Defining a New Category of Health Insurer

In preparation for our third anniversary celebrations, we reflect on the vision statement written three years ago – a true north to align what we inspire to be:

In five years, Bowtie will be the first company that comes to your mind when you think of health insurance

We may not be the largest in five years, but when people think about health insurance, Bowtie comes to mind first. Mindshare is ours to win. Bowtie will define the new category of being a health insurer.”

We know our first virtual insurer title gives us a first mover advantage, but history reminds us that pioneers don’t always win. To own a new category, we came up with a simple yet crystal clear strategy.

Position Right, Scale Fast and Invest in Core

To be frank, both the strategy and vision haven’t really changed. Consistency is good because it means we found the right model, and more importantly, the right purpose. We take this chance to share with you our startup journey, along with some interesting stats and behind-the-scenes stories.

The world changes around us; underlying factors in digital health insurance remain very strong – even strengthening and we know we’re in the right space, here’s why:

Online insurance is more widely accepted, and competition is intensifying. The online, no-agent channel was new and unproven. Prior to Bowtie, digital adoption was less than two percent, it is probably now in the eight-percentage range, equivalent to at least 5x increase in under 3 years and there are no signs this will slow down or reverse. 

The health space is still the right area, now more than ever. The public health system continues to struggle. This accelerates the privatisation of healthcare and the importance of health insurance. More people are buying insurance for access to private healthcare while COVID-19 and the social situation only accelerated these trends, even faster than we expected, making our business case even stronger. 

Bowtie itself is reaching credibility in the new space. We have seen Bowtie from non-existent to the most googled brand when people search for VHIS¹. In just three years, we took over 30% of the market share, which is more than the search volumes of several top insurers combined that have been around more than a hundred years. Winning mindshare is our top priority as a new brand. 

No company can own a category without being a market leader. Scaling fast builds customer base and solidifies our status as a new challenger. When we’re sub-scale, we can’t realise the real technology efficiency to benefit our customers. 

This year, we reached 10,000 VHIS policies in January, and our first quarter total VHIS premiums doubled that of 2021 since the 5th wave of COVID-19 hit us. 

In the past few months, we’ve added nearly 1,000 new VHIS customers per month to our portfolio. The growth accelerates, as the words spread and trust is built between our brand and our community. While most customers are first-year medical insurance buyers, many of them switched over to Bowtie from competitors for better price and user experience.

Our average annual VHIS policy premium has increased 60%, from $2,500 to $4,000 per year. Over 75% of our customers chose VHIS flexi plans for more comprehensive coverage, while the rest went for VHIS standard plans primarily to “top up” their existing coverage. A quarter of the new customers bought VHIS Pink, a full cover plan for any hospitals and surgeries, up to an annual benefit limit of $10m. This reflects the higher consumer confidence in our brand and contributes to our top line growth when the average premium of Bowtie Pink is 2.8x that of other VHIS. 

Another avenue for growth is multiple purchases. We’re pleased to see our customers buying multiple policies, not just supplementary products for themselves (e.g. cancer, critical illness, term life), but also for their spouses, kids and parents. One policyholder even bought 11 policies for himself and their families in just a week!

Beside google searches, we’re proud to be ranked first in the direct channel in terms of number of paid policies sold, consistently throughout the entire 2021 according to Insurance Authority’s market statistics².

We have never had a “normal” period since first launched. Bowtie withstood social unrest, pandemic and challenges from competitors entering the digital space. We were often asked what if the largest insurers come after us with bigger brands and budgets; and we can now proudly tell you that even when competitors give out discounts (as high as 90% off the first year) to sell the exact same products, we’re still ahead while Bowtie’s market share is approaching 30%! 

It isn’t about being a marginally better brand. It is about being the most relevant brand in the digital health space. It’s about Bowtie becoming the first health insurance company that you think of when you need health insurance. We’re not there yet, but we’re on the right track. 

Conventional wisdom told us that “insurance is sold, not bought”. But we discovered a meaningful size of young and healthy pool of customers who prefer self-serve over traditional sales channels. And again, there are no signs that such a trend will slow down or reverse.

Big insurers are following and stepping into our territory – validating us and making digital insurance real. More and more insurers are investing and going aggressively into digital. We have seen a lot more “no savings” products being offered (term life, critical illness, medical) transparently – which is a positive change that we hope to see. 

All of these help make our “home court” of digital more legit. That also means we have to defend our category through the strength of our core capabilities. Here’s what we bet on:. 

First, we have to keep investing in our hero VHIS products. it’s the second year we offer a free benefit upgrade, and the three year in a row with no premium increase. We don’t take your insurance as just a fixed legal contract, or something that we can sell you and forget about later. Instead, the VHIS you have with Bowtie is constantly improving. Think of it as your Tesla car, iPhone or Netflix, where you get regular software and content upgrades.

Second, we will keep building our digital technology to provide superior user experience and cost savings. Customers already love our seamless user experience from instant quotation, to 100% online underwriting and claim, but the true power of technology is yet to be unlocked. 

One way to measure technology efficiency is to look at the average protection amount per number of employees. Since launch, our total protection amount has exceeded HK$40 billion, and our employee count has increased 2.2x, while the protection amount has increased 270x! On average, each employee including our junior analyst is responsible for $400m of protection amount; that is enough to cover 1,481 treatments of colorectal cancer⁴ – a milestone that is very meaningful to us. At scale, our technology efficiency becomes unstoppable. 

Last one is to double down on customer service. There’s still a misconception that virtual insurers are not providing any human services. Contrarily, we have been investing in customer services; in fact this is one of the less scalable parts of our business as we insist on one-on-one services to handle all customer enquiries, across voice calls, live chat, email, whatsapp and other means prefered by our customers. Up until now, we have handled over 100k customer enquiries with an incredibly high tickets resolved percentage (99.8%) and customer satisfaction (CSAT% 90.8%). 

We have no plan to replace human touch with modern technology. Customer empathy is the foundation of everything we do from product design, to customer experience and claim fulfilment. Our new ads (with kayan9896 again) will elaborate on our marketing tagline “helpful services, no pushy sales” to demonstrate how we can help you – stay tuned!

2021 was a great year for Bowtie. Our achievements are based on what is done and shipped, but it is the people and values behind it that enabled us. We’re proud to have a world-class, strong team that it is a privilege and real joy to be working with. 

We’re humbled to have this rare opportunity to define a new category of health insurer, as we truly believe technology will change how customers access healthcare fundamentally. We’re inspired to do more for Hong Kong, and to deliver high quality and very, very affordable health protection for millions of families. 

Our third year was great, and the fourth year will even be more exciting. Thank you all!

Check out our 3rd anniversary VHIS offer!