Transforming the Insurance Industry      

How the rise of technology is shaking up insurance     


By Michael Chan


It’s odd that the insurance industry has remained relatively unchanged since it emerged in the 1680s. Insurance is still mainly sold through human advisors carrying stacks of brochures and forms. The products are usually explained to prospective customers in coffee shops–a fitting setting, as London’s Lloyd’s Coffee House is often considered to be the world’s first insurance market.      


People working in the industry, including myself, take notice when we see new payment and lending companies pop up, raise significant funding, and start becoming a part of our daily lives. We then wonder when this change will spread to other financial services like insurance. 


We are slowly seeing insurtech growth across Asia. Asian insurers have spent US$35.2 billion on technological advancements as of Q3 2018 (Capco Digital). Last year, Thailand launched the Insurtech Centre of Thailand; Malaysia established a regulatory insurance sandbox to encourage innovation; and the Philippines announced a plan to increase digitization of the industry. 


In 2017, the Hong Kong Monetary Authority and Insurance Authority launched the virtual bank and virtual insurance license schemes to spur fintech development. According to a 2019 survey by Consumer Search Group, 64% of Hongkongers intend to purchase insurance through one-stop, online platforms, yet the number of insurers who support digital channels is lagging. 


While other industries such as healthcare, customer service, and ecommerce have already integrated automation to enhance their businesses, insurance is just starting to play catch-up. By leveraging the abundant data owned by insurers, tech can disrupt the insurance journey and give customers a more affordable, transparent, and streamlined experience. 


Below are a few examples of how technology can shake things up. 


Intelligent automation


Application and claim processing often take a long time, but they are steps that cannot be skipped. With the use of smart automation technologies, large amounts of data can be processed in a short time, more efficiently, and with fewer errors. In turn, applications and claims are issued much faster and at lower costs, improving customer experience. 




Millennials have short attention spans and have little interest in lengthy, boring questionnaires, even when they are necessary for financial planning. By gamifying customer engagement, insurers can provide useful information and affect policyholder behavior for the better. 


During my consulting days at Seasonalife, we developed a simple experimental life expectancy calculator based on mortality data to estimate the effect of lifestyle and behavioral changes. We found that an average 30-year-old male Hongkonger, who does not smoke, can expect to live to 88 years. But this age could vary by five to 15 years with small lifestyle changes, such as drinking more than two glasses of alcohol a day, increased consumption of red meat, and getting divorced. 




Wearable tech and health apps are an up-and-coming trend, with the global wearable healthcare and medical devices market expected to reach $27.5 billion by 2026 (Reports and Data). Insurers can make use of these technologies by actively monitoring customers’ health, and becoming more involved in their well-being, rather than just being passive administrators of policies and claims. 


Better alignment of incentives across payers, providers, and patients will be one of the most critical challenges for the health and insurance industries. 


It is exciting to witness technology revolutionize the insurance industry, but the main goal for insurers should remain the same: to put their customers’ needs first and not lose sight of the impact of the human touch. We believe that insurance is, after all, an important social good that everyone needs.



 About Michael Chan


Michael is co-founder and co-CEO of Bowtie, Hong Kong’s first virtual insurance company. He is an actuary by training and believes that insurance serves a fundamental social good and can be bettered through using technology to reach underserved customers. Michael is a Fellow of the Society of Actuaries (FSA), a member of the Actuarial Society of Hong Kong (ASHK) and a holder of the Certified Financial Planner (CFP) qualification.

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