Hong Kong’s insurance regulator has granted the city’s first virtual license to a homegrown insurtech start-up named Bowtie Life Insurance Company Limited, as part of the government push to develop Hong Kong’s online financial services.
The digital licence will allow Bowtie to directly offer insurance protection to customers without "any insurance intermediaries," said Bowtie in a statement released on its website on December 20. Its products and services will be sold through computers or mobile phones, in which the involvement of any agents or banks is forbidden.
Bowtie, founded in November 2017 — one month after Hong Kong’s Insurance Authority introduced a licensing fast track for online-only insurance companies, also announced that it has secured a HK$234 million (US$30 million) series A round of financing from insurance firm Sun Life Hong Kong Limited. Sequoia-backed HK X-Technology Fund, chaired by Tencent head Pony Ma Huateng, also poured money into the new round.
The online-only licensing fast track, known as the "Fast Track" pilot scheme, was kick-started in October 2017 to accelerate an approval process for online-only insurance firms, which used to take about 12 to 18 months, said John Leung Chi-yan, chief executive of the Insurance Authority, at a regulatory conference to launch the scheme.
Virtual insurers are joining Hong Kong’s insurance arena at a time when the total life insurance premiums in the city hit HK$347.8 billion (US$44.43 billion) in the first nine months of 2018, up 7% from a year earlier. The market is also crowded, with 48 life insurers and 19 composite insurers operating through about 100,000 agents and bank staff, according to statistics provided by the authority in late November.
Bowtie has no plan to compete with traditional insurers, South China Morning Post reported on December 20, citing Bowtie’s co-CEO and co-founder Fred Ngan. "We want to target a younger generation of customers who are tech savvy and like to do everything by themselves."
Ngan said that the company plans to launch life insurance products in 2019 which will only cost policyholders a few hundred Hong Kong dollars a month.