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Hong Kong is looking to award the licence for its first online-only insurer under a fast-track system, amid criticism that the insurance sector is slower in adopting new technologies than other financial industries.
The online platform, which is yet to be revealed, will take part in a market worth over US$63 billion in premiums, and will compete with insurance heavyweights such as AIA, Prudential, and Sun Life, a report by Reuters said.
Hong Kong is looking to integrate more financial technology (fintech) into its industries, in order to compete with fellow global financial hubs such as Singapore and London.
According to Clement Cheung, CEO of Hong Kong’s Insurance Authority (IA), the regulator is planning to issue its first licence as a result of its fast-track system, which seeks to allow insurers operating solely online to obtain their licences with shorter waiting times.
“It has taken a bit of time, and sometimes people say ‘your fast track is not so fast’ but I wanted to look at the potential disruption to the market,” said Cheung, who assumed office in August.
Most insurance products in Hong Kong are mainly sold through banks, agents, and brokers.
A report by business consultancy EY showed that over 80% of customers are open to purchasing insurance through digital channels, instead of doing business through intermediaries.
Aside from the licencing fast track, the IA is working to establish a policyholders’ capital protection fund and implement a risk-based capital regime for insurers, in line with global standards. These two measures aim to protect customers’ interests in case of a severe downturn of the insurance sector.
“These two initiatives are on the top of our agenda,” Cheung said. “This is a clear roadmap, and we are committed to it.”
