Why insurance broker Apex is digitizing personal lines

Apex Insurance, a family-owned insurance broker in Hong Kong, has partnered with an insurtech to breathe new life into an aging, sunset business segment.

Most of the broker’s HK$230 million in annual premiums sold involves high-margin areas serving local small businesses and listed companies. But two years ago it discontinued selling personal lines, where the margins had disappeared. Coverage for travel, domestic helpers, motor and home were no longer worth promoting.

But the company maintained these for its existing clients. Personal cover accounts for about 10% of business in premiums.

Even this, however, was becoming a problem, because all the form-filling and client hand-holding was distracting salespeople from conducting more valuable business, says Andrew Mak, director at Apex Insurance and part of the family behind the business.

“I had to convince the family that converting offline business into online could improve the margins,” he said. “But that meant I needed a platform.”

Enter CoverGo

Last year he hired CoverGo, a local insurtech startup that specializes in digitizing insurance businesses. The online service, called Apex Compare, launched in November, 2018, just for travel insurance.

Its first fourth months saw HK$800,000 written among six participating insurance companies, with no marketing other than an email to the existing clientele.

Tomas Holub, CEO at CoverGo, says his company builds a customer database that lets insurance brokers and bancassurers digitize their paper processes, generate digital signatures, and integrate with primary insurers’ systems.

“We let companies track their customers, their policies, issue quotes, and manage commissions,” Holub said.

Connecting carriers

CoverGo also had to build APIs connecting three carriers directly to the online site (Allied World, Starz and Zurich), while three others still require users leave Apex Compare and click into their own websites to execute a sale, at risk of customers dropping off (AXA, Blue Cross and Generali).

Other financial comparison sites active in Hong Kong face similar challenges. GoBear has to redirect consumers to the websites of participating insurers or banks. MoneyHero (which also has an insurance broking license) has also found insurers and banks slow to connect via API.

“The insurance industry is low-tech,” Mak said. “Insurers aren’t ready to fund new I.T.” So any new initiative had to come from Apex. Integrations with insurers proved to be the slowest part of the process, taking up to six months to meet carriers’ compliance and operations concerns – blowing out the original timetables that CoverGo had initially promised.

The insurance industry is low-tech

Andrew Mak, Apex

But now that the service is up and running, future iterations can be done quickly – giving carriers a new online distribution channel without them needing to build anything from scratch.

Once Apex Compare has launched all four of its personal-insurance lines, Mak says the next step will be to leverage the site to create loyalty programs, tiers between free and premium services, and add on benefits from carriers.

Then it will be on to new products. In Hong Kong, the government has recently created new tax incentives around health care. These Voluntary Health Insurance Schemes (VHIS) would have remained out of Apex’s reach had its personal lines remained offline. But with the business repurposed in an efficient manner, it can start considering new initiatives, instead of just writing off personal business as a lost cause.