Insurtech Talent Development in Hong Kong – From Insurance to Insurtech: Strategies for Building a Sustainable Talent Pipeline

14 From Insurance to Insurtech: Strategies for Building a Sustainable Talent Pipeline Challenges to Insurtech Innovation Despite all the aforementioned policies and measures for encouraging insurtech, Hong Kong is still considered a nascent player in this area when compared with other established insurtech centers of the world, such as New York.29 There are several challenges to insurtech innovation in Hong Kong. First, there is the complexity of the regulatory regime and the different types of licenses and/or authorizations required by the regulators. Second, the exorbitant costs of innovation and development may act as a deterrent for companies to make technological advancements. Third, due to sophisticated cybercrimes, there is a need for robust cybersecurity policies and systems to maintain customer confidence and trust regarding digital models. In this regard, the IA issued the Guideline on Cybersecurity, which took effect from January 1 st , 2020. These guidelines set a minimum standard for the cybersecurity systems of the authorized insurers and cover areas such as formulation of strategy, governance, risk assessment and response plan.30 With all the challenges, there is a strong realization among stakeholders that insurtech can be leveraged to increase the insurance penetration rates in Hong Kong so that underserved market segments such as younger clients can also be insured. Consequently, customers from diverse ages and social strata could be protected through insurance, which would in turn increase insurance coverage in Hong Kong and close the protection gap. During the Covid-19 pandemic, insurtech applications increased in Hong Kong due to the implementation of strict social distancing measures by the government. These applications facilitated 24/7 interactions with the clients and increased coverage among the less served sectors, thus reducing gaps in insurance protection. The insurance industry inHong Kong has thus continued to be adaptive to client needs in changing social and environmental circumstances. However, to maintain both stability and growth, legacy insurance companies will need to develop and/or collaborate on new technologies that will bring the industry increased efficiency and better serve customer needs. To do this, sufficient staff with specific technical and soft skills are required. 29 Baker McKenzie (2022). Guide to Insurtech Innovation and Utilization . https://resourcehub.bakermckenzie.com/en/ resources/asia-pacific-insurance/asia-pacific/hong-kong/topics/guide-to-insurtech-innovation-and-utilization 30 Insurance Authority (2022, September). Insurance Digital Onboarding . https://www.ia.org.hk/en/digital_onboarding/ promotion_of_insurtech_development.html