OIC considers special licence for digital business
The Office of the Insurance Commission (OIC) is studying the possibility of issuing a special licence for digital insurance business to encourage traditional insurance firms to revamp their business model amid disruptive technology.
"Digital insurance businesses do not have high operating costs and help consumers swiftly access their policies, offering affordable premiums," said OIC secretary-general Suthiphon Taweechaikarn.
"This business model can help traditional insurance businesses revamp their strategy to stay competitive in a market increasingly dominated by technology."
The OIC will study the overall impact and advantages of digital insurance before proposing the idea for the Finance Ministry's consideration and cabinet approval to issue an operating licence.
The OIC's study is based on permission by Hong Kong's Insurance Authority to grant the first virtual general licence for Avo Insurance, a purely digital company selling its insurance products online without using agents or brokers, the South China Morning Post reported.
Virtual licences are designed to help develop Hong Kong's insurance technology sector, according to the Insurance Authority's chief executive.
Regarding the OIC Gateway development project, it is expected to be completed in 2020, said Mr Suthiphon.
The gateway is a technological system that enhances the services of the insurance industry and acts as a channel for linking and exchanging information across the industry, such as claim information and claimants' policy data.
Insurance data collection will initially start with auto insurance, based on both a voluntary and compulsory basis, he said. Data collection will expand into life and health insurances in later stages, said Mr Suthiphon.
Permanent secretary for finance Prasong Poontaneat said insurance businesses have to adopt technology to enhance efficiency and lower operating costs. Technology can help analyse data and consumers will benefit in their search for cheaper insurance premiums, he said. Insurance products should also cover low-income earners and the government will push for low-cost premiums as part of state welfare in 2020, said Mr Prasong.