Grab, a Singapore-based competitor to Uber present also in the Philippines and in Malaysia, in January 2019 announced it would sell insurance through its smartphone app.

Grab will open up its ride-hailing app as a platform for direct distribution of insurance policies. The new capability is provided by Chinese partner ZhongAn Online P&C Insurance. The first insurance carrier to join the program is Chubb, with a loss of income protection product (sickness and accident) for Grab’s drivers in Singapore.

Whilst Grab drivers are a captive audience and probably a receptive one too, whether the company can sell insurance to riders is another story. As to the significance for the employee benefits market, this initiative is a good example of a low-cost distribution opportunity of tailored insurance products to a semi-captive, homogeneous audience, in this case gig workers.

Other insurance products for drivers could include private health insurance; accidental death & disability; or pensions; maybe tips could be saved in a pension product? It also is a testimony to the power of an app when it is turned into a wider-ranging platform and a distribution tool, accumulating data about people and usage over time and using it in many ways.

Financial Innovations

The six large Southeast Asian insurance markets now represent about USD 100 billion in premiums p.a. As the Singapore government is bent on cutting margins in all industries by increasing competition, the country is developing into a proving ground for Fintech; financial regulators help by relaxing prudential rules to facilitate experiments.

Two examples:

• Grab’s drivers take cash from riders and credit them the excess fare in a digital account, which creates float and a quasi-bank complete with a substitute ATM network. As of mid-2019, Grab’s app also will offer cross-border remittances; the company is licensed to do so in Singapore and in the Philippines.
• NTUC Income‘s Droplet product reimburses up to 60 percent of surge fares on Grab on rainy days. NTUC Income is a Singapore insurance cooperative; it initially was set up by the National Trades Union Congress (NTUC) and still is a non-profit organization.

Fostering an Ecosystem

Grab also has a venture capital division and an accelerator program for growth-stage startups, Grab Ventures Velocity. As of early 2019, it has invested in four companies:

• GrabCycle, a bike-sharing marketplace app that allows user to unlock and ride bicycles from multiple brands such as oBike, Anywheel, and more.
• Drive.ai: artificial intelligence software and services for autonomous vehicles.
• Kudo: an Online-to-Offline (O2O) e-commerce platform in Indonesia that helps small shop-owners resell products from larger companies, including financial services.
• iKaaz: a mobile payments platform for enterprises, business correspondents and merchants in emerging markets.

If successful, these investments will allow Grab to expand horizontally in bikes, vertically by integrating mobile payments, and to prepare for a driver-less future.