OneDegree, a Hong Kong-based online insurance startup, said it has closed a Series A funding round, led by major insurers and technology firms.
Under the arrangement, OneDegree will initially get HK$100 million in funds, followed by another HK$100 million later pending approval of its digital insurer license application from the Hong Kong Insurance Authority.
The funds will be used for technology development, marketing and product development, and as insurance reserve.
OneDegree plans to launch its product within this year. The longer term plan is to expand outside Hong Kong in 3-5 years.
Established in 2016, OneDegree’s platform allows customers to buy and manage their policies online, either through computers or smartphones, without the need to consult with an agent.
The startup will begin with medical insurance plans for pets.
OneDegree noted that there were about half a million pet dogs and cats in Hong Kong in 2016, and that only 2-3 percent of them had been covered by insurance.
Co-founder Alvin Kwok, a former JPMorgan banker, told the Hong Kong Economic Journal that traditional insurance firms have rather complex sales and claims procedures. Given the high costs involved, it’s difficult for them to offer products in niche segments like pet insurance.
In the US and Europe, some online insurers are applying artificial intelligence technology to simplify the process, leading to a situation where it would take just 15-20 people to operate such platforms.