5 top priorities for the insurance industry in Hong Kong

Discover what insurers in Hong Kong should prioritize to stay competitive and how a robust payment strategy is key to gaining and retaining customers.

The insurance industry has evolved massively in the last few years. The proliferation of effortless, seamless journeys in all aspects of life has given insurtechs an advantage. Gone are the days of long, arduous form-filling and complicated sign-ups. Today, people arrange coverage with just a few taps or clicks and enjoy the flexibility of amending a policy to match their circumstances.

The ongoing rise in living costs in what’s already the world's most expensive city is driving Hong Kong consumers to prioritize value for money. People want to feel protected and reassured when buying an insurance policy. They also expect hassle-free renewals and claims. 

In addition, the competition is creeping in from unexpected sectors. Some retailers now offer embedded insurance with large purchases at checkout. To stay ahead of the competition and meet customer expectations, we compiled five ways to leverage payments to strengthen your brand’s reputation and build better relationships with customers.

The key to success is making the customer's life as uncomplicated as possible. Policyholders in Hong Kong are looking for an omnichannel experience that merges easy-to-use technologies with the personal touch of dealing with a company's representatives to buy insurance. Insurers in the city are responding with simpler and more convenient services.

The strong growth of virtual insurers reflects this. First authorized in 2018, total premiums for this group have shot up from only HK$3 million in 2019 to HK$580 million in 2022, according to Quinlan and Associates. Consumer willingness to buy insurance online also increased 46% from 2019 to 2020 alone.

These two areas will help you capitalize on this trend and meet customer expectations:

Easy sign-ups

The sign-up process influences whether someone successfully takes out a policy. Customers expect to be able to fill in their details in just a few minutes from any device. 

Many insurtechs offer app-based sign-ups. Enabling a feature like autofill can help customers complete the required forms in record times without dropping off halfway through. Prospects won’t have to enter their details over and over while comparing quotes, saving them precious time. 

Faster payments

Customers used to be able to use only certain types of payment methods to buy insurance: traditionally credit or debit cards. Since younger generations prefer digital wallets, like Apple Pay and Google Pay, insurers that don’t offer them are at a disadvantage. 

Digital wallets store all relevant information needed to complete a transaction so customers don’t have to pull out their cards to enter details. With built-in security features, the checkout process is faster as the process is less likely to fail.

Then there’s Click to Pay, built on EMV specifications and supported by major card schemes, such as Visa and Mastercard. The payment process is the same as digital wallets, but instead of entering the card details manually, enrolled customers see their cards on screen at checkout. Adding Click to Pay to your checkout allows you to tap into a larger customer base with safe and seamless payments.

Churn isn’t always voluntary, with customers choosing to switch insurers. Sometimes, it happens because of failed payments caused by an expired credit card or a change in billing information. Non-payments not only result in significant financial losses, but they also necessitate manual and labor-intensive processes for agents or the credit team to follow up on unpaid premiums. The good news is that non-payments can be easily stopped if you have a payments service provider with the right tools. These tools include:

Real time account updater

This feature automatically updates expired, lost, or stolen card details, eliminating a primary reason for failed payments. It achieves this by cross-checking the details with Visa and Mastercard and instantly retrying if there has been an update. The best part is it’s all done in real time without bothering the customer. 

Adyen has been offering the Real Time Account Updater with many global card networks since 2017. The service is now available in several Asian markets, including Hong Kong.

Auto retry

Many payment providers offer automatic retries on payments that fail due to technical errors. Since this takes place right after the first decline, customers don’t need to re-enter their details and, as with the account updater, don’t experience any disruption to the payment. 

In Adyen’s case, we only retry when there’s a high chance of success so your customers can secure their coverage.

Network tokenization optimization

Major card networks, such as Visa, Mastercard, and American Express, offer this service, which replaces primary account numbers (PANs) and other sensitive data with a token. Network tokens stay the same while the network updates the card details, meaning uninterrupted billing for cardholders and less work for you. Because of the built-in security, issuers trust these tokens, increasing the likelihood of accepted payments. 

The use of network tokens is on the rise. Visa alone has issued over 10 billion tokens since the technology’s launch in 2014. But some issuers are still slow to adopt the service, so you need to know when to use tokens and when you need the PANs to avoid making the process sluggish.

Adyen’s platform, powered by machine learning, knows when to use network tokens. It automatically switches to PANs if tokens fail. This avoids awkward conversations with customers that may cause friction and increases authorization rates.

Insurance companies often rely on multiple payment providers with separate systems for premiums and claims. This complicates operational processes and makes reconciliation a headache.

When you unite all your processes across business units, brands, and regions on one platform, you open yourself up to more opportunities and less friction. Replacing outdated systems with more modern technology may seem like a significant investment, but you will save money in the long run on costly fixes while improving the overall customer experience. 

Adyen, for example, feeds all payments across regions, channels, and systems into a single platform. This allows businesses to have a cohesive, detailed overview of their operations while identifying areas for improvement.

This digital acceleration will increase productivity within your team. You can also launch new products more quickly and integrate new technology partners seamlessly.

As a Hong Kong insurer, you’ll already be familiar with the industry regulations set by the Insurance Authority as well as the payments-related rules that the Hong Kong Monetary Authority oversees. 

But there are other regulations when it comes to payments which you must comply with. For example, 3D Secure is an authentication protocol widely adopted by card providers. It requires customers to provide two of three things: something they know (a password), something they own (a smartphone), and something they are (biometrics). These are verified within seconds, ensuring a smooth and secure checkout.

Then there’s the Payment Card Industry Data Security Standard (PCI DSS), which was developed by the PCI Security Standards Council (PCI SSC), an independent body made up of Mastercard, Visa, American Express, JCB, and Discover. A set of technical and operational requirements with six core principles, PCI DSS aims to protect account data, combat fraud, and reduce the chances of a data breach. Its compliance requirements are detailed here.

To ensure all areas of your business run smoothly, you need to work with partners that share your goals and aspirations.

When selecting a payments provider, look beyond the obvious aim of processing payments. Choose a partner that can provide everything you need on a day-to-day basis with round-the-clock technical support and a dedicated account manager who can also keep you abreast of new areas of opportunity and changing regulations. These simple but impactful qualities are the building blocks to success.

With some providers, you can accomplish even more together. Adyen, for example, provides access to tools that prevent risk and boost revenue. Even better, its products are all available through a single integration. And with all popular payment methods available right from the start, we’ll ensure your customers get the freedom and convenience they seek.