The Rise of Virtual Insurance in Hong Kong


Virtual Insurance, also known as “Internet insurance,” is a branch of the rising industry Insurtech, a crossover between insurance and technology. Virtual insurance specifies companies or products that operate without the need of a physical branch – the entire experience starting from application, getting insured, and claiming coverage, can be done via an online system. Virtual insurance has been around as early as 2013 in countries such as the US and Germany but is still considered a new field of insurance in Hong Kong that has yet to be widely exposed to the public.

The insurance industry in Hong Kong is expanding at an unprecedented pace. In 2017, the total gross premiums of the Hong Kong insurance industry had increased by 8.3% to $489.2 billion[1], and Hong Kong residents has the highest insurance premiums-per-capita (17% by GDP percentage). Driven by income growth and broader old age provisions, InsuranceAsia sees an 8.2% growth per year in the Hong Kong insurance market for the next 10 years[2], providing lucrative opportunities for insurance companies. Among the players include multiple virtual insurance companies that are authorized to provide online products by the Hong Kong Insurance Authority (HKIA).

Bowtie Insurance is the first company to acquire a virtual insurance license in Hong Kong. HKIA gave the nod in December 2018, taking a big step in embracing the era of Insurtech in Hong Kong. Bowtie currently offers medical plans under the Voluntary Health Insurance Scheme (VHIS) by the Hong Kong government, claiming to offer some of the best rates in Hong Kong.

Bringing the whole insurance experience online is beneficial for both the company and the customer. Unlike traditional insurance companies that overwhelm customers with various products and numbers, Bowtie’s website is simple and extremely user-friendly. Rates are available on the website and dynamically priced by taking 3 metrics from the user: gender, age, and smoking habits.  

The application process requires customers to fill in personal information, medical history, and HKID for verification. Customers can be can finish the form and get insured in under 10 minutes, compared to weeks of waiting time with traditional insurance companies. Coverage claims are also processed online, simply file an application online and a coordinator will follow up and guide policy holders through the process. Payments will be transferred into the designated bank account within 3 days once alld the required documents are uploaded.

The founder and CEO of Bowtie, Fred Ngan believes that this simplified process and digital approach will attract younger consumers to purchase insurance under the VIHS. “We do not plan to compete with traditional insurers,” said Ngan. “We want to target a younger generation of customers who are tech savvy and like to do everything by themselves.”

The digital platform allows company agents to handle multiple application cases at the same time. Files and data are stored digitally, which saves up tremendous time and manual work compared to paper-based traditional insurance providers. Bowtie has a small team of less than 50 employees for technology development and customer services.[3] By eliminating unnecessary middlemen such as agents or banks, Bowtie is able to effectively cut down personnel costs and promise its consumers zero-commission fees for all of its products.

Some people might worry about the legitimacy or safety of these virtual insurance companies. But Clement Cheung, CEO of the HKIA assured that “virtual insurers still have to follow the same high-capital and conduct requirements as traditional insurance companies.”[4] To further protect the  interests of policy holders, HKIA listed out principles for virtual banks, including conditions and restrictions on products that are offered. Currently, online insurance providers are restricted to more simple services while sophisticated products remain only available in major insurance companies as they believe that not all insurance products are suitable to be sold online.

Following Bowtie, 3 other companies have also received the virtual insurance license in March 2019, namely the Chinese company ZhongAn Insurance, local startup OneDegree Global, and traditional insurance player Asia Insurance Company. This rising trend implies the digitalization of the insurance industry and manifests the growing interest in the Insurtech industry. Aside from virtual insurance companies, there are also startups like imSure and gobear democratizing the insurance industry and make information accessible. Another company, GenLife is using AI and Machine Learning to intelligently price risks for personalized insurance products.

Despite these developments, the Insurtech industry in Hong Kong is still in its primary stages compared to other developed markets like London or San Francisco, where more complicated fintech products are introduced to optimize insurance processes. Examples include using blockchain to speed up the underwriting process and to prevent fraud, and AI to calculate real-time risks based on multiple parameters. With the growth of Fintech and support for innovation from the HKIA, the outlook of Insurtech in Hong Kong is optimistic and will hopefully bring more benefits for end-customers in the near future. 




