The distribution channels for the insurance market in Asian countries are diversifying, according to research released by Boston-based research and consulting firm
The report notes that life insurance companies in many Asian markets have previously depended on individual agents as their main sales channel. However, the market share of this channel is decreasing, while that of banks is growing every year. In its new report, “Distribution Trends in the Asian Insurance Market,” Celent says that Asian insurance companies are moving away from a sales model that is built around agents, developing a diverse model that encompasses various channels such as agents, banks, direct sales, and financial advisers.
Although the level of development of bancassurance varies with different countries and regions in Asia, insurance sales through the banking network are becoming a common trend. In some Asian markets, the premium income for new life insurance businesses generated via banks has exceeded the traditional model of selling via individual agents.
"In some Asian markets, telemarketing has become the next big thing after the selling of insurance through banks," says Wenli Yuan, senior analyst with Celent's Asian Financial Services Group and author of the report. "A growing number of insurance companies in Asia are collaborating with organizations with huge customer databases, such as banks and public utilities departments, to reach out to their customers through database marketing. Simple and low-premium insurance products such as household property insurance, accident insurance, and health insurance are promoted through this channel."
Besides insurance-linked factors such as the maturity of the insurance market, customers' preferences for special insurance products, staff quality, market competition, and different pricing policies for different channels, the market share of the distribution channels is also influenced by factors such as the local economy, the culture, and the banking sector, as well as the regulation of the financial sector. Although Asian insurance distribution channels are diversifying, the potential share of each channel varies greatly based on the market. In addition to providing an overview of general trends, the Celent report looks at distribution channels in mainland China, Hong Kong, Taiwan, Singapore, Malaysia, Japan, South Korea, and India.
