Home-grown digital insurer Bowtie receives Hong Kong’s first virtual insurance licence

It is a significant move in pushing insurtech in Hong Kong to give more choice for customers.” The entry of virtual insurers adds to an already booming …

Hong Kong’s insurance watchdog has issued its first virtual licence to an online-only insurer, as the government makes strides to boost the city’s internet finance services.

The recipient of the digital licence, which will allow it to sell insurance products by computer or mobile phone, is Bowtie Life Insurance, a home-grown start-up. The licence forbids Bowtie from using any agents or banks to sell insurance.

According to co-founder and co-chief executive Fred Ngan Yiu-fai, that is where virtual insurers have the edge.

“The online business model allows us to run at low cost – we only need about 50 people to develop the technology and provide customers services,” said the 35-year-old Hongkonger. “We don’t need to share any commission with agents or banks so we have a cheaper distribution channel than the traditional insurance companies.”

The Hong Kong Insurance Authority launched a fast-track approval system for insurers which operate purely online late last year, and it has attracted a number of applicants. Bowtie received its licence within about a year, faster than a traditional insurer would expect to wait.

“Virtual insurers still have to follow the same high-capital and conduct requirements as traditional insurance companies,” said Clement Cheung, chief executive of the regulator at an insurance forum last week.

“The introduction of virtual insurers will allow start-ups that use new technology and innovative business models to serve customers. It is a significant move in pushing insurtech in Hong Kong to give more choice for customers.”

The entry of virtual insurers adds to an already booming life insurance market in Hong Kong. Total life insurance premiums in the first nine months of this year reached HK$347.8 billion (US$44.43 billion), up 7 per cent from a year earlier.

It is however a very crowded market, with 48 life insurers and 19 composite insurers – which cover both life and general insurance – operating via about 100,000 agents and bank staff.

Hong Kong fintech fundraising slows down to a trickle as China steals the show in the first half

“We do not plan to compete with traditional insurers,” said Ngan. “While they sell more sophisticated policies involving higher sums, we target simple life and medical products which don’t need much explanation and which enable the customers to buy and make claims all by themselves via their smart phones or computers.

“We want to target a younger generation of customers who are tech savvy and like to do everything by themselves.”

Bowtie intends to launch life insurance products next year which will only cost policyholders a few hundred Hong Kong dollars a month.

“The traditional insurers and agents would not be interested in these type of products as the profit margin is not high. This provides us with a business opportunities,” said Ngan.

Ngan, who studied in Canada, worked as an actuary for 15 years in the US and Canada.

He set up Bowtie with another actuary, Michael Chan, while the roughly 50 staff are either actuaries or technicians.

“We called the company Bowtie because people only wear a bowtie at important moments such as a wedding or graduation. We believe life insurance is as important,” he said.

Huge response to Insurance Authority’s online-only fast track licensing proposal

The company secured Hong Kong’s largest series A funding of 2018, securing HK$234 million (US$30 million) from investors including global insurer and Sequoia-backed HK X-Technology fund – chaired by Tencent boss Pony Ma and Canadian insurer Sun Life.

Cheung said Hong Kong Insurance Authority will continue to issue virtual insurer licences next year.

Among the candidates will be home-grown online pet insurer OneDegree, which was co-founded by former JPMorgan banker Alvin Kwock Yin-lun to offer medical insurance cover for the half-a-million cats and dogs in Hong Kong.

The Hong Kong Monetary Authority, the city’s de facto central bank, will also issue the first batch of virtual bank licences in the first quarter of next year.

James Lloyd, partner and Asia-Pacific fintech leader at EY, said that virtual insurance could work in Hong Kong.

“The outlook of virtual insurance is somewhat comparable to the virtual banking opportunity, Lloyd said. “Consumers are arguably ‘over-banked’ in Hong Kong, but there is considerable scope to improve customer experience, product reach, and price transparency. It’s the same for insurance. We believe that the introduction of digitally native competitors, operating in a well-regulated environment, can only be beneficial for end-customers.”

Related Posts:

  • No Related Posts

With Alphabet pouring $375M into Oscar, is Google coming for your healthcare data?

Previously, Alphabet’s growth equity investment fund – CapitalG – and GV (Google Ventures) have both invested in Oscar. No one at Alphabet’s press …

When it comes to healthcare transformation, the insurance marketplace has spawned quite a few tech-enabled startups aiming to redefine that complex and frustrating segment. Prominent among them is New York-based Oscar Health, and not just because co-founder Josh Kushner happens to be Jared Kushner’s brother. Spawned after the Affordable Care Act was passed, it began life a company offering individual insurance on the marketplace. Since then, it has made strides in the market by aligning itself with healthcare providers like the Cleveland Clinic.

