Hong Kong's insurance sector embraces "open" revolution for customer excellence

Industry leaders like Zurich Insurance and FWD partner with banks and leverage APIs to create seamless customer experiences.

Meet Mr and Mrs Chan, loyal policyholders for over a decade. With a few taps on their phones, they expanded their insurance coverage, bundled home and auto policies for discounts, and even ventured into investments. With a quick message to their agent, they addressed any new needs.

Digitisation has forever changed how consumers behave. The merging of online and real-life activities demands a swift response from insurance companies. Rather than just adding sales channels or automating processes, leading firms prioritise exceptional customer experiences. This calls for collaboration – fast. 

“Open” insurance business models 

The industry is pointing to one prominent business model which is “open”. According to Zurich Insurance (Hong Kong), the insurance sector is driving ecosystem partnerships to future-proof and augment revenue streams. These collaborations involve integrating third-party applications to expand services and provide customers with a wider range of offerings.

“By fostering partnerships, we can tap into new customer bases and create new revenue streams by harnessing the strengths of various ecosystem players,” shared Jim Qin, Chief Executive Officer of General Insurance at Zurich Insurance (Hong Kong).

He elaborated that they had partnered with Citi to launch the market's first digital lifestyle insurance plan through the bank's mobile app. Through this collaboration, their insurance coverage is embedded into the credit card activation process. Instant policy issuance enables immediate access to coverage, whilst customers can conveniently manage payments within the app.

"By partnering with Citi, we have expanded our customer base and delivered innovative products that meet their evolving lifestyle and the digitalisation demands of the modern age,” said Qin.

Visibility is key

Visibility is crucial in the war to seize partnerships, and Jessica Yeung, Senior Manager of the Policy and Development Division at the Insurance Authority (IA) explained active participation and engagement within collaborative ecosystems allow companies to amplify their reach into untapped business opportunities. 

“To identify changing customer needs and provide targeted insurance offerings promptly, increased collaborations are necessary to drive cross-sectoral innovation and capitalise on synergies for value-added services that enhance customer experience,” said Yeung.

Organisations need to establish an open and accessible presence in a bid to foster partnerships, and collectively innovate to create a dynamic and resilient business environment. 

To promote collaboration and innovation, the industry regulator rolled out the Open Application Programming Interface (Open API) Framework and introduced the OpenAPI Platform (also known as the Central Register) in September this year. 

The Framework provides market stakeholders with clear definitions of Open APIs, guiding principles for Open API adoption and technical standards, as well as controls on third-party service providers for the industry to adopt Open APIs in practical operations.

Whilst the OpenAPI Platform, facilitated by Hong Kong Science and Technology Parks Corporation (HKSTP), serves as a trusted collaborative platform. Insurers and insurance intermediaries can present their services as standardised APIs for seamless integration into applications and solutions. By reducing barriers to access data and information, it connects insurers and insurance intermediaries with potential partners and customers. This fosters a dynamic exchange of ideas and promotes cross-industry collaboration.

The significance of a conducive environment for showcasing readiness for partnerships cannot be undermined. “The OpenAPI Platform is comparable to a comfortable rehearsal studio where musicians gather to jam," remarked Yeung, adding that platform plays a key role in fostering alliances and exploring business opportunities all whilst prioritising it is safe, well-managed, and easy to use.

API as glue that binds

FWD Insurance (FWD) is one of the insurers that have published their APIs on the OpenAPI Platform to shape the future of insurance. 

By making their APIs available, FWD has collaborated with China Construction Bank (Asia) (CCB Asia) last year. The collaboration enables CCB Asia to provide the premium payment transaction data to FWD's backend system instantly. In return, CCB Asia can offer their customers a seamless insurance purchasing experience by sharing payment details and policy numbers, which eliminates the need for customers to approach FWD separately. 

“To bank customers, this is instant, secure payment and policy issuance for faster protection, and these new levels of convenience for customers mean a lot to FWD as we’ve been committed to changing the way people feel about insurance,” said Elly Kwong, Chief Technology Officer of FWD Hong Kong. 

Beyond APIs lies a world of possibilities. Kwong highlighted that API serves as a powerful technology tool that fosters collaborations within the insurance industry and beyond. By leveraging APIs, businesses can unlock mutual benefits for their partners, leading to limitless possibilities for innovation and growth. 

“The potential applications are vast,” elaborated Kwong. "Insurers can now seek to collect premium payments directly from customers' bank accounts whilst exploring collaborations with medical institutes to enhance the overall insurance purchases and claims processes in a data collaboration ecosystem.” 

Open Finance on the rise 

The Insurance Authority is eager to see the insurance industry leverage the OpenAPI Platform, which offers increased visibility for collaboration opportunities. This, in turn, can spur the creation of innovative products and services, delivering greater value to customers and fueling growth across the financial sector.

To support corporations in this endeavour, the regulator has partnered with HKSTP to organise workshops and events relating to API development and utilisation.

In Hong Kong, HKSTP stands as the largest innovation ecosystem and drives business transformation through data and technology. Their newly launched API Hub serves as a reliable source for readily available data and functional APIs, promoting cross-disciplinary collaboration and innovation. Moreover, their dedicated OpenAPI Platform for Banking, with partnerships from 27 banks, offers access to over 1,200 Open Banking APIs. 

Crystal Fok, Head of STP Platform at HKSTP, said, "Open APIs are the gateway to embracing Open Finance. By leveraging the power of open data sharing, we can unlock new opportunities and business value arising from collaboration and innovation, delivering impactful financial experiences for the industry."