Bowtie Life Insurance, Hong Kong’s first virtual insurer, said it raised $22.6 million in its second funding round from a group of investors led by Mitsui & Co., getting both the financial backing and strategic advice of one of Japan’s largest conglomerates to steer its growth.
Mitsui invested in Bowtie’s Series B fundraising with the insurer Sun Life, which was also a Series A investor. In its first fundraising round in 2018, Bowtie raised HK$234 million (US$30 million) from Sun Life and the HK X-Technology fund, a vehicle backed by Sequoia Capital and chaired by Tencent Holding’s founder Pony Ma Huateng.
“Mitsui’s investment is not just about adding fresh capital for our development in Hong Kong; the new shareholder will appoint a person to join Bowtie’s board to help develop our health care and insurance solutions,†said Bowtie’s co-founder and co-chief executive Michael Chan Kwan-yu in an interview with South China Morning Post. The two investors will help Bowtie expand into the Greater Bay Area and other Asian markets, Chan said.
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The Mitsui Group is one of Japan’s largest conglomerates, involved in a wide range of businesses including machinery, chemicals, food, textile, health care and financial services. Mitsui & Co. is the largest shareholder of Kuala Lumpur-based IHH Healthcare Berhad, which operates a network of 80 hospitals in 10 markets, including Hong Kong’s Gleneagles Hospital.
Bowtie was established in December 2018 by local insurance experts, with the former Financial Secretary John Tsang Chun-wah as its adviser. It sells insurance policies online for medical, critical illness and life, offering $3.8 billion of coverage for 45,000 customers as of September.
As a virtual insurer, Bowtie has to sell its policies online without employing sales agents or using banks as its sales network. It is allowed to operate bricks-and-mortar shops, which is why Bowtie opened a cafe in Wan Chai in March to serve as its customer service centre. It also teamed up with the health care service provider JP Partners Medical in July to launch a services centre in Wan Chai.
“The physical shops help to establish a connection with the customers,†Chan said. “The health care centre has over 300 visitors per month and many repeated customers.â€
Hong Kong now has four virtual insurance companies and eight virtual banks, a rising trend that has gained traction and helped more people gain access to banking services and insurance coverage, he said. The city faced an $885 billion shortfall in mortality protection, which translates to HK$1.9 million for every working adult in the city, according to a study by the Insurance Authority.
“Traditional insurance companies are also expanding their digital platforms, which would add competitive pressure to virtual insurers,†he said.
The customers opting to remain with bricks-and-mortar insurers are a different group from the ones willing to try virtual insurers, said Louis Tse Ming-kwong, managing director of Wealthy Securities.
“Virtual insurer can attract the younger generation of customers to buy simple products such as car or travel insurance,†he said. “Complicated policies, particularly those wealth management products aimed at high-net-worth customers, will continue to require professionally trained agents to provide the right kind of advice.â€
https://sg.news.yahoo.com/bowtie-raises-us-22-6-034832749.html
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Category: Japan
