Nothing traditional about this Bowtie

Fred Ngan and Michael Chan
BMath degrees, actuarial experience and a love of technology drove these founders to flip the insurance model.

For nearly 20 years, Hong Kong hadn’t issued a license for a new life insurance company. In 2018, a new company with nontraditional ideas founded by Fred Ngan (BMath ’07) and Michael Chan (BMath ’08) received a new license.

Bowtie isn’t Fred and Michael’s first start-up. Together, they have founded two, and in Fred’s first co-op term at the University of Waterloo he started his own business developing a website to feature 30-40 Chinese-owned small businesses in Toronto.

The idea for Bowtie was born in 2015. Fred and Michael had been in the insurance industry for more than 10 years in Canada, the United States and Hong Kong. They saw that the industry needed to embrace technology, better educate the public about what kind of insurance they need, and make the process easier and friendlier.

Creating change in an industry dominated by big companies is difficult. It inspired engineering talent from local and Silicon Valley technology start-ups, as well as industry leaders including former C-suite executives from major insurance companies to join Bowtie to be part of the positive change the company was developing. They also had the backing of Sun Life Financial, a trusted company operating in Hong Kong for more than 126 years.

“It’s quite interesting that a company like that partnered with a local start-up,” said Michael. “They placed a lot of trust in us. This made a huge impact in our ability to get the license.”

In the insurance industry, customers are sold insurance by agents as opposed to customers shopping and buying insurance products. In the last couple of years, Hong Kong’s Insurance Authority has been looking to facilitate industry development and to do more social good. This provided a great environment in which Bowtie could develop their company.

With a completely online digital experience, it’s economical for Bowtie to distribute medical insurance policies. The company is targeting tech-savvy, well-educated 25-45 year-olds who use mobile for basically everything. It will also provide protection to an underserved community who cannot currently afford many insurance products.

“Traditionally, the most affordable insurance and simple products with high protection are not widely sold by agents because of the low commission,” said Fred. “The way the distribution has been structured made it difficult to sell those products. We’re hoping to reach a segment of people who historically have not been targeted through traditional channels.”

In addition to their digital platform, Bowtie has invested heavily in customer service. They have hired medical doctors to not only help develop the underwriting engine, but also to provide consultation services to end customers.

Fred and Michael wanted to flip the insurance model. They gained the experience, brought together the right people and built the technology. It’s the mentality that they say they witnessed at the University of Waterloo.

“The mentality at Waterloo is that if you want to do something, you make it happen,” said Fred.

It’s why they hire co-op students from Waterloo today, and look for graduates from the math and computer science programs as the company continues to grow.

“We’re not traditional,” said Michael. “The name Bowtie is not the name of a traditional insurance company. We’re young, fun, and changing the way people buy insurance.”