Adoption of Virtual Banks and Insurers

Adoption of Virtual Banks and Insurers 20 Overview of Virtual Banks and Insurers Virtual insurers From December 2018 to May 2020, IA has issued four new licenses to virtual insurers (see Exhibit 2). Bowtie was the first to receive the license, and launched its operations in April 2019. Up until June 2020, it was the only virtual insurer to launch a large-scale marketing campaign. In October 2019, Avo received its license and started to operate at the same time. This survey was conducted from May to July 2020, shortly after OneDegree and ZA Insure received their licenses in April and May 2020, respectively. As a result, the survey questions of this study have only included the two virtual insurers that started operations in 2019, namely Bowtie and Avo. Virtual insurers need a license from IA to operate. There are two types of insurtech licenses issued by IA. The life insurance license holder provides life and health related insurance products, such as Bowtie and ZA Insure. General insurance licensees, Avo and OneDegree, carry health, travel, car, and other insurance products. To follow the requirements of IA, new products must go through an approval process before launching. As with virtual banks, insurtech companies are required to have a registered physical office for operations, but no customer service office is required. Virtual insurers offer products to customers directly without the help of insurance agents or brokers. Customers can call their hotline for questions about insurance plans, policies, claims, or other services. Users of their end-to-end platforms can receive immediate insurance quotations, submit applications online, and have the option to upload documents for claims. To face the competition brought by these new entries, some traditional insurers have developed/improved their own digital platforms, which are now similar to those of virtual insurers. An example of this type of digital insurer is Blue Insurance Limited (Blue by Aviva), a joint venture between Aviva, Hillhouse Capital, and Tencent Holdings Limited. 5 5 Blue by Aviva, https://www.blue.com.hk/online/publish/en/about/about.html