The other insurance startup names that come up as examples of data-driven, consumer centric companies focused on reducing costs are San Francisco-based Clover Health and Minneapolis-based Bright Health.

However, Oscar is seemingly leaving behind its competitors at least temporarily. Its profile got pushed to the stratosphere Tuesday when the company revealed through a detailed Q&A with Wired that Alphabet, parent company of Google, just injected a cool $375 million into the company. YouTube founder Salar Kamangar, the CEO of YouTube and apparently a data expert, will be joining Oscar’s board.


“This investment will put Oscar well over a billion dollars in investment,” said Jodi Hubler, a managing director with Wayzata, Minnesota-based Lemhi Ventures, in an email forwarded by a representative. “What’s interesting to note is Oscar is not just innovating insurance, they also have projects where they’re building clinics, electronic health records, and claims systems. That is a big investment waterfront – literally racing against hundreds of other startups who are trying to do the same thing in each one of those categories, plus the incumbents.”

Alphabet’s investment, of course, is further proof that the consumerization of healthcare is a no passing trend. The terms of the transaction aren’t available as Oscar executives aren’t commenting, although, in the Wired interview, Oscar CEO Mario Schlosser stressed that Alphabet is a financial investor only with whom no patient-level data is going to be shared.

One expert observer of the market — who hailed the deal as a “validation” for this new consumer-focused, data-and-outcomes driven insurance model — declared that this cements his belief that Google is out to acquire healthcare data. It’s missing piece of the consumer puzzle.

“My suspicion is, as borne out by this transaction, [that] these tech companies will be able to take real risk on the populations because they are going to know more about these populations and be able to underwrite the populations far better than maybe some traditional healthcare companies,” said Michael Greeley, co-founder and partner at Flare Capital, a venture capital firm that has invested in Oscar competitor Bright Health, in a phone interview. “They want to continue to think about their portfolio of assets from YouTube to Search. They know an awful lot about us. They don’t know a lot about our healthcare conditions. This puts them into that space to have a more holistic perspective of who each of us are.”

This perspective is squarely at odds with patient privacy and in response to a question about respecting such privacy, Oscar’s Schlosser observed that Alphabet has “been an investor for the past three years and there’s obviously been no sharing of data before. That’s going to continue to be the case.”

Greeley wasn’t convinced when informed of this response.

“I think this is still the wild west of data privacy rules and the rules areone or two or three years behind the reality of the markets,” he said. “I don’t think they have nefarious intentions but there is a little bit of a land grab for these datasets. There’ll be ways to anonymize around populations where they will be able to draw inferences on certain types of behavior.”

Previously, Alphabet’s growth equity investment fund – CapitalG – and GV (Google Ventures) have both invested in Oscar. No one at Alphabet’s press office immediately responded to a request to interview Kamangar who is joining Oscar’s board as part of the new investment.

The other piece of news that came out of Schlosser’s interview is that fueled by the new money, Oscar plans to enter the Medicare Advantage market by 2020. Today, it serves the individual and small employer market. [Medicare Advantage plans typically cover services like dental, vision and other health and wellness products that are’t covered by Medicare.]

That did not bother Vivek Garipalli, CEO of Clover Health, which sells insurance in the Medicare Advantage market and like Oscar, also has GV as an investor. Earlier this year Clover was reported to be having some trouble in meeting financial projections and satisfying customers.

“We welcome Oscar Health to the Medicare Advantage space. The increased competition to deliver better healthcare options is excellent news for America’s seniors,” Garipalli said in a statement emailed by a company representative.”Not only does Medicare Advantage provide an unrivaled opportunity to help American seniors live happier, healthier and longer lives, it is also a thriving market in which to run a successful business. Medicare Advantage is already a $200 billion industry, with more than a third of all Medicare beneficiaries – 19 million people – enrolled in an Advantage plan.”

If emerging startups companies aren’t too concerned with Oscar’s (or at least aren’t showing it), neither should insurance giants like UnitedHealth Group and others, believes Flare Capital’s Greeley.

“I think there is a knee jerk reaction that the sky is falling that some industry commentators have,” he quipped. “Oscar has a small fraction of members compared with what the national insurers have.”

Meanwhile national insurers are not sitting idly either.

