SINGAPORE: Amid concerns about job security, a local peer-to-peer (P2P) start-up has launched an unemployment insurance product – a first in Singapore.
But unlike conventional insurers, Bandboo focuses on creating “digital communities that allow users to cross-insure one another” against the risk of retrenchment, said co-founder and CEO Ashley Kee. “What makes us different from an insurance company is that we are not underwriting the risk.”
The start-up, founded by Mr Kee and his three partners, introduced its first two insurance products in May with the aim of disrupting the industry. One of them is a P2P unemployment insurance that helps workers “alleviate the shock of a sudden retrenchment”. The other is a retrenchment benefits scheme targeted at businesses.
While income protection and unemployment insurance are relatively rare in Asia, they are “mature products” in developed countries such as Canada, said Mr Kee. With the economic uncertainty putting a squeeze on the local job market, the entrepreneurs saw an opportunity to plug a gap in the market.
For its unemployment insurance, Bandboo’s primary target group is young adults below 40 years old who have heavy commitments, such as mortgages and young children. This group is also often identified in surveys as the ones who have done the least financial planning, said Mr Kee.
“This product really has to do with the macro economic factors we have seen over the past few years… It will hopefully give someone time to get back on his feet, pay bills as he looks for a new job and not have to accept the first one that comes his way, which may not be suitable.”
Bandboo’s unemployment insurance, which lasts for a year, requires consumers to pay a membership fee of S$9.99 and a premium of S$35 each month. Members who are retrenched will receive a payout equivalent to three months’ worth of salary and spread over five months. The total payout is…