Insurers ‘on track’ to boost insurtech industry in Hong Kong
The industry is also supported by initiatives, such as Fast Track for licensing.
Hong Kong insurers are well on their way to further develop their insurtech capabilities with support from the Insurance Authority (IA) and the financial sector, FWD Hong Kong said.
FWD Hong Kong Chief Technology and Operations Officer Samuel Cheung said that as insurers are exploring different digital distribution channels, the IA has introduced initiatives such as Fast Track to help the sector.
Fast Track provides a dedicated queue for start-ups engaged in digital insurance to ease processes in getting a business license.
“Measures of such kind would help the industry to continuously develop and thrive with more capable players brought in for a healthy competition to innovate and to create a favourable insurance environment in Hong Kong,” Cheung said.
On top of this, Cheung also noted the financial sector had been instrumental in developing the insurtech industry through measures, such as the Faster Payment System (FPS) that allows insurance customers to settle premiums through cross-bank or an e-wallet payment.
“These types of infrastructures encourage insurers to deliver more innovative customer experiences and digitalised offerings,” Cheung said.
For their part, FWD has launched an instant claims service on the FWD Moments mobile application that allows claim applications submitted through the app to be processed instantly by an artificial intelligence assessment engine.
Through this, customers can receive a claim reimbursement as fast as within seconds through their selected means, such as instantly via FPS or direct bank transfer.
The insurtech industry, whilst propelled by the digital transformation that accelerated over the past years, had its share of challenges.
Traditional insurers were forced to pivot their business models and service offerings to meet the digital demand as well as transform their agents’ roles to ensure a more seamless interaction.
FWD has enhanced and expanded its digital insurance platforms to strengthen its omnichannel distribution capabilities, but Cheung pointed out there is still a need to catch up on the digitalisation of insurers’ infrastructure.
“Traditionally, most insurers used a data warehouse as their data management system to support business intelligence activities and analyse customer behaviour,” he shared.
“However, one of the pain points with this process is that data within the warehouse is often derived from a wide range of sources and contains large amounts of historical data, making it a less productive and cost-effective option.”
In the case of FWD, the insurance company intensified its data lake to provide a more centralised repository and allow it to store all structured and unstructured data at any scale.
Cheung added the system also inputs data in the simplest way for departments to share the database, integrate and analyse market data.
Cybersecurity is another concern for insurers, which according to IBM data cost companies an average of US$4.24m per incident of a data breach. This called for insurers to modernise their security system, as well as provide security training to their employees.
FWD Hong Kong is looking at continuing its adoption of the latest technology, such as AI, Hong Kong-specific natural language processing, and biometric-based authentication amongst others.
It will also explore opportunities it can capture from the Greater Bay Area development as well as the increasing demand for accident and health insurance in the city.
“We are committed to developing our insurtech capabilities to enhance and augment our business efficiency,” Cheung said.
“FWD will look to capitalise on these opportunities in the near future to deliver innovative insurance solutions for this space.”