Kitabisa, an Indonesian donation and crowdfunding platform, officially announced the launch of Kitabisa Insurance, a sharia-compliant subsidiary, on Wednesday marking its official foray into the country’s challenging insurance sector.
The insurance subsidiary had, in January this year itself, announced the launch of its first product SalingJaga Keluarga.
Kitabisa Insurance plans to address the challenge of Indonesia’s low insurance penetration, which currently stands at 1.4% according to the ASEAN Insurance Surveillance Report 2022. This is below Singapore (12.5%), Malaysia (3.8%), and Thailand (4.6%).
The Indonesian Financial Services Authority’s (OJK) data show that insurance density in the country stood at around 1.8 million rupiah (about $115) at the end of 2022. The authority targets insurance density to reach 2.4 million rupiah (about $153) by 2027. Insurance density is the ratio of premiums collected by insurance companies to the total population of the country.
Despite the challenges, Kitabisa Insurance plans to make a mark by focusing on transparency and technology, it said. Members can monitor collective funds, beneficiary statistics, and claim processes in real-time, aligning with the company’s commitment to good governance and sharia values, it said.
“We’re bringing insurance back to its roots as a practice of mutual assistance. Our goal is to shift the perception of insurance from merely financial risk management to building a supportive community,” said Bryan Silfanus, CEO of Kitabisa Insurance, at a press conference in Jakarta on Wednesday.
The company’s first product, SalingJaga Keluarga, is a pure sharia life insurance offering with premiums starting from 5,000 rupiah per month, up to 61,500 rupiah ($0.32-$3.93) per year. It provides coverage up to 2 billion rupiah ($127.844), along with funeral services and financial planning assistance for beneficiaries. Over 20,000 members have joined in the nine months since its launch, the company said.
According to its financial report, the company recorded a net profit of 2.56 billion rupiah ($163.643) for Jan-August 2024. It had assets of 175.4 billion rupiah ($11.21 million) as of August.
The risk-based capital (RBC) ratio stands at 192.72%, well above the 120% average set by OJK. A risk-based capital requirement ensures that financial institutions have enough capital to sustain operating losses.
As of August 2024, PT Kolaborasi Aksi Indonesia, a subsidiary of Kitabisa, holds 95% ownership in Kitabisa Insurance, with PT Arga Cipta Grande holding the remaining 5%.
Using Series B funds
Vikra Ijas, co-founder and CEO of Kitabisa Group, announced that Kitabisa’s completed the acquisition of the sharia-compliant insurance firm PT Asuransi Jiwa Syariah Kitabisa (previously PT Asuransi Jiwa Syariah Amanah Githa), in October 2023.
The acquisition helped Kitabisa revive its crowd-insurance donation programme SalingJaga, which was shut down in 2021 by the OJK as the firm did not have an insurance business licence.
According to Ijas, OJK informed them that the SalingJaga programme at the time was essentially operating like an insurance activity, resembling sharia insurance. The concept of “a group of people who protect and help each other in times of calamity” is fundamentally the principle of sharia insurance. This insight became a key factor in Kitabisa’s current efforts to buy a sharia insurance company.
“We wanted to adjust the SalingJaga programme, which is why we were specifically looking to buy a sharia insurance company.”
This acquisition was funded by Kitabisa’s Series B investment round, which saw participation from the International Finance Corporation (IFC), which injected $5 million, along with other investors including PT Maskapai Reasuransi Indonesia Tbk (Marein), Northstar, Argor, and Endeavor Catalyst. Early Kitabisa angel investors and Bukalapak founders Achmad Zaky and Fajrin Rasyid, as well as Paragon Corp director Salman Subakat and ESQ group owner Ary Ginanjar, also participated.
“We used part of the investment funds for the acquisition of Amanah Gita, with the rest for capital strengthening, infrastructure building, and strengthening the overall ecosystem at Kitabisa. This provides strong capital for our long-term sustainability,” said Ijas, who also holds the position of chief commissioner in Kitabisa Insurance.
The startup raised its Series A round in March 2019 from Alto Partners and 500 Startups (now 500 Global).
Founded in 2013 by Alfatih Timur and Vikra Ijas, Kitabisa started as a social initiative working with communities and college organisations.
After over a decade of operations, Kitabisa has attracted over 10 million donors, with over 5 trillion rupiah in donations channelled to 300,000 fundraisers.
“We want to continue to grow because donations, zakat, and waqf are assets for philanthropy in Indonesia. So when times are tough, philanthropy can play a role, especially now that the Kitabisa family has grown to include insurance, which becomes a layer to strengthen this ecosystem,” said Ijas.
As a group, Kitabisa oversees several subsidiaries: Kitabisa.com (crowdfunding platform), Kitabisa.org (CSR management services), Salam Setara Foundation (amil zakat institution), Impacts (social marketing implementer), and media and community initiatives including Relawan Gesit, Voluntrip, and Proud Project.
