, Hong Kong
Fred Ngan, CEO and co-founder pf virtual insurance Bowtie.

Virtual insurer Bowtie cuts down product prices by half

This is done by cutting out insurance agents from the onboarding process.

For Fred Ngan and Michael Chan, virtual insurer Bowtie’s co-founders and co-CEOs, Hong Kong’s insurance industry is outdated and expensive, apart from it being faced with a huge protection gap.

“With so many insurance companies in Hong Kong, it’s surprising that we are still facing a $6.9t protection gap. This means every working adult is facing a $1.9m protection gap,” Fred said.

Their solution to this pain point is to shorten the onboarding process and reduce its cost by removing from the equation intermediaries such as insurance agents. The processes of explaining to customers in detail the policies and benefits, applying their insurance for them, and assisting them with their claims usually take several days or even a week.

Agent-free platform

The company boasts that they do not need boots on the ground to do the selling of their products.

“It is a self-serve platform where [customers] can access all the products and pricing information. They get to be in control and design which product they want based on their own needs and research,” Fred said.

“The products that we offer have a very high value for money. Most of the products that we sell have the lowest premium in the markets. For example some of our medical products or term-life products we can save you 30%. Sometimes up to 50% compared to other products that are sold by an agent,” Fred explained.

This is because as an agent-free platform, they save on paying commissions to agents.

Fred believes they can do away with agents because Bowtie is very adamant about its transparency. The younger consumers, which is most of their client base, want to fully understand the terms of their policies before buying insurance.

“We’re very transparent with premiums. Customers can access all the information they need for their purchase decisions which is a very important element to building trust,” Fred explained.

Transparency, lowering premium pricing, and leveraging the digital boom are just some of the ways Bowtie has done to change the game in the insurance industry.

“Our process is automated. It is a lot more effective and efficient when we use technology to engage customers online,” Fred said.

Bowtie also uses modern ways to compensate for the lack of insurance agents when it comes to introducing their products to consumers. Fred said this is part of their way of building relationships with consumers.

“We have a blog that has almost two million organic traffic every month. We publish articles that teach consumers. For example, we have articles that explain what health insurance is, how it works, and how to file claims. This is how we engage customers. This is how they get to know the brand and eventually come to our website and purchase a product,” Fred said.

Preventive care

According to Fred, most of Bowtie’s products centre on preventive care as their main goal is to keep customers healthy.

Bowtie’s insurance products come with free medical check-ups. They also have their own clinic near their offices as well as doctors and dieticians that policyholders can engage with.

An example of how Bowtie helps customers focus on preventive care is the 12-week health challenge it did with WeLab. Bowtie sent optometrists, nutritionists, Chinese medicine practitioners, and meditation coaches to the WeLab office as part of Bowtie’s consulting services, alongside a 24/7 online dietitian consultation system available to participants for well-being recommendations.

Bowtie enacted some preventive care sessions where WeLab employees were thought to be cautious about lighting and posture whilst working as well as knowing the importance of the right design for computer desks and chairs and the importance of regular eye checkups.

These types of engagement programs are important for their customers, according to Fred, as the majority of their clients are young professionals. Additionally, SMEs, those who have less than 20 people on staff are keener on buying group insurance online as it is a lot easier for them. Fred said this year alone they saw many startups switch from other insurers to Bowtie.

Currently, Bowtie has provided over US$5b of insured value to 60,000 customers.

SEA expansion

In its last funding round in 2021, Bowtie raised US$22.6m in a series B funding round. 

The round was by Mitsui & Co., Ltd, with participation from existing investor Sun Life Hong Kong Limited. Fred said they are planning another funding to raise more capital but did not mention when it would be.

Right now Fred said they would focus on going beyond Hong Kong and entering other markets in Southeast Asia. Bowtie is eyeing Vietnam as one of the markets it identified that has much potential. Fred added that they are in the midst of doing research in some SEA markets.

“The fact that the business model worked in Hong Kong, we think we can replicate it. We have been launching some content marketing in different markets as a way to understand the customer demands in these markets,” Fred explained. They plan on working with Sun Life and Mitsui when they begin their expansion.

Fred said that with more and more accepting online insurance, he does not see this trend slowing down.

“By buying online, consumers will save money and save time. Right now, in surveys, online adoption is just a few per cent. However, if you look at a lot of surveys, especially for the younger generation, at least 50% of them will consider buying online for a simple insurance product,” Fred said.

With how Bowtie’s business model works, we may see more agent-free insurance firms popping up.

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