OneDegree Celebrates 4th Anniversary: Hong Kong’s Highest-Grossing Virtual Insurer for Two Consecutive Years, Plus Significant Improvement on Finance Performance by 40% in 2023

Virtual insurer OneDegree is celebrating its 4th anniversary having achieved multifaceted business growth following a successful Series B financing round in June 2023 that raised US$55 million. Since launching in April 2020, the company has continued to further our goals to leveraging technology to provide the Hong Kong market with simple, fast, and convenient insurance experiences. By embracing digitalization, OneDegree has also been able to realize cost savings, which has allowed the company to enhance insurance coverage for customers. These efforts have yielded remarkable results, as OneDegree retained its position as Hong Kong’s highest-grossing virtual insurer in 2023 with 59% year-over-year growth in gross written premiums to exceed HK$180 million. OneDegree has thus secured the top spot among Hong Kong’s four digital insurers for the second consecutive year1.

OneDegree: 2023 Performance Highlights

• Gross written premiums exceeded HK$180 million, representing a remarkable 59% increase compared to 2022, solidifying OneDegree’s status as the highest-grossing provider1 among Hong Kong’s four virtual insurers for two consecutive years.
• Gross written premiums in 2023 represented a significant 20-fold increase compared to the company’s inaugural year in 2020.
• Financial performance experienced significant improvement of 40% in 2023, further progressing towards a sustainable profitable state.
• Operational efficiency continued to improve, with an 82% improvement in the cost-to-income ratio compared to 2022.
• The employee headcount in 2023 remained consistent with 2022 levels, while the average revenue per employee saw a noteworthy 78% year-over-year growth.
• Cross-selling efforts within OneDegree’s portfolio yielded successful results, with policyholders holding multiple products growing 2.5 times compared to 2022.
  

Emily Chow, Deputy Chief Executive of OneDegree, said, “It has been four years since we obtained our virtual insurance license in April 2020, yet we have already maintained our position as Hong Kong’s highest-grossing virtual insurer for two consecutive years. We have not only witnessed robust revenue growth but have also made continuous improvements in operational efficiency. In 2023, financial performance experienced significant improvement of 40%, establishing a solid foundation as we strive to achieve sustainable profitability. We are confident that OneDegree will be the first virtual insurer in the market to reach the break-even point.”

Chow further added, “Since acquiring our virtual insurance license in April 2020, we have swiftly established OneDegree’s leadership in the pet insurance market. Our subsequent fire insurance, with Hong Kong’s most competitive 0.038% premium rate and Best Price Guarantee2, has successfully disrupted the long-standing bank dominance through proactive market promotion efforts. Additionally, our home insurance offers a unique ‘Home Appliances Warranty’ rider that is rarely found elsewhere, and this rider spun off last year as a standalone insurance plan. Our critical illness insurance provides comprehensive protection and is the first in the market to allow an unlimited number of claims. As OneDegree enters its fifth year, we will prioritize enhancing the customer experience by upgrading our offerings and strengthening their competitiveness in the market.”

Strong Growth Continues Four Years After Launch of Pet Insurance with Comprehensive Coverage

OneDegree introduced its exclusive Pet CEO Plan in Hong Kong in April 2020, gaining significant market popularity. The offering has sustained robust growth, with gross written premiums increasing by 48% year-over-year in 2023. In March 2024, OneDegree conducted a pet spending survey, revealing that medical expenses ranked as pet owners’ second-highest spending category. The research also highlighted an alarming disparity of up to nine times between owners’ estimated costs for pet medical care and the actual expenses incurred.

OneDegree’s Pet CEO Plan provides comprehensive benefits addressing Hong Kong pet owners’ needs. Noteworthy features include unique “no sub-limit” coverage up to 90% reimbursement3, an annual limit up to  HK$80,000, and coverage for all cat and dog breeds aged 13 weeks to 11 years. It is also the only plan in Hong Kong with its own vet network. According to insurance comparison platform 10Life, OneDegree’s Pet CEO Plan receives the highest ratings among pet insurers, scoring 8.6 for overall rating, 8.6 for pet hospitalization coverage, and 8.7 for pet outpatient care.

In August 2023, OneDegree launched a promotional campaign featuring the micro movie “Cherish and Love with Time.” The video garnered over three million views, fuelling a 67%  sales surge compared to the same month in 2022.

Fire Insurance Disrupts Market Dominance Three Years After Launch, Achieving Nearly 90% Growth

OneDegree launched fire insurance in early 2021 with Hong Kong’s most competitive 0.038% premium rate and Best Price Guarantee2, embracing homeowners seeking affordable protection. The year-over-year growth in 2023 was impressive, with an 86.6% increase in gross written premiums and a 48.9% rise in total insured sums. As of 31 December 2023, its customer base multiplied 3.1 times from its inaugural year in 2021, resulting in an estimated HK$170 million in premium savings for its policyholders4.

In 2022, OneDegree conducted an extensive market survey, revealing that surveyed homeowners could save up to 90% annually by switching fire insurers. Through OneDegree’s proactive outreach efforts, more fire policyholders in the market became aware of their right to choose insurance providers. In response, fire insurers strategically adjusted their offerings by lowering rates or enhancing coverage to attract customers. This disruption of market dominance has directly benefited consumers, providing them with more competitive options.

