3. What should I be aware of when I consider obtaining an insurance policy from a virtual insurer, or to use Insurtech to deal with insurance-related matter?
Even though utilization of technology in the insurance sector brings tremendous benefits, you should be careful of the following:
As a rule of thumb, insurance products with simple features are suitable for buying and selling via a virtual insurer; On the other hand, if the insurance product of which you are considering is complex or involves a substantial and long-term commitment (e.g. a product with a long premium payment period, or with advanced features such as different payout options), you may want to purchase such products via an insurance intermediary who can explain the details of the insurance policy to you and assist you in handling matters in relation to the insurance policy.
Typically, if you choose to buy insurance policies from a virtual insurer, no insurance intermediary would explain the features of the insurance product and give you advice on whether such insurance product is suitable for you having regard to your financial conditions and insurance needs. Hence you should make sure that you have read through and understand the terms and conditions of the insurance policy, including the insurance coverage and the existence of exclusion clauses. You should also be aware of the risks associated with the insurance policy, e.g. the surrender charge which can cause substantial loss if you fail to pay premiums on time. If you do not understand any part of the policy, you should consult representatives from the virtual insurer, or consider obtaining an advice from an insurance intermediary.
Moreover, cybersecurity is a major concern for virtual insurers and other application of Insurtech with heavy reliance on the Internet. To this end, the Insurance Authority has a Guideline on Cybersecurity and all insurance companies, including virtual insurers, must comply with at all times. You should also strive to protect yourself against cyber risks when obtaining insurance policies via Internet or using online services provided by insurance company, e.g. to use private network connection and keep your passwords strictly confidential.
Also, the use of technology in our modern society causes a grave concern on privacy and personal data, and Insurtech has no escape from it. In Hong Kong, all personal data collected by insurance companies are under the protection of the Personal Data (Privacy) Ordinance (Cap. 486). You should pay attention to how your personal data collected by insurance company is handled, for instance you should read carefully the Personal Information Collection Statement (“PICS”) which would list out for what purpose(s) can the insurance company use your personal data. When using a mobile application developed by an insurance company, you should check the privacy settings and what permissions are granted to this application.