Ronald Leung outlines what the future of insurance in this lucrative market might look like. It discusses the effects of technology on personalization and asks why insurance providers are being left behind.

1. 1© GfK 2016 | Innovatielab – Lessons from abroad
The future of insurance:
Hong Kong perspective
Roland Leung | Commercial Director, MOI, APAC

2. 2© GfK 2016 | Innovatielab – Lessons from abroad
Hong Kong is one of the world’s fastest growing and highest
penetration insurance marketsWelcome to Hong Kong…

3. 3© GfK 2016 | Innovatielab – Lessons from abroad
Hong Kong is one of the world’s fastest growing and highest
penetration insurance markets
Population 7.32M with 6,690 persons per sq. kilometre of land
18.8M active credit cards, 257% penetration
16.7M active post-paid & pre-paid mobile SIM cards, 229% penetration
Welcome to Hong Kong… the land of many

4. 4© GfK 2016 | Innovatielab – Lessons from abroad
0
1.000.000
2.000.000
3.000.000
4.000.000
5.000.000
6.000.000
7.000.000
8.000.000
9.000.000
10.000.000
2010 2011 2012 2013 2014 2015
Newpremiuminlong-termbusinessUSD’000
Source: Office of the Commissioner of Insurance, Hong Kong and Swiss Re, 2016, note that new premium includes non-HK residents purchasing insurance in Hong Kong.
One of the world’s fastest growing and highest penetration insurance markets
CAGR 15.4%

5. 5© GfK 2016 | Innovatielab – Lessons from abroad
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
agree completely agree somewhat neither disagree nor agree
disagree somewhat disagree completely does not apply to me
Source: GfK survey among 27,000+ Internet users (ages 15+) in 22 countries – rounded
Why: Hong Kong is one of the world’s most prudent populations
‘Enjoy life today, save & invest later’ receives highest disagreement in Hong Kong.

6. 6© GfK 2016 | Innovatielab – Lessons from abroad
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
‘I have enough money to live my life on…’: country comparison
Why: Although Hong Kong people ranks middle to high in terms of ‘having
enough money to live my life on’…
Source: GfK survey among 23,000+ Internet users (ages 15+) in 19 countries – rounded
agree completely agree somewhat neither disagree nor agree
disagree somewhat disagree completely does not apply to me

7. 7© GfK 2016 | Innovatielab – Lessons from abroad
…not having enough money is still top reason for stress
Source: GfK survey among 27,000+ Internet users (ages 15+) in 22 countries – multiple answers possible – rounded
Having not enough money to live on is Hong Kong’s top reason for stress.

8. 8© GfK 2016 | Innovatielab – Lessons from abroad
Source: GfK survey among 20,000+ Internet users (ages 15+) in 16 countries – rounded
Why: tracking of personal health and health-consciousness
have been encouraged by wearable devices
Yes, I currently monitor or track
Not currently, but I have monitored or
tracked in the past33% 18%

9. 9© GfK 2016 | Innovatielab – Lessons from abroad
The Hong Kong market is densely populated with insurance companies and intermediaries.
With a working population of 3.9M and an insurance intermediary population of 65K, there is 1
agent / broker among every 60 working individuals.
A lucrative market attracts intense competition
161 insurers: 94 general; 28 long-term;
19 composite
Licensed insurance agents > 56,000
and brokers > 9,000.

10. 10© GfK 2016 | Innovatielab – Lessons from abroad
With more predictive health analytics…
https://www.youtube.com/watch?v=UBS63V2xrg8

11. 11© GfK 2016 | Innovatielab – Lessons from abroad
… people are in better positions to determine their health

12. 12© GfK 2016 | Innovatielab – Lessons from abroad
… with this, customers can predict the protection they need
The key fitness genes are reported on in
this comprehensive report.
2 Premium Fitness
Report
A 12 week programme of individualised
nutritional menus based upon your ideal
diet type.
5 Ideal Diet Plan
DNA Fit will meet up with you or deliver
the testing kit to you so that you can
quickly and easily collect a sample of
your DNA via a cheek swab.
1 Test Kit
This is the easy to digest overview of
exactly wha.t your gene report means for
you.
4 Infographics
The key nutritional genes are reported on
in this comprehensive report
3 Diet Professional
Report
Have a consultation with DNAFit Director,
to breakdown all your results. He will
make his suggestions to your dietary and
training habits to match your goals
6 Personal Fitness
Consultation

13. 13© GfK 2016 | Innovatielab – Lessons from abroad
Customization has already been provided in many lifestyle
categories
Movies Airlines Hotels Grocery F&B Music Fashion
… empowered by a growing array of e-payment systems
A host of lifestyle purchases across multiple categories are now completed with total freedom

14. 14© GfK 2016 | Innovatielab – Lessons from abroad
Apple’s online-to-offline distribution
strategies created an even richer, more
self-directed purchase experience.
Get in StoreHome delivery
Order Online
Try in Store.
Enjoy iPhone
Search Online
OR
Aware of a New
Model

15. 15© GfK 2016 | Innovatielab – Lessons from abroad
And it is now adopted by players in other
high-value purchase categories.
See in Store.
Enjoy Tesla
Search Online
Delivery
Aware of a New
Tesla model
Design and Order
Online

16. 16© GfK 2016 | Innovatielab – Lessons from abroad
Most insurance products of today are bundled and only allow limited premium variations by age, gender and medical history.
Content of coverage is ‘standardized’.
General Offers
… insurance products are lagging behind

17. 17© GfK 2016 | Innovatielab – Lessons from abroad
Customized insurance offers
by lifestyle and fitness are still
a minority…
Launched in July 2016, Prudential is the first insurance company in Hong Kong to
offer customers access to an innovative DNA-based health and nutrition
programme. It is launched as a value-added service but results of the analysis do
not yet affect insurance premiums.
Insurance with
biometrics Insurance with nutrigenomics
… product innovation is still at budding stages
https://www.youtube.com/watch?v=_Z-qtQuZ04o

18. 18© GfK 2016 | Innovatielab – Lessons from abroad
And agents may not be there when they are most needed
PerceivedValue
Underwriting Claims
Financialincentive
Selling Aftersales
Agent assists customer
completes application
& underwriting
procedures
Agent provides
personalized service
when claims are required
Agent makes
unsolicited contacts
with customer for
product introduction
Agent contacts
customer regularly to
provide follow-ups &
policy reviews

19. 19© GfK 2016 | Innovatielab – Lessons from abroad
Peer-to-peer advisory apps already rising…
客路 八只小豬 窮遊 途牛 最會遊 一起嗨旅行 Viator

20. 20© GfK 2016 | Innovatielab – Lessons from abroad
Would similar apps be helping consumers buy what insurance they
need in the future?
Triploc 8 Pigs

21. 21© GfK 2016 | Innovatielab – Lessons from abroad
Insurers are waking up to trend towards self-directed insurance purchases.
Summary
1
Hong Kong market has been ‘insulated’ from technological advancements
Influx of local and Mainland China business masks urgency for innovation.
2
Biometrics & DNA sciences help consumers control own health & protection
Standard mortality & morbidity tables still apply?
3
B2C to O2O to P2P
Consumers prefer in-person service more as they progress with the experience cycle
4
Repositioning role of insurance agents
Would agents of the future be rewarded more for providing personalized aftersales services?

22. 22© GfK 2016 | Innovatielab – Lessons from abroad
The future of insurance:
Hong Kong perspective