Take Unitedhealthcare, the aforementioned largest health insurance company in the nation. The Minnetonka, Minnesota company has made an investment in a new kind of health insurance company – Bind – that offers on-demand health insurance to employees of self-insured companies. Members get a core coverage based on existing health conditions, but can avail of add-on coverage as health conditions — say, joint replacement — crop up. Kind of like the way you can add TV channels to your streaming TV service or cable network.

To Bind CEO, Tony Miller, his company is the alternative way to transform insurance as it brings an on-demand flavor to healthcare at a time when that experience is ubiquitous to consumers’ everyday lives.

“I have met with many insurance companies over the last two years as we were building Bind. Will it be easier for a platform company to disrupt health—which, by the way, is a closed ecosystem of data, by many, many regulations—or will it be easier for insurance companies to invest in all of the modern tech capabilities to rewire themselves as platform companies when it comes to health? What I see is an ecosystem that knows it is a race,” he said in an email forwarded by a representative. “If you were to disrupt the insurance industry, you do it with better products. And better experiences. What Bind did is say: how does a new modern tech approach change insurance products? That has to be the focus first; that is why we invented on-demand health insurance. In the end, we will all be measured on how viral our products are to consumers.”

Taken cumulatively, all these new ideas couldn’t come soon enough although they still have to prove their worth. Customer satisfaction with health insurance companies fell to a 10-year low in 2015 though have improved a bit in the last two years per the American Customer Satisfaction Index.

Photo: freedigitalphotos user Salvatore Vuono


President and CEO of BioEnterprise, Aram Nerpouni, sheds light on the biomedical investment and innovation climate in the Midwest and how Cleveland is contributing to the region’s growth

Bio Enterprise


A conversation with Sarah Hogan of McDermott, Will & Emery


Related Posts:

Your Health Insurance Company Probably Knows More About You Than You Realize

As an analyst at IBM Watson Health told ProPublica, information they collect should be considered “a data insight. But it’s not necessarily a fact.” …

Health insurers are interested in your data, according to a recent ProPublica report, and they may be using it to raise rates or to discriminate against groups of people—but it’s hard to know, since companies got squirrelly when asked exactly what they’re doing with the data they collect.

This isn’t just your Facebook clicks—it’s stuff you can’t possibly opt out of, like criminal records, property records, and consumer data from a variety of sources. Some of these companies know where you live and all the phone numbers you’ve had in your life. Others say that they have information on what magazines you’ve subscribed to and purchases you’ve made.


Yes, This Is Legal

Even though insurers use this data to try to figure things out about your health, it’s not considered health information in the same sense as your medical records. A law called HIPAA gives you some control over who has access to those.

And even though insurers and data brokers might calculate health scores based on the data they collect, you don’t have any legal right to see those scores or correct mistakes, as you do with your credit reports.


Insurers can’t use this data to raise rates for everyone—yet. The Affordable Care Act requires that insurers offer the same price to everybody in a given area. They can adjust the price based on your age, how many people are in your family, and whether you are a smoker, but that’s it. They can’t charge more if you’re female (as many insurers did, pre-ACA) and they can’t change your rate based on your health status.

But there are plenty of ways to use this data to discriminate. First, short-term health insurance plans don’t have to follow that rule, so insurers could adjust rates based on what they believed to be your health risk. If future legislation further erodes the ACA, this could become an issue for a lot more people.


One insurer told ProPublica that they use this data to “supplement its claims and clinical information.” I can’t help but wonder if some companies use scraped information to deny claims, as Tracy Clayton says happened to her when she posted beach pics on social media while being treated for mental health issues:

But It’s Still Problematic

Even without raising individuals’ rates, insurance companies can use this data in ways that makes life harder for some of us, or that discriminates against people who are already disadvantaged. For example, people in poorer neighborhoods might be more likely to be sick, and an insurer could decide not to offer some or all of those plans in certain areas.


Insurers could also use personal information for marketing, which is legal. If they find hobbies that are more popular among people who tend to be healthy or lower cost, then they could advertise in a way that targets those people.

And so far there is no surefire way to keep your data out of insurers’ or data brokers’ hands, nor is there any way to see all of the information they have on file about you. Perhaps scariest of all is that the companies don’t know if all of their information is correct or if their assumptions are true. As an analyst at IBM Watson Health told ProPublica, information they collect should be considered “a data insight. But it’s not necessarily a fact.”

