Banking & Finance

Hong Kong’s first pure digital insurance venture, Tencent-backed Blue, to start selling policies

Enoch Yiu UPDATED :

Hong Kong’s first purely digital life insurance company will start selling policies in the city from Wednesday, looking to use its direct selling capability to offer lower prices in the crowded local market.

Blue, 20 per cent owned by Chinese internet giant Tencent and 40 per cent by British insurer Aviva, will offer a life and a critical illness policy the internet, its chief executive said in an interview.

“By turning from a traditional insurance company into a digital insurance company, we do not need to pay any commission to middlemen. We can thus charge policies at a lower price and we will transfer the benefit to customers,” said Charles Hung Tak-chow.

The Hong Kong government is keen to promote so-called insurtech in the city. Last September the regulator, the Insurance Authority, announced a range of measures to allow insurance companies to use new technology to sell products or process claims to cut down costs and enhance service.

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Several of the city’s big players, including AIA, MetLife and Manulife, have introduced new technology such as big data to analyse risk and determine premiums, as well as for dealing with claims. The insurance sector employs nearly 90,000 people in Hong Kong, and companies have traditionally used agents, brokers and banks to sell their products.

Blue came into being in February when the regulator approved a deal to allow Aviva to add in two shareholders: Tencent with 20 per cent and investment company Hillhouse with 40 per cent, leaving Aviva with the remaining 40 per cent.

Hung declined to give details on how much money could be saved from cutting out banking partners and brokers. Other insurance brokers have previously said that in general, commission paid to sales staff or banking partners is equal to about 70 per cent of the first year premium and about 20 to 30 per cent of premiums in the following few years.

“There are a lot of customers who are very tech savvy nowadays who want to buy insurance policies and make claims by their mobile phone or their computer. They are our target clients,” Hung said.

“Aviva has an insurance background, Tencent has internet knowledge and Hillhouse can support capital needs. All three major shareholders have their contributions to Blue,” he said.

Insurance companies in Asia set to leverage big data in push for smarter, cheaper products

Hung said Blue will only employ over 100 people. The online platform will make it easy to buy simple life and medical policies, with customers only needing to answer a few simple questions about their health and personal information, he said.

“They no longer need to rely on an agent to sell the policies to them. Rather, they can have full control and buy products to meet their needs,” he said.

HK | International
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