Pinoy insurance startup Saphron secures $1-M seed funding

Saphron, a fintech company formed by a Filipino tech expert, has completed a $1-million seed funding round to “help realize financial inclusion” in Southeast Asia.

The funding came from Sage, a venture fund that targets fintech startups, and Talino Labs, a venture lab that supports companies engaged in digital transformation.

Sage and Talino Labs, in a joint statement released through Talino Labs venture director Micaela Beltran, pointed out: “The financial services industry in the Philippines has undergone its share of disruption this past decade and is now poised for a transformation that will make savings, assistance, and protection products convenient and accessible to millions of Filipinos. Our investment in Saphron is proof of our commitment to make this happen.”

“For industries to leapfrog and become even more relevant to today’s consumers, it’s important to combine the latest technology with in-depth industry expertise. We are excited to have Saphron launch transformative platforms that solve real needs, by way of intelligent, cutting-edge tech in partnership with established companies,” Beltran added.

Saphron founder and chief technology officer, Francisco “Kiko” Reyes Jr., pointed out a “serious need to make financial preparedness radically accessible,” especially in a country exposed to numerous calamities like the Philippines, but where large segments of the population remain either uninsured or severely underinsured.

While inroads have been made, many Filipinos continue to be without protection and access to financial assistance when faced with accidents, hospitalization, climate-driven calamities, diseases, and other emergencies.

Moreover, when purchasing financial products, they are often faced with highly technical jargon and laborious processes that discourage them from availing of the insurance they need.

According to October 2018 data from Lloyd’s, a global insurance and reinsurance market, the insurance penetration rate in the Philippines is at “less than one percent,” similar to Bangladesh, India, Vietnam, Indonesia, Egypt, and Nigeria.

Insurance penetration rate is calculated as a ratio of total insurance premiums to a country’s gross domestic product.

Other data from the Oxford Business Group states that: “The goal of the IC [Insurance Commission] is to have the penetration rate hit 3% by 2019, which is the current average in the ASEAN region.”

More recently, Department of Education secretary Leonor Briones called for “‘year-round insurance” and a “quick response fund” for all schoolchildren in the country, following a road accident in Zamboanguita, Negros Oriental that led to the deaths of five children.

“Filipinos often think that securing protection is a sizeable expense, but in reality it costs more to be unprotected when emergencies occur. When a member of the family is in an emergency, it puts a strain on the entire family’s finances.  In fact, a single episode alone is often enough to put households in debt for long periods,” Reyes pointed out.

“We built Saphron to help companies drive financial inclusion and change the current reality in the country, by using robust technology to bring to the market financial protection and assistance that’s accessible, ultra-convenient, easy to purchase, and simple to claim.”

“Our dream is to create a truly digital experience for our clients’ users, from searching for a suitable cover, to convenience in payments, to simplicity in claims processing. Our platform will be optimized with artificial intelligence and real-time data analytics for underwriting and customer service.”

“It will have a multi-platform payment gateway that can accept payments from mobile payment platforms, which is now the payment method of choice in Indonesia, Malaysia, and Thailand. And we will build a blockchain-based know your customer (KYC) system with biometric identity verification for secure payments processing,” Reyes added.

Saphron’s first client is the Pioneer group, a commercial insurance provider in the Philippines catering to the needs of a broad base of Filipinos. It is also the provider of coverage for migrant workers and the low-income sector in the country.

Reyes expressed excitement over the project: “Our experience in the fintech and insurance verticals have shown us the tremendous potential for disruption and transformation in financial institutions, especially starting with the insurance industry. Meanwhile, Pioneer has demonstrated their leadership in making insurance truly inclusive, through their achievements in micro, migrants, and other retail segments.”

Recognizing the need to engage other players in the ecosystem, Saphron has expressed interest in partnering with other institutions who share a similar vision to strengthen the financial wellness of families and individuals in the region.

“There is now a strong drive toward financial inclusion in Southeast Asia, and to giving consumers a seamless end-to-end customer journey― whether one is getting insurance for the first time or seeking additional protection for the many facets of their lives. We look forward to being a key contributor in enabling financial preparedness in the region,” Beltran closed.

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