Hong Kong is set to issue first license to an online-only insurance company next month in a bid to compete with rival centres in Singapore and London and attract more investment.

Hong Kong Insurance Authority (IA) CEO Clement Cheung told Reuters that the regulator is planning to grant its first licence under the fast-track system to speed up applications for insurers operating solely online to acquire customers and market their insurance plans.

The “fast-track” system was rolled out in 2017 after the region was criticised for being the slower adopter of latest technology.

Hong Kong online insurer

Eyeing a larger pie on $63bn insurance premiums market, the Hong Kong online insurer start up will compete with rivals, including AIA Group and the local operations of Prudential and Sun Life Financial.

Approving the Hong Kong online insurer is being seen as efforts to strengthen the region’s  “fintech” ecosystem, aimed at attracting more financial technology firms.

Cheung told the publication: “It has taken a bit of time, and sometimes people say ‘your fast track is not so fast’ but I wanted to look at the potential disruption to the market.”

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An EY’s reports highlights that over 80% customers in Hong Kong want to use digital and remote contact channels such as email, mobile apps, video or phone instead of discussing with insurance companies through their agents or brokers.

Additionally, the financial regulator is considering to set up a risk-based capital regime for insurers similar to global standards by 2021-2022 after completing the consultation processes and making the required changes to laws

Cheung added: “These two initiatives are on the top of our agenda. This is a clear roadmap, and we are committed to it. The industry is aware of it … the overall transition will be smoother.”