虚拟保险,也被称为「互联网保险」,是新兴行业Insurtech作为保险和科技融合而形成的一个分支。 虚拟保险确保公司或产品在不需要实体分支的情况下让整个过程由申请到获保到索取赔偿可以在在线完成。早在2013年,虚拟保险已经在美国和德国等国家一直存在。即使如此,虚拟保险在香港仍被认为是尚未被公众广泛接触的新保险领域。

香港的保险业现时以前所未有的速度不断扩张。在 2017年,香港保险业的保费总额达4,892亿美元,上升8.3%1。而香港居民的人均保费为最高水平,占国内生产总值的17%。在收入增长和更广泛的长者市场规定的推动下,InsuranceAsia预计未来10年香港保险市场将每年有8.2%增长2,为保险公司提供获利的机会,其中包括多家受香港保险业监管局授权提供在线产品的虚拟保险公司。

保泰人寿是第一家在香港获得虚拟保险许可证的公司。香港保险业监管局于二零一八年十二月批出虚拟保险许可证,让香港向Insurtech时代迈出一大步。在香港政府的自愿医疗保险计划下,保泰提供相应的医疗计划,并为市民提供一些最优惠的价格。将整个保险流程变成在线进行,不论对公司还是客户,都有好处。 与传统保险公司不同的是,保泰的网站既简单,又方便使用。网站上提供的价格通过从用户获取的3个指标来定价,分别是性别、年龄和吸烟习惯。申请程序要求客户填写个人信息、病历和身份证号码以作验证。和传统保险公司的等待时间相比,客户只需10分钟去完成表格并获得保险,而索偿也会在线处理。客户只需在网上提交申请,客户服务人员就会跟进和指导保单持有人完成整个索偿过程。款项会在上传所需文件后3天内转入指定的银行账户。保泰的创始人兼行政总裁颜耀辉认为,这种简化的流程和数字化将吸引年轻消费者购买自愿医疗保险计划的保险。 他表示它们并不打算与传统保险公司竞争,而是希望能够吸纳那些精通科技又喜欢自己完成所有事情的年轻客户。

数字平台让公司能够同时处理多个申请。和以纸张储存数据的传统保险公司相比,数字平台以数字形式储存文件和数据,大大节省了时间和人手操作。 保泰拥有一支小团队专门负责技术开发和客户服务。通过消除代理商或银行等不必要的中间人,保泰能够有效降低人力资源成本,并向消费者承诺所有产品的零佣金。


继保泰之后,中国内地公司中安保险、本地创业公司OneDegree Global和传统保险公司亚洲保险公司3家公司也在2019年3月获得虚拟保险许可证,意味着保险业有数字化的上升趋势,并展现了对Insurtech日益渐长的兴趣。除了虚拟保险公司之外,imSure和gobear等初创公司将保险业民主化,令信息更易于获取。而GenLife也正在使用人工智能和机器学习来为个人化保险产品定价。





虛擬保險,也被稱為「互聯網保險」,是新興行業Insurtech作為保險和科技融合而形成的一個分支。 虛擬保險確保公司或產品在不需要實體分支的情況下讓整個過程由申請到獲保到索取賠償可以在線上完成。早在2013年,虛擬保險已經在美國和德國等國家一直存在。即使如此,虛擬保險在香港仍被認為是尚未被公眾廣泛接觸的新保險領域。

香港的保險業現時以前所未有的速度不斷擴張。在 2017年,香港保險業的保費總額達4,892億美元,上升8.3%1。而香港居民的人均保費為最高水平,佔國內生產總值的17%。在收入增長和更廣泛的長者市場規定的推動下,InsuranceAsia預計未來10年香港保險市場將每年有8.2%增長2,為保險公司提供獲利的機會,其中包括多家受香港保險業監管局授權提供在線產品的虛擬保險公司。


與傳統保險公司不同的是,保泰的網站既簡單,又方便使用。網站上提供的價格通過從用戶獲取的3個指標來定價,分別是性別、年齡和吸煙習慣。申請程序要求客戶填寫個人信息、病歷和身份證號碼以作驗證。和傳統保險公司的等待時間相比,客戶只需10分鐘去完成表格並獲得保險,而索償也會在線處理。客戶只需在網上提交申請,客戶服務人員就會跟進和指導保單持有人完成整個索償過程。款項會在上傳所需文件後3天內轉入指定的銀行賬戶。保泰的創始人兼行政總裁顏耀輝認為,這種簡化的流程和數字化將吸引年輕消費者購買自願醫療保險計劃的保險。 他表示它們並不打算與傳統保險公司競爭,而是希望能夠吸納那些精通科技又喜歡自己完成所有事情的年輕客戶。