Related Posts:

  • No Related Posts

Digital Insurance Group Signs Multi-Year Collaboration Agreement with Zurich Insurance Group

Theo Bouts, CEO of Zurich Insurance Mobile Solution (ZIMS) said: We are excited about this collaboration with DIG, a leading insurtech innovator, …

AMSTERDAM & ZURICH–(BUSINESS WIRE)–Digital Insurance Group (DIG) is pleased to announce that it has entered into a multi-year collaboration agreement with Zurich Insurance Group, adding another blue chip name to its customer list. DIG will use its cutting-edge technology stack to support Zurich Insurance in developing innovative mobile solutions that are continually optimized using deep customer data analytics. The commercial agreement is complemented by a EUR 15 million funding round co-lead by Zurich Insurance and Finch Capital to further drive the global growth of the company.

Digital Insurance Group is a next generation technology partner to insurers, banks and brokers. Its data-driven insurance platform enables its customers to roll out fully customized mobile-first insurance experiences at record speed.

DIG also works with global banks and other companies that want to offer innovative insurance solutions to their customer base. The company is currently working with clients in multiple countries in Europe and Latin America.

Theo Bouts, CEO of Zurich Insurance Mobile Solution (ZIMS) said: We are excited about this collaboration with DIG, a leading insurtech innovator, to support our digital strategy and capabilities and to ensure we shape the future of insurance.

Ingo Weber, CEO and co-founder of DIG said: We are thrilled to support Zurich Insurance on a global scale and to bring new digital solutions to Zurich and its customers in a fast way.

Radboud Vlaar, Partner at Finch Capital said: We are proud to support the incredible team at DIG as they continue to build on their success providing leading digital insurance solutions to their banking, insurance and broker clients in Europe and since 2018 also outside Europe.


Digital Insurance Group (DIG) is a leading insurtech innovator and a next generation technology partner to insurers and banks. Its data-driven insurance platform enables insurers, banks and other companies to offer fully integrated insurance solutions to their customers at record speed. DIG was created in 2017 through the merger of two European insurtechs and is currently active in multiple countries in Europe and Latin America. The company is backed by top US and European VC investors as well as a leading global insurance group.

Zurich Insurance Group (Zurich) is a leading multi-line insurer that serves its customers in global and local markets. With about 53,000 employees, it provides a wide range of property and casualty, and life insurance products and services in more than 210 countries and territories. Zurich’s customers include individuals, small businesses, and mid-sized and large companies, as well as multinational corporations. The Group is headquartered in Zurich, Switzerland, where it was founded in 1872. The holding company, Zurich Insurance Group Ltd (ZURN), is listed on the SIX Swiss Exchange and has a level I American Depositary Receipt (ZURVY) program, which is traded over-the-counter on OTCQX. Further information about Zurich is available at www.zurich.com.

Related Posts:

  • No Related Posts

Speech by SFST at Annual Reception of Hong Kong Federation of Insurers

I am delighted to join you all today at the Annual Reception of the Hong KongFederation of Insurers. The HKFI was founded on August 8, 1988 to promote the interests of the insuring public and advance the growth of the industry. Indeed, as the representative body of insurers in Hong Kong, it is fitting to …

Speech by SFST at Annual Reception of Hong Kong Federation of Insurers

Hong Kong (HKSAR) – Following is the speech by the Secretary for Financial Services and the Treasury, Mr James Lau, at the Annual Reception of the Hong Kong Federation of Insurers (HKFI) today (April 12):

K P (Member of the Legislative Council Mr Chan Kin-por), Moses (Chairman of the Insurance Authority (IA), Dr Moses Cheng), Stuart (Chairman of the HKFI, Mr Stuart Harrison), distinguished guests, ladies and gentlemen,

Good evening.

I am delighted to join you all today at the Annual Reception of the Hong KongFederation of Insurers. The HKFI was founded on August 8, 1988 to promote the interests of the insuring public and advance the growth of the industry. Indeed, as the representative body of insurers in Hong Kong, it is fitting to say that HKFI has been a witness to many changes for the insurance industry over the past 30 years.

In June last year, we saw the formal establishment of the Insurance Authority, and we have next year the imminent introduction of a statutory licensing regime for insurance intermediaries.

These regulatory changes have to be seen in the context of wider developments in the overall landscape for the insurance industry. First, Hong Kong’s demographic changes usher in a rapidly ageing society, which would lead to increased demand for insurance products. The second development concerns the greater Bay Area and the Belt and Road, which we anticipate can bring new business opportunities, especially in reinsurance and captive insurance.

Thirdly, there is the global trend of the development of Fintech, and more specifically, Insurtech. All of these changes bring opportunities and challenges. And the Government stands committed to helping the insurance industry to sail through these challenges.

