HK's Bowtie to tap market for low-cost insurance products

Bowtie Life Insurance has been granted a license to offer insurance protection directly to customers (Image MicroStockHub / iStockPhoto)

Bowtie Life Insurance Company Limited announced it has become the first company to be granted a virtual insurance license by Hong Kong's Insurance Authority under its Fast Track pilot scheme.

The licensure will allow Bowtie to offer insurance protection directly to customers, without any insurance intermediaries.

“While digital technology is on the rise, we believe the industry is in need of change," said Fred Ngan, co-CEO and co-founder of Bowtie. "Hong Kong welcomes a virtual insurer to design what online insurance can be -- truly customer-centric, transparent and commission-free."

Not to be confused with another Insurtech company also selling insurance online but in the US market – Bow Tie Financial Group, Bowtie co-CEO and co-founder, Michael Chan says their business is “all about delivering convenience to consumers through technology”.

"Our market research is telling us Hong Kong consumers would love to be able to sign up for health insurance and submit claims online, but the industry has not fully embraced digital technology to optimize the consumer experience. This is exciting because we get to reinvent the very structure of an insurance company and replace everything with modern technology," Chan adds.

For Bowtie this means no agents or channels other than online as a way to buy insurance products from the startup. According to its press release, the team is 100% based in Hong Kong and comprises actuaries, engineers, designers, a strong service team and even a medical doctor.

However, to date there are no indications of what products the company is offering, only an indication on its press release of what that may be:

“Pending Food and Health Bureau's approval, Hong Kong consumers can expect to see health insurance products on Bowtie's digital distribution platform during the first half of 2019 when the Voluntary Health Insurance Scheme (VHIS) begins accepting customer applications.”

In an interview with SCMP, Ngan is quoted as indicating the company will focus on the simple life and medical insurance products – “which don’t need much explanation and which enable the customers to buy and make claims all by themselves via their smartphones or computers.”

The company aims to sell low-cost insurance products that traditional insurers and their agents would not be interested in because of thin profit margins.

The opportunity for Bowtie and others like it remains positive. The Pacific Prime report “State of Health Insurance in Hong Kong 2017-2018” says insurers are now increasing the benefits and limits offered through local plans potentially greater inpatient or outpatient benefits, expanded wellness coverage (including vaccinations), and higher limits, making plans more effective for consumers. The report also observed a rising trend of more modular plans and a focus on containment.

First published in FinTech Innovation

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