The Voluntary Health Insurance Scheme (VHIS) initiative by the Food and Health Bureau (FHB) will launch on April 1st. Hong Kong’s first virtual insurer, the Bowtie Life Insurance Company Limited, will participate in the VHIS.


In early March, Hong Kong’s leading English newspaper, South China Morning Post (SCMP), invited Bowtie Co-Founders and Co-CEOs, Fred Ngan and Michael Chan, as well as Bowtie’s Medical Director, Dr. Jacky Lio, to share their views on this new private health care program.

Question: Will your company join the VHIS and how much new health insurance business do you expect to get?

Fred: As a specialist health insurance company, Bowtie is proud to be supporting the  VHIS. The Hong Kong Government expects almost half of the existing 2.2 millions of individual medical insurance policies to migrate to VHIS, as well as another 200,000 first-time medical insurance buyers. We believe many of these policyholders will prefer online channels, especially those who are young and tech-savvy.

Question: How will this scheme bring change to medical insurance industry in Hong Kong? Why is it important?

Michael: One of the main challenges with our medical system is not of total capacity, but patient distribution. We think a higher insurance adoption rate can help ease demands for public medical resources. This is especially true for the management of chronic conditions, elective surgical procedures, and diagnostic scans – particularly among our aging population.

We think medical insurance can play an important role in helping with patient distribution and healthcare financing. Historically part of the Hong Kong public’s hesitation from purchasing medical insurance stemmed from many factors, including the lack of some features (that the FHB enhanced through its VHIS design),  also a perceived lack of transparency,lack of awareness on insurance needs, and a lack of confidence in insurer’s claim adjudication process. Although there are many problems that we, as an industry, still need to address, we think a government endorsed, regulated and standardized VHIS products an encouraging first step towards addressing these concerns.

On the actual scope of protection, VHIS was designed based on existing mass medical products, with the addition of useful benefits such as coverage for unknown pre-existing conditions, advanced diagnostic imaging and psychiatric coverage. We think the VHIS Standard Plan itself provides very good protection for the mass market, and is an excellent supplementary coverage for people who have a group medical plan from their employer already. Basically, we are big supporters of the Standard Plan in terms of it meeting coverage and affordability goals for many people. The  Flexi plan will allow for more innovations and richer coverage for more affluent consumers.

Question: Will the new health scheme with tax deduction replace those medical plans without tax incentives?

Fred: May be possible in the longer term but it is difficult to speculate too far out. In the short term, it should be a major consideration for anyone looking to renew or buy a new policy. VHIS provides more than just tax incentive, it introduces unique benefits such as unknown pre-existing conditions and guarantee renewal of existing terms, which are previously rare yet important for consumers. As more Flexi Plans are released and existing features become fully replicated in the VHIS, it would make sense that the plans become equivalent and with everything else being equal, the tax deduction would be a strong reason to change.

Question: How does this health insurance scheme compare with overseas markets? Are we offering more protection to Hong Kong people than the others or are we still lagged behind?


Jacky: Healthcare is highly localized with disease prevalence and cultural attitudes varying a lot. VHIS is custom-designed for Hong Kong, with myriad of customer protection features embedded and safeguarded by rigorous product approval processes, it can’t easily be compared to overseas product. It needs to be understood in the context of Hong Kong’s unique dual track medical system.

Hong Kong is blessed with a highly efficient dual track medical system with excellent quality of care in both public and private systems. The private system is relatively larger and better than most developed countries, with capacity to spare and is why we see significant opportunity for leveraging the private system more.

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