E-commerce platforms such as Shopee expand into insurance, drawing closer regulatory scrutiny

E-commerce giant Shopee is moving beyond retail into insurance distribution on its platform.

The offerings include a pet insurance product recently rolled out with MSIG Insurance and Sea’s digital financial services arm, Monee.

But as online marketplaces play a bigger role in insurance distribution, questions around governance and oversight of these digital sales channels are coming into sharper focus.

A Monetary Authority of Singapore (MAS) spokesperson told The Business Times that financial institutions “may distribute their products and services through various channels, such as agents and... the use of digital media”.

Last September, the regulator published a set of guidelines on standards of conduct for digital advertising activities, which set out expectations for financial institutions to exercise strong governance and close oversight over their digital advertising activities.

These developments come as insurers and financial services firms increasingly partner e-commerce platforms to reach consumers.

Shopee’s recent pet insurance offering included free coverage of one month, with the plan providing coverage of up to S$100 for outpatient and inpatient treatment resulting from accidental injury, with plans available from as low as S$0.20 a day.

‘Encouraging response’

MSIG and Monee said Shopee’s 12.12 campaign generated an “encouraging response” for the new pet insurance product in light of the growing demand for accessible pet insurance, but did not give details.

Steven Leong, head of retail distribution at MSIG Singapore, said the move reinforces its commitment to making insurance “accessible and part of everyday life”.

The pet insurance product is distributed by MoneeInsure Agency on Shopee Singapore and underwritten by MSIG Insurance.

MSIG said Shopee itself functions only as a marketplace, and the insurance page on the platform is owned and operated by MoneeInsure Agency.

All insurance-related queries are directed to MSIG, indicating a separation between the e-commerce platform and insurance operations, in alignment with regulatory expectations.

MoneeInsure Agency, the insurance unit of Monee, is registered with the General Insurance Association of Singapore (GIA) as a general insurance agent, as is required, to ensure accountability.

Industry players said that as the principal insurer, MSIG is responsible for ensuring that the agency meets professional and technical standards when marketing insurance products to the public.

Beyond pet insurance, Shopee already distributes other insurance offerings. MSIG’s travel, motor and personal accident insurance products are available on the platform.

Not a new phenomenon

The distribution of insurance on Shopee is not a new phenomenon. Last year, Peak3 and Lazada announced a collaboration with insurers including AIA, Astra, Income Insurance, MSIG and Sompo to offer insurance products in property and casualty, accident and health, as well as life segments.

It was announced at the time that the plan is to roll out insurance offerings in Singapore, Malaysia, the Philippines, Vietnam, Thailand and Indonesia. When asked by BT about the take up rate so far, Lazada declined to comment.

Not all e-commerce platforms, however, are taking a direct role in insurance distribution.

Carousell said it does not distribute insurance products as an underwriter. While it previously had a limited partnership with an insurer for auto-related products, this involved linking users to the insurer’s website rather than allowing applications to be completed directly on its platform.

Upholding professionalism

Insurance distribution in Singapore is governed by the Insurance Act, which defines the parties who may act as insurance agents and the requirements they must meet, GIA said.

Under the Act, a person or company is generally considered to be acting as an insurance agent if they receive insurance proposals or issue policies, collect premiums, arrange insurance contracts, earn commissions tied to premium values, or provide insurance sales or product advice.

To ensure accountability, individuals and businesses must register with the GIA’s Agents’ Registration Board (ARB) through the principal insurers they intend to represent before distributing general insurance products.

In the case of the new pet insurance product, MoneeInsure Agency is registered with GIA’s ARB as a general insurance agent of MSIG.

Only life insurance agents are licensed by the MAS, as life insurance products tend to be more complex and have longer tenors, therefore increasing the potential impact of misconduct.

The GIA has cautioned that parties who act as insurance agents without proper registration may be referred to the Monetary Authority of Singapore (MAS) for enforcement action under the Insurance Act.

The regulatory framework also recognises different types of insurance agents, including individual agents, corporate agents and trade-specific agents whose main business is not insurance.

Members of the public can verify an agent’s registration status and authorised insurers through the ARB’s online search function.

Against this regulatory backdrop, industry observers say the expansion of insurance sales on e-commerce platforms is likely to continue, driven by insurers’ push to meet consumers where they already transact.

MSIG and Monee said they will continue to build on the momentum of the pet insurance launch through ongoing marketing efforts, including the continued offer of a complimentary one-month plan.

Source: The Business Times © SPH Media Limited. Permission required for reproduction.

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