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Enoch Yiu

Former Financial Secretary and Chief Executive hopeful John Tsang Chun-wah has joined Hong Kong’s first virtual insurer, Bowtie Life Insurance, as a senior adviser.
Analysts said the appointment of a well-known figure like Tsang could give the digital start-up a secret weapon as it battles for market share with big, established insurance companies.
Speaking to the South China Morning Post after his appointment, Tsang declined to disclose how much he would be paid for the new role. He said he would be giving Bowtie advice on business strategies.
“We don’t aim to compete with traditional insurance companies. We have different roles to play. We aim to serve the Hong Kong community, bringing them better protection and security,” Tsang said.
Forgot your password? Former finance chief Tsang may have the answer
Tsang, who will turn 68 this month, said he opted to join Bowtie because it is a “young, passionate and professional outfit” and consistent with his beliefs that adopting digital technology is sure to bring benefits to financial services and society.
“As technology continues to rise, I believe the insurance market needs a new force like Bowtie to bring basic medical protection to every Hong Kong citizen,” he said.

After losing out in the Chief Executive election race to Carrie Lam Cheng Yuet-ngor, Tsang turned his focus to financial technology. Last year he was appointed as vice-chairman of Ion Pacific, a fintech-focused merchant and investment bank. He has also invested in a Hong Kong-based developer of apps for authentication technology for online transactions.
Bowtie was one of 25 insurance companies approved by the government to offer the highly competitive Voluntary Health Insurance Scheme (VHIS), which came into effect on Monday. The scheme, a first for the Hong Kong government, offers tax incentives of HK$8,000 per person per year to buy health insurance policies to cover up to HK$420,000 in medical costs annually up to the age of 100.
“The appointment of a well-known person like Mr John Tsang will attract people to visit the online platform of Bowtie, but it may not mean they will definitely buy the products,” said Glenn Turner, chief operations officer of independent financial planning company Altruist Financial Group.
“The traditional insurance companies have 60,000 life-licensed salespeople who will compete with the digital platform insurance companies, plus 10.5 million policies already sold in the market means it is quite saturated.
“The new platform can compete if the cheaper price is the dominant factor in a buyer’s decision making.”
Meet Bowtie, Hong Kong’s first approved online-only insurer
Bowtie won the first virtual insurance licence from the Insurance Authority in December. Under the licence, it has to operate purely online and cannot sell through any agents or banks.
It needs to compete with a multitude of traditional big players such as AIA, AXA, Manulife, Prudential, BOC Life and Cigna, which have all vowed to use their thousands of agents and bank networks to sell the VHIS. The government expects 1.5 million people to buy into it in the next three years, with annual premiums expected to reach HK$10 billion.
Bowtie co-founder and co-chief executive Fred Ngan said his company can compete on technology and low prices.
“We will provide the VHIS standard product via desktop and mobile phone. We target tech-savvy customers who want to buy insurance products and seek claims online,” Ngan told the Post.
“As we do not need to share commission with agents or pay high rents for a network of branches, we can charge a lower price than traditional insurers.”
Banks, insurers mobilise entire networks as Hong Kong rolls out tax schemes
According to the Government Food and Health Bureau website, Bowtie’s VHIS policy for a 25-year old female client would cost HK$1,608 per year, which is cheaper than many traditional providers which charged between HK$1,900 and the at HK$4,104 charged by MSIG Insurance (Hong Kong).
It is, however, not yet the cheapest. Sun Life Hong Kong, a traditional insurer which has vowed to compete with low prices, is charging HK$1,592 per year.
For a 65-year-old female, Bowtie’s VHIS is the least expensive at HK$6,876 per year, slightly cheaper than Sun Life at HK$6,895. The most expensive for this age group is Liberty at HK$21,028.


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Insurance

Former Hong Kong Financial Secretary John Tsang joins virtual insurer Bowtie as a senior adviser

Interview with Fred Ngan Yiu-fai, Co-Founder and Co-Chief Executive Officer of Bowtie Life Insurance, at Two Harbour Square in Kwun Tong. 19DEC18 SCMP / Roy Issa

John Tsang Chun-wah, Hong Kong’s former Financial Secretary, said he chose Bowtie because it reflected his belief in the benefits of digital technology. Photo: David Wong

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Analysts believe a big name like Tsang could help the digital start-up to compete with traditional insurers


Analysts believe a big name like Tsang could help the digital start-up to compete with traditional insurers.


InsuTech

John Tsang

Former Hong Kong Financial Secretary John Tsang joins virtual insurer Bowtie as a senior adviser

.css-1mniedq{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;}Analysts believe a big name like Tsang could help the digital start-up to compete with traditional insurers

Analysts believe a big name like Tsang could help the digital start-up to compete with traditional insurers