Dubai-based InsureTech startup Sehteq secures $20m to venture into reinsurance

Sehteq, a Dubai-based health insurance startup, has secured a $20m commitment to set up a reinsurance vertical. According to a statement sent to startup information platform MAGNiTT, the investment was led by their anchor investor 971 Capital.

Sehteq “Arabic for your health”, was born at a startup incubator in Ras Al Khaimah in November 2017, and started operations in February 2018 with the acquisition of its first health insurance provider license as a third-party administrator (TPA). The startup grew with 12 subsequent acquisitions to be the largest provider of low-cost health insurance for individuals and companies in UAE.

There is a limited number of insurance licenses and the last license for TPA was awarded in 2016. New players have to buy one of the legacy businesses. Sehteq acquired three of the 21 existing licenses and plans to acquire two more before the end of the year to reach its one m consumers target.

“This investment will upgrade Sehteq in conjunction with its technology and reinsurance verticals to a new and innovative version of Munch Re – MedNet or Alliance – Nextcare. Ten m dollars is the minimum capital required to start a reinsurance business and the higher the initial investment goes, the more capacity the startup will have to do business,” said 971 Capital senior partner Saad AlJaibeji.

Apart from the formation of the reinsurance company, Sehteq will have an additional investment of $3m to support its technology arm by procuring complementary solutions to enhance its existing AI-based platform.

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Presently, Sehteq automates more than 90 per cent of its back-office operations to improve customer service and overall efficiency.

This additional $3m will also support Sehteq’s plans to acquire and build consumer-centric applications to enhance its 650,000 users’ experience. Sehteq Portals, the technology arm, transitioned from a cost centre to a standalone vertical and has licensed its AI-based sales technology to more than 100 partners.