Here I must digress briefly to refer to President Xi’s speech delivered at the Boao Forum for Asia on April 10, 2018.

This Boao speech referred to a change welcomed by the insurance industry because President Xi reiterated that the commitments made in November 2017 on the progressive opening of China’s financial services to foreign investors within three to five years would be duly implemented. It is actually interesting that he made a specific reference to the insurance industry – that there should be an acceleration in the opening up of the Mainland’s insurance sector.

In fact, just yesterday, Governor Yi Gang of the People’s Bank of China announced at Boao six measures to further open China’s economy, including a raise in the foreign equity cap in life insurance companies to 51 per cent by late June this year, and a full elimination of the cap within three years. So this presents more opportunities for Hong Kong, and the Government and the Insurance Authority will continue to work with our counterparts to seek to enlarge the window for Hong Kong insurers.

Now let me come back to the happenings in Hong Kong.

After taking over the statutory functions of the Office of the Commissioner of Insurance last June, the Insurance Authority is working on a new licensing regime for the regulation of insurance intermediaries. The target is for the regime to come into operation in mid-2019. Here I need to acknowledge the strong support provided by the HKFI and the industry – otherwise, this would be a mission impossible. This regime brings Hong Kong in line with the Insurance Core Principles published by the International Association of Insurance Supervisors and also addresses the concern expressed previously by the International Monetary Fund.

Another development I mentioned at the beginning is our ageing society.

In 2016, about 16 per cent of our population was aged 65 and above. But this will rise to about 29 per cent in 2036. The need for retirement protection has seen a rise in demand for annuities, because they can provide a stable future income stream to the annuitants.

We are working with the HKFI to formulate proposals on tax concession for premiums of deferred annuity products. This will encourage the development of the deferred annuity market as another option under the voluntary third-pillar for retirement protection. We count on HKFI’s professional input from the service providers’ perspective, and we will also join hands to educate the public about annuity products for retirement protection.

For the third development, I look beyond Hong Kong to the greater Bay Area and Belt and Road initiatives, which present new opportunities for our insurance industry.

For the greater Bay Area, with the increased flow of people, capital and investments, this should lead to increased cross-border co-operation among insurers in Guangdong, Hong Kong and Macao, and we will continue to closely liaise with the industry and relevant authorities to promote cross-border opportunities for the local industry.

As for the Belt and Road Initiative, Hong Kong has the potential to emerge as a major risk management centre for large-scale investments and infrastructure projects. Aside from direct insurance and insurance brokerage services to Mainland enterprises, there are opportunities in reinsurance and captive insurance in particular. To further develop Hong Kong as a captive domicile, we are amending the Inland Revenue Ordinance to extend the existing 50 per cent tax concession for profits arising from offshore insurance business of professional reinsurers and captive insurers to their onshore business.

The Government and the IA will strengthen our promotional work and proactively seek the support of relevant Mainland authorities to encourage more Mainland enterprises to set up captive insurers in Hong Kong.

The final development I would flag is the revolutionary impact of technological changes. Financial technology is revolutionising the financial services industry globally, and the insurance industry is no exception. The use of big data analytics can help insurers gain insights of customers’ needs and market demand, while the use of blockchain technology can raise business efficiency and allow insurers to enjoy easy and secure access to timely and accurate data.

In this regard, I am glad to note that HKFI is developing a blockchain e-platform for motor insurance. I encourage the insurance industry to continue to devote more resources to embrace Insurtech.

Of course, the Insurance Authority has also been proactive in promoting the application of Fintech in the insurance industry in Hong Kong. The IA launched an Insurtech Sandbox last September to facilitate a pilot run of innovative Insurtech applications by authorised insurers.

Also in September last year, the IA launched a pilot Fast Track scheme, which aims to expedite applications for new authorisation to carry on insurance business using solely digital distribution channels. In addition to the above, the IA has also signed MOUs with a number of jurisdictions to strengthen international co-operation.

Ladies and gentlemen, I am sure the insurance industry in Hong Kong is gearing up to cope with the changes and seize the new opportunities arising. Looking forward, I have every confidence that the public and private sectors will continue to work hand in hand to safeguard the professionalism and prosperity of our insurance industry, and that HKFI will continue to play an important role in the growth and development of the sector.

Thank you.

Published on: 2018-04-12

Limited copyright is granted for you to use and/or republish any story on this site for any legitimate media purpose as long as you reference 7thSpace and any source mentioned in the story above. Please make sure to read our disclaimer prior to contacting 7thSpace Interactive. To contact our editors, visit our online helpdesk. If you wish submit your own press release, click here.