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Avo Insurance gets virtual general insurance licence from Hong Kong Insurance Authority

Avo InsuranceAvo Insurance has been granted a virtual general insurance licence from Hong Kong’s Insurance Authority, the company said on Wednesday. This move is a part of Hong Kong’s wider push to encourage more use of technology.

Avo Insurance is a purely digital company. It will sell its products online without using any agents or brokers, which will also help the firm to keep costs down. The licence will allow the firm to sell a range of products including property, travel, fire and car insurance cover.

“Insurtech provides the opportunity for both consumers and the industry to improve the customer experience, enhance inclusiveness, build a sustainable fintech ecosystem, reduce the compliance burden and induce greater supervisory efficiency,” said Clement Cheung Wan-ching, chief executive of the Insurance Authority, according to media reports. He believes the virtual licences will help foster Hong Kong’s insurance technology, or insurtech, sector.

Avo is 51 percent owned by Asia Insurance, the general insurance arm of Hong Kong-listed Asia Financial Group, while the rest is owned by Zhang Lei, founder and chief executive of Hillhouse Capital. Hillhouse, which manages US$60 billion of assets, is an early investor in many technology firms including Tencent Holdings, Baidu and Didi Chuxing.

“Avo is a younger brand and more appealing to millennials and young professionals, while Asia Insurance is an established brand. The two will have different market positioning,” reports quoted Winnie Wong, chief executive of Avo and Asia Insurance, as saying.

“The above factors gave us strong reasons to establish a different company and brand to achieve the most desired outcome.”

Avo plans to use artificial intelligence and other new technologies to serve customers, for example using big data and deep learning to conduct more accurate risk profiling and pricing. This would enable it to pass on the cost savings to customers, Wong said.

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