First virtual general insurance licence goes to Avo as Insurance Authority promotes insurtech in Hong Kong

The Insurance Authority granted its first virtual general licence on Tuesday as it tries to encourage wider use of technology by Hong Kong’s insurers.

The recipient was Avo Insurance, a purely digital company which will sell its products online without the use of agents or brokers, thus keeping costs down.

Online insurance services have taken off well in other markets such as the US, Europe and even mainland China recently. Clement Cheung Wan-ching, chief executive of the Insurance Authority, believes the virtual licences will help foster Hong Kong’s insurance technology, or insurtech, sector.

“Insurtech provides the opportunity for both consumers and the industry to improve the customer experience, enhance inclusiveness, build a sustainable fintech ecosystem, reduce the compliance burden and induce greater supervisory efficiency,” Cheung said.

Avo is 51 per cent owned by Asia Insurance, the general insurance arm of Hong Kong-listed Asia Financial Group, while the rest is owned by Zhang Lei, founder and chief executive of Hillhouse Capital. Hillhouse, which manages US$60 billion of assets, is known as an early investor in many technology giants including Tencent Holdings, Baidu, Didi Chuxing and Meituan Dianping.

“Avo is a younger brand and more appealing to millennials and young professionals, while Asia Insurance is an established brand. The two will have different market positioning,” said Winnie Wong Chi-shun, chief executive of Avo and also Asia Insurance.