Bowtie, Hong Kong’s first virtual insurer, opens coffee shop in Wan Chai where clients can discuss policies, raise concerns

Enoch Yiu
·4-min read

“Can I please have a cappuccino and someone to answer questions about my life insurance policy?” It may sound unlikely, but Hong Kong’s first virtual insurance company has opened a coffee shop where customers can discuss their policies and raise concerns while enjoying drinks and snacks.

Bowtie Life Insurance opened the doors to Bow Coffee in Wan Chai on Thursday. The 1,500 square-foot space is open to the public and sits beneath an office space housing the company’s 70 staff on Queen’s Road East.

Bowtie’s customers can enjoy a discount while they raise questions to insurance staff about their policies. The shop, however, cannot sell policies directly because of licence restrictions.

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It is not the first digital financial company on the planet to open physical locations such as coffee shops to enable customers to talk face-to-face with qualified staff.

“It is like the Apple Genius Bar at the Apple Stores. When there is a physical shop, people know there is an ultimate location where things can be fixed,” said Michael Chan Kwan-yu, co-founder and co-CEO of Bowtie in an interview on Thursday.

“Likewise, Bow Coffee can be a venue for our insurance customers to relax and to raise any questions about their policies.”

The company was established in December 2018 by local insurance experts, and hired former financial secretary John Tsang Chun-wah as an adviser. It sells medical, critical illness and individual life policies online.

Since as long ago as 2001, digital lender ING Direct has established coffee shops in the US, Canada, Britain and Europe for customers to handle banking while enjoying a refreshing caffeine break. When US lender Capital One took over ING Direct’s American business in 2012, it also took over the coffee shops and renamed them Capital One Cafe.

Bowtie won the first virtual insurance licence from the Insurance Authority in December 2018. Under the terms of the licence, it has to sell products online and cannot sell through agents or a bank. It is not, however, barred from opening shops.

Virtual lenders face tougher restrictions. The Hong Kong Monetary Authority, which has granted licences to eight virtual banks, does not permit them to have any physical branches or shops, restricting them purely to offering banking services online or via an ATM.

“Insurance businesses operate in a different model from banking. Virtual banks can offer higher deposit rates to attract depositors to use their online services, whereas customers don’t tend to buy insurance policies for their cheaper price but because they want to have protection for their medical expenses or life coverage,” Chan said.

Since insurance policies may last 20 or 30 years, it is very important for insurance companies to provide after-sale customer services so as to retain policyholders and encourage them to buy more products.

“Bow Coffee is not aimed at making a profit but we hope it can break even,” Chan said.

Chan said the Covid-19 pandemic, which has ravaged Hong Kong’s economy, has helped Bowtie negotiate a lower rent for the premises. He declined to give details but said the rent was affordable enough for the company to move its office from Kwun Tong to Wan Chai.

The pandemic has helped Bowtie’s digital sales as social distancing rules forced more customers to go digital. The company has maintained monthly increase of 2o to 30 per cent in terms of premiums charged, Chan said.

The coffee shop model could be a good way of attracting younger customers, according to Eric Hui, chairman of the Hong Kong Federation of Insurers.

“It is a good idea for insurance companies to have a physical venue to serve customers. Insurance is a people business. The coffee shop could match with the tech savvy youngsters’ lifestyle,” said Hui.

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