Chatbots helping pull Hong Kong insurers into the digital world. Just don’t ask them for sympathy

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It’s fast. It’s helpful. Just don’t expect the new internet chatbot at BOC Life Insurance to be sympathetic to news of your broken leg or death of a loved one.

“For death claim, which following item you would like to ask?” the Easy Chat bot matter-of-factly types back when you explain you need to file a death claim.

Easy Chat is part of the major Hong Kong insurer’s push into insurtech – bots and other digital tools that the insurance industry hopes will transform it akin to what happened with fintech and its blockbuster innovations such as cashless pay.

The efficient-but-emotionally-clueless Easy Chat bot made its debut in May. Since then, it has responded to 10,000 inquires for clients at BOC Life’s corporate website, Facebook page or WeChat account.

Other Hong Kong insurers are starting to jump in to surf the insurtech wave as well, largely to save money, provide speedy 24/7 service and also to get ahead of the competition. Behind the scenes, adoption of technology not so obvious to customers includes cloud storage, cloud computing, big data and predictive analytics.

And just last week, Tencent-backed Blue, the city’s first purely digital life insurance company, started selling policies.

A UBS report last year said insurtech could save the larger Asian insurance sector US$300 billion a year by 2025, though it did not have a breakdown for Hong Kong.

But insurtech raises potential downsides, as well. Loss of certain types of jobs, for example, that a human being is no longer needed for. About 1.5 million jobs throughout the Asian insurance sector cost be at risk in the medium term, said UBS, although it did not have a breakdown for Hong Kong.

And there are concerns around privacy issues, such as hacking of health information.

China is considering an ‘insurance connect’ that would lower barriers to Hong Kong insurers, enable local offices to process claims

The adoption of new digital tools coincides with big opportunities ahead: The Greater Bay Area, a plan by the central government to integrate Hong Kong, Macau and nine Guangdong cities into a financial and innovation powerhouse to rival Silicon Valley, is expected to create lots of new insurance business, as is China’s Belt and Road Initiative.

In addition to BOC Life, Manulife, Hong Kong's second-largest life insurer, in January launched an online medical claims platform, claimsimple.hk, that allows clients to file their forms online, leading to quicker turnaround for reimbursement. It has proven to be quite popular, with 30 per cent of the insurer’s eligible clients using it.

In June, Prudential Hong Kong Ltd. launched its “Hospital to Prudential” portal to provide paperless hospital claims for customers. Upon admission to designated hospitals, patients simply provide basic information including their name, Hong Kong identification number, and contact phone number and the claims process starts immediately.

Prudential also extended its chatbot capabilities to financial consultants who can submit hospitals claims for customers via its “Chatbot Claims.” By interacting with the chatbot on their tablets, financial consultants can receive an instant response about requirements. Prudential said the platform will reduce the amount of time it takes to submit a claim to as little as three minutes, or by 75 per cent compared to paper submissions.

TransAmerica Life (Bermuda) Ltd., a life insurer that focuses on the high net worth market and has a 15-per cent market share in Hong Kong, is developing an app that will allow existing customers to access the coverage of their policies, although no date has been set for the app’s launch.

“It's an exciting time for insurance, “ said Zia Zaman, MetLife's chief innovation officer of Asia. “Across the industry, there's a lot of great insurance companies that should be thinking about what the future will hold.”

A UBS study released last year found that insurers – mostly multinationals – such as AXA, Allianz Global, Aviva Life, AIA, MetLife, and Manulife have invested either in innovation labs or start-up accelerators to get new digital products into use.

Overall, the insurance industry in Hong Kong is expanding, with an especially big need for tech-savvy professionals, according to insiders.

Adrian Stones, insurance partner at KPMG China, said the technology could lead to happier employees who have handed off manual, repetitive work to chatbots and other new digital tools.

“CEOs would probably welcome the adoption of innovation as long as there is a well-formulated business case and especially where the return on investment horizon is within their tenure,” said Lapman Lee, partner at Deloitte and the co-chair of insurtech at the Hong Kong Fintech Association.

Digitalisation can also help companies better understand their customers and quickly respond to the market's changing needs and preferences, said Peter Crewe, AIA Hong Kong and Macau chief executive officer and chairman of the insurtech task force set up to explore opportunities and potential problems of new technologies.

Digitalisation will also help the Insurance Authority, the independent regulator that oversees the insurance industry. The regulator is working on guidelines to thwart hacking or other threats to privacy.

Despite the changes afoot, the city’s insurance industry is still considered to be lagging behind rivals in mainland China and elsewhere.

Mainland China, for example, has had some advantages over Hong Kong in the adoption of digital tools by insurers, including the widespread use of cashless payments systems and the explosion of technological innovation in the country, experts said. Hong Kong is comparatively small and has a more mature insurance market, reducing the incentive to embrace big changes, they said.

“The maturity of the Hong Kong insurance industry, compact geography, convenience of traditional insurance service offerings, and absence of digital disrupters may have initially slowed digital growth in the Hong Kong insurance industry but it is picking up rapidly,” said Crewe of AIA Hong Kong. “Regulatory support for digital adoption has been a key catalyst in the most digitally advanced markets.” Hong Kong is now doing that, with a “sandbox” programme, for example, that allows insurers to test out products before launching them.

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