Hong Kong's digital insurance falling behind global peers

The study assigned each insurance company a score out of 100, based on the performance of its digital platform, including the availability of information, quoted prices, sales claims, and overall user experience.

Hong Kong ranked fifth with an average score of 51.1, trailing behind the Netherlands (62.4), the US (61.1), Ireland (61.3), and Singapore (51.5). The rest of the ranking placed Belgium (49) at sixth place and France (48.2) at seventh place.

While Hong Kong received high marks for its user-friendly digital platforms and providing customers with easy access to information through smartphone apps and websites, it was found to lag in online advisory, quoting prices, and handling sales and claims.

Arthur Roiret, a senior manager with Sia Partners Hong Kong, told the South China Morning Post these results reflect the prevalence of the intermediary-led distribution model in Hong Kong.

“The Hong Kong market is mainly focused on a life insurance business line with an intermediary-focused business model and customers’ willingness to have a human adviser,” he said.

The Sia report also found an “inverse relationship” between a market’s digital capabilities in client acquisition and its reliance on intermediaries, with markets that have a more direct approach to insurance, such the Netherlands and the US, receiving higher scores in terms of digital maturity compared with more intermediary-led markets like Hong Kong, Belgium and France.

Some Hong Kong insurers still require customers to contact advisers for simple products, even when most companies provide information online, said Sia Partners manager Yousuf Muhammad.

“When getting a quote in few of the Western countries, the customer is often presented with a range of options, as several different insurance providers have a large presence in the online space,” Muhammad told the South China Morning Post. “Online brokers in these countries allow customers to compare prices and coverage between different providers and make a more informed decision.”

One exception to this is Bowtie, which exclusively sells products online without agents. The virtual insurer ranked second in the world with 79 points, after the Netherlands’ Unive with 80 points.

Other Hong Kong insurers featured in the Sia Partners study include AXA, HSBC Life, FWD, AIA, Blue, Prudential, Blue Cross, Manulife, Liberty International, Generali, and BOC Life.

Since 2019, Hong Kong’s insurance industry has seen the introduction of four digital players under a new licensing regime. Some of these digital-focused companies have reportedly received up to 70% of first-year premiums on policies, as a result of not having to share commissions with agents.

According to data from Quinlan & Associates, the 164 insurance companies in the city paid a lump sum of HK$ 61 billion in commissions to agents or brokers in 2021.