Insurtech site Ouch! bags 6-figure funds, aims to be first digital takaful operator in M’sia

Insurtech platform Ouch! has announced a fully-subscribed six-figure pre-Series A round, and is set to continue this momentum by exercising its over-allotment for additional investors to come on board.

Ouch! is a one-stop platform and app to educate users about their coverage/risks, purchase and manage digital insurance products, and make claims. 

Offering medical, motor, home, travel, and life insurance policies, its partners include AXA Affin Life Insurance, Berjaya Sompo Insurance Berhad, and Etiqa.

Following this investment, Ouch! is now looking to acquire final approval from Bank Negara Malaysia (BNM) to operate in its regulatory sandbox.

This is in line with the startup’s mission to become Malaysia’s first digital takaful operator with the planned launch of its new digital Takaful product within Q1 2023.

“With the impending introduction of the first pure tech-enabled takaful solutions provider, this successful round of funding will allow us to deliver affordable cover at a bigger and wider scale,” said Shazy Noorazman, CEO of Ouch!.

“We are proud to have received the vote of confidence from several big players and it is a sign that our approach is being recognised and well received by the market.”

In March 2021, Ouch! received RM1.5 million in seed funding from Vynn Capital and Temokin, along with a few angel investors. It had also initially planned to raise a pre-Series A round later that year.

What’s takaful insurance?

Takaful is the Islamic alternative to insurance, whereby a group of people agree to contribute a certain amount regularly to accumulate a pool of money.

This pool of money is managed by a third party, and will be used to financially support a group member during an unfortunate event.

Takaful is Shariah-compliant, meaning that it’s socially responsible and mutually disperses risks among participants, does not have excessive interest rates, and avoids uncertainty. The takaful surplus is also distributed to participants, instead of belonging to the insurance company.

A user does not have to be Muslim to sign up for a takaful plan and receive its coverage.

The goal to become Malaysia’s first digital takaful operator

In late 2022, BNM announced that it had five licences up for grabs for digital insurers and takaful operators (DITOs) come 2023.

The central bank had issued an exposure draft on licensing and regulatory framework for DITOs, which marks a new type of entry into digitisation.

As such, it expects DITOs to enhance the financial resilience of consumers whose protection needs are currently not served or underserved, and offer diverse products with good customer experiences.

Similar to how the digital banking licences were given out, there will be an observation period for licenced DITOs called a foundational phase that could last from three to five years.

“Obtaining the licence will expand our market and thereby potential, significantly. This is all in line with our ambition to be a first-of-its-kind digital takaful operator especially focusing on the younger generation, bringing our signature approach to insurance to a new space,” Shazy said in a press release. 

“There are now multiple generations that either don’t see the importance of insurance, or can’t quite wrap their heads around the layers of insurance offerings and processes.” 

This is exactly what Ouch! wants to tackle, with a simple, straightforward product that Shazy is confident resonates with the youth of today and tomorrow.

To spearhead the brand in this direction, Ouch! also announced the appointment of a board member and advisor, Mukesh Dhawan.

He is the former CEO of Zurich Takaful Malaysia Bhd, with 25 years of experience in the finance and insurance industry. He is also a current angel investor and shareholder in Ouch!.

Featured Image Credit: Ouch!