Home Insurance Revenue Nearly Doubles, Thanks to Market Reception of Optional Coverage

OneDegree launched home insurance in June 2022 to further optimize household protection. The optional “Home Appliances Warranty” rider offers unique coverage, allowing repairs of an unlimited number of appliances across 14 major categories for the cost of a single appliance’s extended warranty. In November 2022, the home insurance expanded further to include popular optional riders “Landlord Protection” and “Building Structure.” These contributed to a remarkable 191.5% year-over-year growth in gross written premiums in 2023, along with a 30% increase in enrollments for the optional riders.

Home and fire insurance offer crucial protection against extreme weather, evident from the frequent severe typhoons and rainstorms battering Hong Kong in 2023. Through proactive marketing outreach, OneDegree Home Insurance recorded a momentous 15-fold daily sales spike versus average figures in the same month on the day before the 2023 black rainstorm event. This showed market recognition of pre-emptively securing properties against weather risks. OneDegree also proved effective in supporting policyholders, providing HK$280,000 to one claimant after flooding from the 2023 black rainstorm damaged entire furniture/appliance collections and possessions in the insured’s village home. The policy covered the necessary restoration and temporary accommodations. Despite paying this substantial claim and others, the home insurance solvency ratio still substantially improved 43% in 2023 thanks to strong premium growth.

Critical Illness Insurance Provides Comprehensive Family Protection While Achieving 25-Fold Boost in Operational Efficiency 

OneDegree launched critical illness insurance in late 2021 to offer families health security complementing existing pet, fire and home coverage. This increased cross-selling opportunities for deeper customer lifetime value. In 2023, critical illness insurance saw gross written premiums rise 26%, translating to a 25-time improvement in operational efficiency versus 2022 through successful cost optimization.

Customer Base Demonstrates Growing Age Diversity with Generation Y Accounting for Over Half of Customer Base

OneDegree’s virtual, agent-less model and streamlined insurance enrollment and claims processes have resonated strongly with younger customers. In 2023, individuals aged 18-35 comprised over half (51.7%) of OneDegree’s customer base, up from 42.3% at inception in 2020. Furthermore, the under-30 demographic continues to expand with 49.7% year-over-year growth in 2023. In 2023, this group represented 26.9% of the customer base compared to 18.9% in 2020.

Additionally, greater recognition of OneDegree’s fire and home insurance has attracted more senior customers, with the over-40 demographic seeing a notable 37% year-over-year increase in 2023.

Customer Satisfaction Shows Consistent Upward Trend with Outstanding 4.7 Google Rating 

Even four years after launching, OneDegree remains committed to enhancing the insurance experience through continual technology upgrades and simplifications. Customers are apparently satisfied with their OneDegree experience, reflected by an exceptional average Google rating of 4.7 from 188 reviews. In 2023, 90.7% of customers rated their experience with OneDegree’s customer service as “positive” or “neutral.” This satisfaction level has kept climbing, reaching an impressive 92.9% in the first quarter of 2024.

4th Anniversary Celebrated with Large-Scale “Adoption Day” and New “PawTogether Club” Program

According to the Agriculture, Fisheries and Conservation Department, pet adoption not only saves lives but also reduces the number of abandoned pets, providing them with the chance to become loving companions once again. Animals available for adoption usually have gentle temperaments and are often spayed or neutered to reduce potential health risks. Recognizing the importance of spreading multi-species animal love across Hong Kong, OneDegree is commemorating its 4th anniversary in April through the inaugural large-scale “Adoption Day: Boundless Love, Furever Homes” event. Hosted in collaboration with six animal rescue organizations, the event goes beyond cats and dogs to include turtles and tortoises searching for their forever homes.

In addition, OneDegree is inviting its pet insurance policyholders and their furry companions to join the new “PawTogether Club” program as pet ambassadors. This exclusive program serves to thank customers for their support while enabling OneDegree to better understand customer needs. Along with regular meetups, members will have opportunities to participate in focus groups and product trials, contributing to optimizing OneDegree’s offerings and services. Furthermore, customers can participate in product design by collaborating with OneDegree to develop the best insurance solutions.

Remarks:

1.      According to the Insurance Authority’s “Market and Industry Statistics,” the gross written premium of certain virtual insurance providers is calculated based on the Annual Premium Equivalent (APE).

2.      If a policyholder finds the same product at a lower price in the market, OneDegree will refund the difference. However, this only applies to fire insurance products with the same coverage and general terms as OneDegree Fire Insurance, and the price must be open to the public and does not include any discounts, deductions or waivers.

3.      For network clinics, the maximum reimbursement rate is 90%, while for non-network clinics, it is 70%. For all new policies issued from 1 December 2022, if the insured pet’s age is between 13 weeks to 11 months at enrollment, the reimbursement rate applies to all registered vets in Hong Kong for the full policy year.

4.      Calculated based on OneDegree’s current fire insurance customer database and the respective premium difference between OneDegree Fire Insurance (0.038% of sum insured) and their previous fire insurance from the mortgage bank, insuring for  a 30-year mortgage.