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Insurtech Corner


The development of financial technology ("Fintech") is important in strengthening the role of Hong Kong as an international financial centre. Against this background, the Insurance Authority ("IA") has been closely monitoring the development and application of technology in the insurance industry ("Insurtech") and proactively assisting market participants to tackle Insurtech-related regulatory issues.

The IA has launched various initiatives to promote Insurtech development in Hong Kong. These include:


Insurtech Sandbox ("Sandbox")

The IA launched an Insurtech Sandbox on 29 September 2017 to facilitate a pilot run of innovative Insurtech applications by authorized insurers to be applied in their business operations.

Introduction and background

The IA observes that authorized insurers may have initiatives in applying innovative technologies in their business operations but may be uncertain if those initiatives can meet the supervisory requirements of the IA. With a view to promoting technology development for the insurance industry in Hong Kong, the IA considers it necessary to adopt some flexibility in the supervisory requirements.

The IA would consider an Insurtech initiative to be a pilot run under the Sandbox to collect sufficient data to demonstrate to the IA that such Insurtech application can broadly meet relevant supervisory requirements arising from its codes and guidelines and other regulatory practices.

Who can apply for a pilot trial under the Sandbox?

The Sandbox is available to Insurtech and other technology initiatives intended to be launched in Hong Kong by authorized insurers. The IA will work with the authorized insurers and technology companies cooperating with them.

What are the principles of the Sandbox?

The following principles apply to the Sandbox:

  1. Well-defined boundary and conditions

    There should be a clearly defined scope of the trial, including:

    1. Timing and duration, or expected official launch date of the initiative to the market;
    2. Size and type of insurance business, and targeted users. While external customers serving as users of the trial can give live and real data for the initiative under trial, other types of users, e.g. selected group of staff of the authorized insurer may also serve the purpose of testing under the Sandbox;
    3. Technology involved;
    4. Expected outcome and success criteria of the trial.
  2. Risk management controls
    There should be adequate control procedures to achieve the objectives of the relevant supervisory requirements of the IA.
  3. Customer protection
    Adequate safeguard should be in place to protect the interests of customers during the trial. For some cases, it may be necessary to make known to the customers that they are put into the pilot run with which the related supervisory requirements may not be fully complied. There may be cases where appropriate arrangements should be made for customers to withdraw from the trial (e.g. refund of premiums) or to receive fair compensation for financial losses caused by failure of the trial.
  4. Resources and readiness of the insurer
    The insurer should be ready for the test in the Sandbox with adequate resources and should be able to demonstrate that the Insurtech initiative is ready for testing.
  5. Exit strategy
    The insurer should present to the IA an exit strategy for the pilot run if it has to be terminated without success. The Sandbox is not a means to bypass applicable and related supervisory requirements.
  6. Other relevant considerations
    The IA does not intend to define parameters for the above principles and to stipulate an exhaustive list of supervisory requirements that may potentially be relaxed within the Sandbox framework. These are subject to the nature and application of each Insurtech initiative and will be discussed on a case-by-case basis.

The IA will refine the above arrangements over time in light of implementation experience and industry development.

What are the benefits of the Sandbox?

The Sandbox would be beneficial to the insurance industry. Insurers testing new Insurtech initiatives under the Sandbox can gain real market data and information of user experience in a controlled environment before launching them into the market. At the same time, the Sandbox would provide inputs to the IA for refining its supervisory requirements, taking into account the latest technological applications by the insurance industry.

How to learn more about the Sandbox?

For enquiries, please write to the Insurtech Facilitation Team by emailing to [email protected] or call Erwin Chak (2153 2736) / Bill Li (2153 2735).

The IA, the Hong Kong Monetary Authority ("HKMA") and the Securities and Futures Commission ("SFC") have launched their respective sandboxes. If a firm intends to conduct a pilot trial of a cross-sector Fintech product, it may apply to seek access to the sandbox it considers most relevant. The regulator will act as the primary point of contact and assist in liaising with the other regulators for the firm to access the sandboxes concurrently. Please click on the links to learn more about sandboxes operated by the HKMA and the SFC.


Fast track for applications for authorizations of new insurers owning and operating solely digital distribution channels ("Fast Track")

The IA launched a pilot scheme Fast Track on 29 September 2017 to expedite applications for new authorization to carry on insurance business in or from Hong Kong using solely digital distribution channels as a means to promote the development of Insurtech in Hong Kong.

What is the Fast Track about?

The Fast Track provides a dedicated queue (i.e. an expedited and streamlined process compared with other insurance licence applications) for new authorization applications from applicants which would own and operate solely digital distribution channels, without the use of any conventional channels involving agents, banks or brokers.

Who can apply under the Fast Track?

Insurers under the Fast Track must have an innovative and robust business model using digital distribution to bring benefits to the consumers in Hong Kong in product development, delivery, customer service and cost efficiency.

Insurers under the Fast Track would not be allowed to accept business from any channels other than its own proprietary digital distribution system.

How are policy holders' interests protected?

To ensure that the interests of policy holders would not be adversely affected, the following principles will be adopted for the Fast Track:

  1. All solvency, capital, and local asset requirements, which are set for ensuring sufficient loss absorption capability of authorized insurers must be met. All other requirements under the relevant guidelines should apply, except where the IA agrees to exempt or modify after due consideration.
  2. All policy holder protection measures should remain intact, except for those that are not applicable to the case of direct digital sales.
  3. As not all insurance products are suitable to be sold online, the IA will impose certain restrictions or conditions on the products that can be sold online. 
  4. As far as long term business is concerned, to ensure that there is adequate insurance experience among the shareholder controllers, at least one of the shareholder controllers should be an insurer (or the subsidiary or affiliate of an insurer) authorized to carry on the relevant insurance business in Hong Kong or a jurisdiction having information exchange arrangement with the IA.

Is there a deadline for application under the Fast Track?

The Fast Track operates as a pilot scheme and there is no specific deadline of application under it. Nevertheless, the IA will closely monitor the operation of the Fast Track and may revise it in light of implementation experience and industry development.

How to learn more about the Fast Track?

For enquiries, please write to the Insurtech Facilitation Team by emailing to [email protected] or call Freddy Pang (2867 2691) for long term business and Vivian Lai (2867 3225) for general business.


Insurtech Facilitation Team

The IA has established the Insurtech Facilitation Team to enhance the communication with business involved in the development and application of Insurtech in Hong Kong, as well as to promote Hong Kong as an Insurtech hub in Asia.

The Team will facilitate the Insurtech community's understanding of the current regulatory regime, act as a platform for exchanging ideas of innovative Insurtech initiatives among key stakeholders, and provide advice on Insurtech-related topics as appropriate.

To promote a closer dialogue between the Insurtech Facilitation Team and the market participants and interested parties, a dedicated email account has been set up. If you have any Insurtech proposal or wish to better understand the regulatory landscape for the insurance sector in Hong Kong, please contact us by emailing to [email protected].


Working Group on Embracing Fintech in Hong Kong under Future Task Force

The Future Task Force ("FTF") of the Insurance Industry has been set up to explore the future of the insurance sector and draw up recommendations. Out of the three working groups under the FTF, the “Embracing Fintech in Hong Kong” working group focuses on promoting the application of Fintech in the insurance industry. Click here for more details.