Bowtie Hong Kong: An Entrepreneurial Venture to Digitize Insurance

Bowtie Life Insurance Company Limited (Bowtie) was the first virtual insurance company licensed by the Hong Kong Insurance Authority. Since obtaining the licence in 2018 and raising two successful rounds of venture capital, Bowtie had developed into a reasonable size, of about a hundred employees, by early 2022. Bowtie was focused on developing and selling medical insurance products under the Voluntary Health Insurance Scheme (VHIS), while also selling term life insurance. The founders’ intention is to bring cheaper, more user-friendly insurance products directly to the mass market through online channels, while disrupting the traditional insurance industry by eliminating agents and brokers. The COVID-19 pandemic in 2020–2022 brought both opportunities and risks to the virtual insurance sector. While online purchases increased significantly during this period, the overall gloomy macroeconomic outlook put downward pressure on insurtech, fintech industries, and the venture capital that funded them. With Hong Kong’s mortality rates soaring, Bowtie had to consider the effects of the pandemic on its profitability and determine its future strategy. While continuing to focus on the VHIS segment, how should Bowtie expand into other product segments? When and how should the company expand to Mainland China and/or other neighbouring markets outside of Hong Kong?

<p align="justify">This case is suitable for a basic insurance course as well as for senior undergraduate and graduate-level courses in fintech, management of innovation, and international marketing.<br><br>The case is about setting product and market strategy in the insurtech industry. In particular, it illustrates the variety of business issues facing an insurtech entrepreneur, including market positioning, pricing, competitors, product design, funding, and modes of expansion. The case places students in the depth of the worst weeks of COVID-19 when Hong Kong’s mortality rates topped the world’s rates, and asks students to consider the effects of the pandemic on Bowtie’s profitability and to set the company’s future strategy.<br><br>After working through the case and assignment questions, students are expected achieve the following objectives:<ul><li>Gain a general understanding of the traditional insurance industry, and its key segments and business model.</li><li>Explain how digital insurance products can reduce market inefficiencies in the traditional insurance industry.</li><li>Appreciate the market dynamics and regulatory developments of the fast-changing insurtech sector amid the COVID-19 pandemic.</li><li>Assess the impact of the pandemic on an insurance company’s revenues and payouts, both qualitatively and quantitatively.</li><li>Analyze product expansion from a successful, narrowly focused niche strategy.</li><li>Recommend the best geographies for expansion in the medium to long term.</li></ul>

• insurtech industry
• fintech
• digital insurance
• market positioning
• pricing
• competitors
• product design
• funding
• modes of expansion
• traditional insurance industry
• digital insurance products
• market inefficiencies
• regulatory developments
• COVID-19 pandemic
• insurance company's revenues
• product expansion
• geographies for expansion
• niche strategy