Finbourne built a platform to help banks and other financial institutions to organize and utilize a greater share of their data for AI and other modeling purposes. - Highland Europe and the venture arm of insurance firm AXA co-led the round, which values Finbourne at US$356 million post-money. Here’s our take: Funding for fintech startups has taken a hit since 2023. Globally, total investment in the sector was [US$114 billion]( last year. This represents a 42% decline from 2022 and was the weakest since 2017. Finbourne’s series B round is undoubtedly a sign of the times. The company offers [software-as-a-service products]( that help financial institutions manage their data, which is traditionally siloed. One area that Finbourne is helping companies with is on how to handle proprietary data to be used for training models. Given that large-language models (LLMs) have been trained on publicly available data, how financial institutions combine these LLMs with their own “walled gardens” of data will be a determining factor in the value they can derive from generative AI. In a panel discussion at [SuperAI]( earlier this month, Prateek Sanghi, head of consulting and analytics for Asia Pacific at Visa, noted the importance of unique data as a differentiating factor between financial institutions. “Banks may decide they want to keep the data with themselves because that is where the value is,” he noted. This points to one of the trade-offs that financial institutions will have to make as they look to implement genAI. How much tech should they build in-house, and how much should they outsource to third parties? Finbourne is [betting]( that many will increasingly want to work with firms like itself to run their operations, rather than building their own [like Patsnap](. As bank operations become more reliant on AI, such third-party tools could support operations from KYC procedures to handling trade finance documents and customer service. In this scenario, it will be vital that these companies are able to structure, store, share, and secure their data effectively. Expect more startups like Finbourne, which meld the worlds of fintech, data, and AI, to attract investor attention.  --------------------------------------------------------------- NEWS YOU SHOULD KNOW Also check out Tech in Asia’s coverage of the fintech scene [here](. 1️⃣ [FX risk management firm launches with VNG backing]( Australia-based Instantia offers updated market information to help companies with financial planning. 2️⃣ [Wise posts $1.3b revenue, over 200% growth in profits for FY 2024]( In the 12 months ending March 2024, the fintech firm served 12.8 million active customers, rising 29% from the previous period. 3️⃣ [Invoicing platform Paper.id nabs series B funding as transactions grow 30x]( The company was established in 2017 and caters to over 600,000 SMEs across various industries in Indonesia. 4️⃣ [Philippine remittance startup extends series A to $9.6m in Wavemaker-backed round]( BayaniPay is part of a rising crop of fintech firms that want to make the most of the country’s potential in cross-border remittances.  --------------------------------------------------------------- EVENTS HAPPENING You can also check out a curated list of trending tech events [over here]( and Tech in Asia’s signature events [here](. [Tech in Asia Conference Kuala Lumpur 2024 : Malaysia on The Rise on July 24-25]( We'll be joined by some amazing speakers, including Khailee Ng, managing partner of 500 Global, who will deliver a keynote speech on opportunities in Malaysia’s tech ecosystem; Kah Meng Wong, co-founder of Funding Societies, who will share his insights on the Islamic fintech industry; and Dione Song, CEO of Love Bonito, who will talk about business expansion beyond Asia. Don't miss out - [purchase your tickets]( today! [Product Development Conference (Jakarta, 25-26 June 2024)]( What's ahead at the Product Development Conference, coming up next month? We have these sessions lining up for you: scaling secrets from Grab's Head of Mobility, Samir Kumar, product development hacks for the retail industry from Kawan Lama Group's Chief Data and Digital Officer, Renaldi Tjahaya, and building product development strategy for every funding stage from Antler's Partner, Agung Bezharie. Last chance to get 25% off your PDC ticket; this offer ends on June 6th. [Snap up your ticket]( now or risk FOMO! [Tech in Asia x Airwallex Startup Night on June 19]( Forget the elevator pitches and forced smiles of typical networking events. Held on June 19, Tech in Asia x Airwallex Startup Night is about one thing: forging genuine connections that fuel real growth. This isn't for everyone, though. We're handpicking a select group of ambitious founders and startup leaders who are ready to move beyond the hype and achieve real impact. [Register for an invite today!]( ---------------------------------------------------------------  That’s it for this edition - we hope you liked it! Do also check out previous issues of the newsletter [here](. Not your cup of tea? You can unsubscribe from this newsletter by going to your “edit profile” page and choosing that option in our preferences center. In the meantime, if you have any feedback or ideas, feel free to get in touch with Terence, our editor-in-chief, at terence@techinasia.com. See you soon! P.S. Don't miss out on the biggest tech news and analysis. Add newsletter@techinasia.com to your address book, contacts, or safe sender list. Or simply move us into your inbox. Too many emails? Switch to a different frequency or get new content through our [preference center]( or [unsubscribe](. You can also break our hearts and remove yourself from all Tech in Asia emails over [here](  Copyright © 2024 Tech in Asia, All rights reserved. 63 Robinson Road, Singapore 068894