Hong Kong-headquartered insurtech OneDegree’s founder and chief executive Alvin Kwock spoke about the rigid culture of traditional insurers and the potential for them to cease to exist via acquisition by a tech firm in an interview with finews.asia.
«In the past 200 years, a lot of insurance products have stayed largely the same,» said OneDegree’s Alvin Kwock in a recent conversation with finews.asia. «The types of iterations and the speed of iteration have more or less stayed the same.»
According to Kwock, insurtech firms like OneDegree who own their own core technology and have flexible platforms can deliver sizeable numbers of product iterations in nimble fashion.
For its flagship pet insurance product, for example, it was able to make five major iterations within 12 months.
Cultural Edge
And insurtech firms’ advantage extends beyond just the technological to the culture, Kwock noted, citing the common practice of marketing an excessive amount of figures as an example.
«In our products, you won’t find more than five numbers. When you look at the platforms of traditional insurers, you are flooded by 30, 40 numbers. Guess what? How many remember what they have bought?» he explained.
«You have to curate for your platform and consider the digital journey. This is one of the reasons why many incumbents fail to get it right when they pursue a digital strategy. It is not possible to just take the power of paper and put it online.»
Death by Acquisition
In addition to in-house development, traditional insurers have also opted to partner with insurtech firms like OneDegree and leverage their technology. And with greater success via this route, it begs the question of whether or not some may drop organic development altogether and opt to acquire a mature insurtech business instead.
«I see mergers and acquisitions heating up in this market and I can definitely see more large, forward-thinking players decide to acquire smaller fintech players,» Kwock said.
«But I would also not be surprised if some insurers were sold to tech platforms.»
By 2025
Kwock has repeatedly proclaimed his ambitions for OneDegree to be among the top three general insures in Hong Kong by 2025, and he said the firm is already a leader in coverage areas such as pets, e-commerce, logistics, home and fire.
Achieving this would mean that OneDegree, founded in 2016, would be able to rank amongst insurers established a century or more ago in only a decade.
«By 2025, 50 percent of consumer line products will go digital,» Kwock concluded. «In terms of technological advancements, the insurance market is pretty much the same as any other. Think about the transition from feature phones to smartphones. If you ignored this trend, you were left behind.»
