Bowtie Life Insurance, Hong Kong’s first virtual insurer, has raised US$70 million in its series C funding round.

The round was led by existing shareholder Sun Life, which has increased its stake.

Founded in 2018, Bowtie operates entirely online but also runs physical health clinics and a customer service center in Wan Chai.

The company plans to use the new funds to integrate AI, improve customer services, and expand its clinics and workforce.

Bowtie currently has around 170 staff and expects an annual headcount growth of 10% to 15%.

Bowtie raised US$30 million in 2018 and received investment from Japan’s Mitsui Group in 2022. The company has provided US$16 billion in coverage to 200,000 customers and reached US$80 million in annual recurring revenue as of May.

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🔗 Source: South China Morning Post

🧠 Food for thought

1️⃣ Virtual insurance pioneers address Hong Kong’s protection gap

Bowtie’s success represents a significant shift in Hong Kong’s insurance landscape, where nearly half the population lacks adequate health coverage despite the city being a major financial hub.

The company has captured 5% of new Voluntary Health Insurance Scheme policies since its founding, adding approximately 1,000 new customers monthly through its direct-to-consumer digital model 1.

This $70 million funding round builds on Bowtie’s growth trajectory from its initial $30 million Series A in 2018, when it became Hong Kong’s first virtual insurer and the first new life insurance company in Hong Kong in nearly 20 years 23.

Bowtie’s hybrid approach, combining online services with physical health clinics and a customer service café, demonstrates how insurtech companies are evolving beyond pure digital plays to create more comprehensive customer experiences.

The company’s critical illness insurance product has seen over 100% growth, showing strong market adoption of its digital-first insurance model in a traditionally agent-dominated market 1.

2️⃣ Traditional insurers embrace strategic investments in digital challengers

Sun Life’s consistent investment across all three of Bowtie’s funding rounds reveals a strategic approach to digital transformation that’s becoming common among established insurers.

After this transaction, Sun Life will own more than 50% stake in Bowtie, showing a deliberate strategy of gaining digital capabilities through investment rather than building them internally from scratch 1.

This partnership model addresses a key challenge highlighted by industry experts—that digital transformation in insurance is fundamentally a people and culture challenge, not just a technological one, with an estimated $148 billion to be invested in insurance digital transformation by 2025 4.

The collaboration between Sun Life and Bowtie exemplifies how traditional insurers and virtual players can complement each other, combining Sun Life’s deep insurance expertise with Bowtie’s technological innovation 5.

This approach aligns with broader industry trends where incumbents seek to accelerate their digital evolution through partnerships, investments, and acquisitions of insurtech startups rather than competing directly.

3️⃣ Regulatory innovation creates fertile ground for insurtech growth

Hong Kong’s supportive regulatory environment has been crucial for virtual insurers, with the Insurance Authority implementing a “fast track” authorization process that attracted over 40 applicants when initially launched 26.

Since 2019, Hong Kong regulators have allowed eight digital banks and five virtual insurance companies to operate, creating one of Asia’s most progressive regulatory environments for financial innovation.

The timing of Bowtie’s funding coincides with regulatory initiatives to enhance cross-border insurance capabilities within the Greater Bay Area, potentially opening new market opportunities for digital insurers 6.

Hong Kong’s adoption of a risk-based capital regime aims to align with international standards, creating a stable yet innovation-friendly environment that has helped position the city as a premier insurance hub in the region 6.

This regulatory support has contributed to Hong Kong becoming what Bowtie’s founder describes as “a leader in terms of digital insurance development,” demonstrating how thoughtful regulation can accelerate industry transformation.

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