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Interview with Alvin Kwock, Founder, OneDegree

When it comes to naming the pioneer of online insurers in Hong Kong, OneDegree comes straight to mind. Alvin Kwock, Founder of OneDegree shares the struggles he faced in a highly offline industry and how he hopes to address the protection gap. Started with a focus on pet insurance, they will be launching health and cyber insurance products in the coming months.
  1. Could you share with us the story behind OneDegree and tell us more about yourself?

    Our name “OneDegree” was inspired by the concept of “six degrees of separation”. We want to bring people closer through the use of technology, which is why we call ourselves OneDegree - bringing people one degree closer. As for me, I was an economics major in university, and I was interested in the insurance field. I even self-studied for the actuarial exams. But I decided to join J.P Morgan instead after I graduated, where I analysed and predicted technology trends for 12 years. It was an incident years ago that made me question the efficiency of insurance companies. At the time, my mother was diagnosed with cancer. Her roommate in their semi private ward had expected her insurance policy to pay for her hospitalization. But because it took months for her claim to be approved, my mother’s roommate ended up taking out a personal loan in order to pay her bills. I was disappointed with how things went and that’s when I decided I would try to make a difference. That’s how OneDegree started.

  2. What is OneDegree's business model and what does it hope to change in the insurance industry?

    To put it simply, we have a licensed insurance business and a technology business. Hong Kong has granted four virtual insurance licenses and we hold one of them. Our licensed insurance business is focusing on pet and health insurance at the moment, and we’re also developing products to meet the needs of e-Commerce customers. Pet insurance is our first product, which was launched right after we obtained our license. Our end-to-end digital platform allows consumers to purchase a policy in about 3 minutes, compared with maybe 2 days under the traditional insurance process. Similarly, when it comes to claims, it used to take weeks to settle. We have a service level guarantee that 90% of approved claims will be reimbursed within 2 days, and we are working towards of settling claims in seconds in a few years’ time. Our technology business works with various insurers around the world on insurtech solutions. For many insurance companies, it can take several months to configure a new product on their systems. For us, it takes about 10 minutes to do the same thing on our system. We have also built a core insurance system from ground up to support our virtual insurance business and licensed out our core system to different companies because we really want to lift up the industry standard together.

  3. Are there any expansion plans in the pipeline? What are the challenges you face?

    We’re a young company and we’ve only just recently received our virtual insurance license, so we certainly excited to start executing on our expansion roadmap. Pet insurance is our debut product, and we have a pipeline of products and services under development. The COVID-19 situation has also created new areas where OneDegree can create value, such as the acceleration of e-commerce and the widespread adoption of working from home. To cater to these new trends, we are planning to launch services in cyber security, risk assessment, and risk prevention soon. The other dimension of our expansion plan is geographic. We have offices in Hong Kong, Taipei, and we also have team members in Thailand. From those strategic locations, we are also looking at expansion opportunities in China and Southeast Asia. We face challenges like most new players in the market. One thing we pride ourselves on is our excellent customer service and the drive to be 10 times better than what we were in the past. For example, as we continue to shave the claim settlement time, eventually getting it down to seconds, the operation flow of companies will completely change. It takes a certain kind of mindset to want to exponentially improve the whole user experience regardless of what everyone else is doing. With COVID-19 happening right now, incumbent players are looking to improve their operational efficiency. As a result, there is more demand for the solutions we offer.

  4. What does the insurtech scene look like in Hong Kong?

    Compared to other markets in the region, Hong Kong regulators have been very rigorous in putting in place a framework for insurtech and in reviewing candidates applying for a virtual insurance license. Currently, four licenses have been issued, including ours. We also observed that a lot of the incumbent players are now very keen on digitalization. The competition is finally starting to take off, and that’s a good thing as it’s healthy for the development of any industry. When we first started doing market research on pet insurance, no one really took us seriously. But since we launched our pet insurance in April, we’ve seen other insurers step up their game. Pet coverage is not traditionally an area insurance players focus on, so there has been a protection gap. It’s great news to us that gap is being addressed, thanks to insurtech. All of the insurance players in Hong Kong realize the need to allow purchase to be done online, at the very least, in order to keep up with today’s tech savvy consumers. Now, the focus is on moving beyond front-end and extending the digital experience through the entire insurance value chain for both internal and external users.

  5. Do you foresee any changes in the market over the next 12-18 months?

    I think the e-commerce trend will continue to accelerate, propelled by our experience with COVID-19. This is a positive trend for us because greater adoption of e-commerce will create more demand for insurance protection. A huge amount of user data, such as personal credit card information, is handled by e-commerce platforms, creating risks. And when there is risk, there is demand for insurance. Secondly, digital insurance is also a kind of e-commerce and it provides a totally different experience for users. We expect consumers to keep demanding insurance products that are faster and smarter going forward. I’ve also heard from a few insurance companies recently about what they’re doing to address health concerns in the workplace. COVID-19 has prompted everyone to be diligent about hygiene, and as the claims adjudicators handle a lot of paper claim forms and paper receipts in their work, they’re required to wash their hands every two hours. Of course, now insurers are thinking about how to move a lot of their work online. It’s not only good for consumers, but also good for the staff and the company’s operations. We’re going through a tough time for sure, but it’s also an opportune time to look at all the moving parts and reimagine a better model going forward.