Adoption of Virtual Banks and Insurers

Adoption of Virtual Banks and Insurers 54 Survey Findings Trust towards virtual and traditional insurers Similar to traditional banks, the majority of traditional insurers operating in Hong Kong have long histories and established reputations. There is also a large community of insurance agents and brokers working in the industry. Many have developed long- term relationships with customers. In contrast, customers of newly established virtual insurers have only a limited client base at this stage of development. As members of a regulated industry, virtual insurers abide by the regulations of the Insurance Authority. However, the public may not be aware of this and might be doubtful as to whether a potential default by a virtual insurer could be compensated by its reassurance company or by other means. Currently, virtual insurers offer general insurance products, term life insurance, and medical insurance plans without savings or investing components. Respondents were asked whether they trust virtual insurers as if they were traditional insurers. The results show that more respondents totally disagree or disagree (55.1%) than agree or totally agree (13.6%), with 31.2% being indifferent. Virtual insurers need to build a higher degree of trust to increase customer willingness to purchase their products. Exhibit 26 Trust towards virtual and traditional insurers [1 - Totally Disagree ...... 5 - Totally Agree]