The insurtech’s 2023 $246 million Series B fundraise is paving the way to bring its US platform biz to Asia.
Robert Schimek, Singapore-based group CEO at bolttech, says the insurtech company is using a blockbuster fundraise to knit together its two businesses. In the US it operates an insurance marketplace called Bolt Exchange. In Asia and Europe, it is growing an embedded protection business built on mobile phones.
“It’s hard to visualize how these models connect,” Schimek told DigFin.
The US business is a platform. Insurers, insurtechs, independent agencies and other distributors can connect it to their existing business to build out their offering. For example, a carrier might specialize in home insurance but lack auto coverage; they can tap into the Bolt network of other carriers to add what they need.
But in Asia, Bolttech is specializing in offering consumer protection of handphones and other personal digital devices. “It’s a hero product,” Schimek said.
Bolttech is not an underwriter. It partners with consumer-facing groups such as telecommunications companies, and sources the balance sheet from other insurers, such as Allianz Partners.
“We protect the phone, but a telco wants more,” Schimek said. The handphone is the thin end of the wedge. From there, bolttech can protect all the home devices connected to a router; provide travel protection when there’s a need for data roaming; and provide cyber cover in case of a hack.
“It’s the same mindset,” Schimek said: “Protect the device, to your consumer electronics, to your travel, to cyber, to even the home or vehicle.”
For example, the company recently acquired a Polish company, Digital Care, that specializes in device insurance. It also has capabilities downstream, such as handset repairs and replacements. The company has been rebranded as bolttech.
Richard Li’s idea
This double-helix of a business launched in 2020, but the origins go back more than 12 years.
At that time, Schimek was president and CEO of AIG’s commercial operations in New York. Richard Li, son of Asia’s richest tycoon, was looking to build his own insurance business, which became FWD. He recruited several ex-AIG executives.
AIG was by then a transformed business: once a giant bestriding Asia and the US, it was nearly destroyed during the 2008 financial crisis, and forced to divest its Asia life insurance business: that became AIA. AIG’s main focus moved to the US but it remained active in Asia as a general insurer.
Li convinced Schimek to join FWD and Schimek moved to Singapore in 2018 to run the commercial side of the business.
But the Hong Kong tycoon had more in mind than just running a life insurance company. Li operates his business empire through his longstanding investment firm, Pacific Century Group. It has controlling stakes in PCCW, a Hong Kong telco that in turn owns HKT (once up a time, Cable & Wireless). Richard Li’s brother Victor inherited the Hutchison business, which operates another telco, 3.
Schimek says Richard Li had the idea of a P&C business that would complement FWD’s life and health lines, specifically by leveraging the telco business. Schimek complemented that with his AIG experience.
“I had learned at AIG don’t focus on balance sheet. AIG had a big footprint and we hunted together with AIA, but we stayed balance-sheet light so we could grow regardless of market conditions, at times when an insurer can’t take on more risk.”
Rapid expansion
Schimek took on the role to launch what became bolttech in 2020, with a focus on telco, balance-sheet light, and fast growth.
Bolttech raised $246 million in its 2023 Series B, making this the largest fundraise ever for an Insurtech company. Tokio Marine, MetLife Next Gen Ventures, and impact investor LeapFrog led the round.
By now bolttech is in 35 markets and adding more. Its technology is all proprietary. It needs funding to support its tech, hire people in existing markets, and have money ready for M&A, such as the Digital Care acquisition.
But the grand strategy is to connect the marketplace in the US with the device-protection businesses in Asia and Europe.
“We’re trying to connect Bolt Exchange, because we need the marketplace,” Schimek said. “In the US, we start in the home, but we need to be able to protect what’s inside it. We’re going in both directions.”
First, the startup is slowly bringing Bolt Exchange to non-US markets. Every new market has its own regulations, consumer patterns, and partnerships. Setting up a platform requires a brokerage license in each jurisdiction, which is tricky: bolttech can acquire a license, but that means acquiring people and operations it may not want.
Regulators frown on acquirers immediately shedding staff, but at the same time bolttech is hiring new people to meet the needs of its new businesses, so managing the balance between talent and politics is complicated. This is one reason why market entry is a costly exercise. Schimek says the company is gradually rebranding its local units.
The expansion of Bolt Exchange includes broadening its capability. Bolt US was created as just a marketplace, matching consumers with P&C product providers. But now insurers are keen for embedded their products in other digital places where their customers may be (eg a travel site).
Distribution partners
The insurtech is adding distribution partners. One Ascend Money, a Thailand-based tech company providing cloud, data center, and digital solutions in fintech and e-commerce.
Other partners are more traditional, such as Allianz Partners and Tokio Marine.
Of these, the first bolttech struck outside of the US was with Allianz Partners. This is a unit of Munich-based Allianz Group, a global leader in P&C underwriting.
Allianz Partners serves business customers with anything that the parent underwriter doesn’t do. It’s a way for the insurance group to deepen its relationship with major corporate customers. Now part of that package may include embedding other products that Allianz doesn’t have, but which can be sourced through Bolt Exchange.
Allianz Partners also acts as a reinsurer.
Schimek explained: “We need an underwriter and a reinsurance partner. For device protection, we use a front-end carrier. We know this business better than any insurance company.”
Reinsurers such as Allianz do the underwriting, and the only risk bolttech takes is in the physical phone. Bolttech handles product design, pricing and third-party administration. Allianz or other players take that risk back through a reinsurance agreement on the device business.
Technically bolttech ends up serving as a reinsurer. The license with a telco or with an Apple or Google provider is for a customer-facing underwriter, but it retrocedes the business to bolttech’s P&L. But bolttech shares the risk with Allianz. Allianz gets bolttech’s fintech skills and niche market knowledge, while bolttech benefits from Allianz’s distribution, licensing, and risk sharing.
“A four-year old fintech can help a 150-year-old insurer,” Schimek said.
He noted that there’s no cross-ownership between bolttech and FWD, although FWD is a distribution partner.
Another PCCW-invested business is MoneyHero, a pan-Asia financial comparison website. Asked why this couldn’t substitute for Bolt Exchange in the region, Schimek says MoneyHero’s business model is too different. But it is a distribution partner.
Asia Pacific is the largest region for bolttech’s business, with the fintech now quoting $50 billion in premiums annually worldwide. It continues to build new telco, fintech and underwriting partners for distribution. Now it has the capital behind it to attempt to connect the double helix.