數字平台讓公司能夠同時處理多個申請。和以紙張儲存資料的傳統保險公司相比,數字平台以數字形式儲存文件和數據,大大節省了時間和人手操作。 保泰擁有一支小團隊專門負責技術開發和客戶服務。通過消除代理商或銀行等不必要的中間人,保泰能夠有效降低人力資源成本,並向消費者承諾所有產品的零佣金。


繼保泰之後,中國內地公司中安保險、本地創業公司OneDegree Global和傳統保險公司亞洲保險公司3家公司也在2019年3月獲得虛擬保險許可證,意味著保險業有數字化的上升趨勢,並展現了對Insurtech日益漸長的興趣。除了虛擬保險公司之外,imSure和gobear等初創公司將保險業民主化,令信息更易於獲取。而GenLife也正在使用人工智能和機器學習來為個人化保險產品定價。



Virtual Banking——The Combination of Traditional Banking and Internet


Back in early May 2019, the Hong Kong Monetary Authority (HKMA) has issued all eight virtual banking licenses which means that the revolution in Hong Kong banking industry has officially begun. As the world-renowned financial center, Hong Kong has a thriving banking industry and meanwhile in a city of only 7 million people, it has attracted over 160 traditional licensed backs, with an average of 21.43 bank branches per 100,000 people which is way higher than the global average of 12.6[1]. In light of the fierce competition within the industry, questions arise concerning where will virtual banking be heading towards?

The uniqueness of virtual banking

A virtual bank is defined as a bank without a physical branch in which all services or transactions such as loans, deposits etc. are conducted online. In fact, the trend of electronic banking services has existed for a long time and major banks have already launched their own mobile phone applications to advance their services. However, the reason why virtual banking is at a highly-advantageous position is not about its focus on pure electronic; but to further enhance banks’ operational efficiency by applying new financial technology (FinTech). For instance, loan procedures are often very complicated for traditional banks. Instead of using traditional credit rating, virtual banks will use technologies like the big data to quickly assess the credit rating of customers and the process is much faster and comprehensive.

The impact of virtual banking on financial markets

Since major internet companies had begun to actively expand their FinTech businesses, it rendered the status of traditional banking untenable by launching various upgrade programs to embrace the internet, including the launch of virtual banks. Hong Kong as a financial and international center, influenced by the development of FinTech in the mainland, the introduction of virtual banking will undoubtedly bring revolutionary impacts into the local banking industry. Meanwhile internet and smartphones technologies which also play major parts in advancing financial payment are gaining popularity, the core nature of the bank has not changed. Yet the payment patterns and tools have been different: from the traditional paper-and-coin trading to the use of computer and mobile phone network. These new transaction methods can complete actions such as fund transfer and financial flows within a short period of time. Therefore, where traditional banks are no longer capable of fulfilling customers’ ever-growing demand for efficiency, virtual banks come right on the spot by providing round-the-clock services and meeting customers’ individual needs, thereby changing the current landscape of Hong Kong banking industry.

Potential problems of virtual banking

Although virtual banking can bring transformation and a new way of thinking into the traditional banking industry, small and medium-sized banks may not be able to withstand such a huge impact, thereby posing immediate threats to their operations. To ensure that traditional banks can still retain customers after virtual banks come into the market, they must update their technology products from time to time. Because small and medium-sized banks usually lack the funds and fast response to cope with the challenges, they will inevitably be phased out sooner or later.

On the other hand, as the development of virtual banking demands astronomical research costs, major banks are not willing to pioneer for the development because of the great risk that comes with it, let alone other small and medium-sized banks. As a result, the immensely high threshold of applying virtual banking is also one important factor that will hinder its development. Therefore, it may not be feasible to apply virtual banking widely in various areas in the short term, and the immaturity of relevant technology will eventually blow customers’ confidence.

Besides, as virtual banks do not have physical branches, customers’ confidence will solely depend on their trust towards the bank. In addition to the worry of cybersecurity, the short-term launch of the plan may deter most customers. For the older generation, the fear of electronic will also render them reluctant to accept virtual banking that may cause inconvenience. Therefore, physical banks are still irreplaceable and it will take some time for virtual banks to be accepted by the general public.

The security of electronic finance is still questionable. Although the launch of virtual banking can offer more choices for us to manage our assets, if personal data is not adequately protected, it may intensify the problem of data leakage which encourage illegal activities and financial crimes and finding the way to solve this problem is not something that could be done within a short period of time. As long as the problem remains unsolved, it may deter banks from developing new technologies and consequently, hinder the development of FinTech as a whole.