Life insurance aggregators are popular in Europe and the US. Hong Kong is lagging, but The Insurance Mole is digging into this rich stream of (hopefully) profits. NexChange goes one on one with founder Brandon Hui.
NexChange speaks to Brandon Hui, insurance executive and founder of The Insurance Mole, Hong Kong’s first auto-quote platform connecting people to life insurance premium quotes. You may live somewhere where these are common and you’re asking, “What took Hong Kong so long?!” If you live in Hong Kong, you may be saying, “Finally!” or “Whaaaaaa?!” We speak to the man behind the Mole.
He’s the man, but his company, Groveland Financial Services Limited, is the engine behind The Insurance Mole, making it a bit of a O2O (online to offline) operation.
Brandon, thanks for talking to us. Quick hit: What is the Mole digging for?
When you give us your birthdate, sex, smoking status, and face amount [ed. death benefit you want to be paid out], The Insurance Mole digs through the premium quoting tools of various life insurance companies, like Manulife, AIA, AXA, Liberty, Zurich, Transamerica, etc., and lists out these premium quotations for you, INSTANTLY!
Whoa, ‘instantly’! Got it. But not to Hong Kong, compared to other places. I’ve heard this is big in Europe and the US. Why hasn’t it taken off here? Why is the field still clear for you to be number 1?
You’re right! Life insurance aggregators like us [ed note: sites consolidating premium quotations from different insurance companies] are quite common in Europe, and is also a common method for clients to search for their premiums online, in Canada and the USA. The reason that aggregators are not popular because the insurance industry in Hong Kong is still 15-20 years behind compared to mature markets like the UK, North America, Australia, and the rest of the developed world.
How do you know?
One glaring indicator is the number of insurance agents in Hong Kong. Insurance companies in emerging markets like China and Vietnam, understandably start off by building large teams of insurance agents who generally only sell the products of 1 insurance company, so, for example Manulife agents employed by Manulife and only sell Manulife products. But as markets mature, the agency channel tends to shrink as clients become more knowledgeable about insurance, and want more choice. Brokers and bank distribution channels significantly tend to take over. And in Hong Kong, there are still a lot of insurance agents – 62,362 insurance agents, as of Dec 31, 2016), although the agency market share has been shrinking in recent years.
Aren’t you a threat to big company brokers, who might not appreciate you undercutting them and putting them out of business? Won’t they get angry with their company for cooperating with you?
In the end, Groveland FInancial Services Limited is an insurance broker, and we are one of the channels for insurance companies to get their products into the hands of the consumer. Life Insurance Companies have made it a policy to standardize the pricing of their products across their various distribution channels including agents, brokers, and banks, to alleviate any pressures or risks of undercutting. In fact, it is illegal to give a discount on long-term life insurance products. True, it is not easy to sign a distribution contract with an insurance company, but at Groveland, we have direct contracts with over 60 different insurance companies, and so we have one of the broadest product offerings in Hong Kong, for any channels.
Where do you make your money? What’s the revenue model?
If The Insurance Mole was just a website, then we would not be able to access the insurance company premium quotation software, we would not be able to solicit clients, and we wouldn’t be able to talk to clients about insurance company products. Luckily, the engine behind The Insurance Mole is Groveland, which is a fully licensed insurance broker firm and member of the Professional Insurance Brokers Association [PIBA].
As with all insurance broker firms in Hong Kong, a commission is paid to Groveland upon the sale of the insurance policy. Window shopping at The Insurance Mole is a free process. If our client eventually decides to purchase a life insurance policy through Groveland, the premium quoted is the exact same premium that is offered by other distribution channels like insurance agents or bank channels.
And you charge extra fees?
That’s one of the most common myths about insurance brokers. Let me be clear: No, there is no additional fee that we charge because we offer more product options. The insurance policy premiums are standard for all sales channels.
What regulatory barriers have your faced? How did you overcome them?
For The Insurance Mole, the regulatory barriers are addressed by being affiliated with a fully licensed insurance broker firm – Groveland – and registered as a member with PIBA. From the beginning we have direct distribution contracts with all of the insurance companies that we quote from, which gives us the authority to present these premium quotations to our clients.
What do you think are going to be the biggest hurdles to sales? Regulatory barriers? Will people buy online?
Education. Education. Education. Life insurance aggregators are a new concept in Hong Kong, and across Asia, so it will take some time for consumers to know that The Insurance Mole exists. However, the trend is on our side, as we know that more and more people are searching for information about life insurance online, and the younger generation is a keen demographic that will grow to rely on life insurance aggregators to get their information. As such, we have invested heavily not only on the website, but various social media platforms to spread the word.
What are you going to do when the competitors, maybe even your suppliers, come on the scene?
It is only a matter of time for other brokers to join the FinTech wave and come up with their own life insurance aggregator sites. And you’re right, in UK and North America, even the insurance companies themselves have tested the waters of offering their products directly to the consumers via the own website, or through a separately branded website. How do we compete against life insurers going online? Easy – deep down clients still want to buy through brokers who can be independent and offer then an array of choices, while life insurance companies will continue to offer their own singular product. So it is a matter of educating the public about these important differences.
That’s how you handle the big boys. How about other independent brokers like you?
Not as easy – Groveland will need to distinguish and prove ourselves on service, as well as the breadth of product offerings – over 60 insurance companies in our case, and our holistic approach of being able to offer life insurance, general insurance – you know, home, travel, auto, business, etc – medical insurance, and investments like MPF [Hong Kong’s mandatory pension savings plan] savings plans, education savings and more.
Brandon, thanks for speaking to NexChange and good luck!
Founder, The Insurance Mole
Director & CEO, Groveland Financial Services Limited
Brandon Hui was born and raised in Vancouver, British Columbia, Canada, and received his Bachelors of Commerce from Queen’s University, in Kingston, Ontario. He is a Canadian Chartered Professional Accountant (CPA) and Chartered Accountant (CA) due to years working at PricewaterhouseCoopers LLP in Toronto. It was a job posting with Manulife’s Regional Controllers group that gave him the opportunity to move to Hong Kong for work, and to eventually start his own insurance brokerage firm in 2012, Groveland Financial Services Limited. Brandon lives between Hong Kong and Vancouver, where he is also involved with the family business, Park Georgia Insurance Agencies, which has 60 staff and 150 brokers across the Greater Vancouver Region.
Photo: Insurance Mole