On the life insurance market, insurers are investing heavily in online channels, but mainly for branding, while their means of existence is offline channels by communicating directly with agents and guests.
Survey of Nielsen Company (US) on customer awareness of life insurance (customers who have been and are expecting to buy life insurance products) showed that information customers gathered about life insurance companies mainly came from offline channels (word of mouth from friends, relatives, and insurance agents).
Specifically, among more than 400 surveyed customers, the channels which are most known by customers and most influenced their decisions to buy insurance products included agents (above 80 percent) and bancassurance (nearly 80 percent), while the proportion of buying insurance via only channel was significantly lower (nearly 30 percent).
These numbers are also fairly similar to the result of nearly 80 percent new insurance premium revenue of insurance companies (excluding those that sell insurance through banks only) coming from agent channel.
“For a long time, traditional channel has still been the main channel and we will continue to promote this channel in the near future. In addition, we will find more opportunities to cooperate with banks to stronger carry out bancassurance channel,” said Back Jong Kook, Chair of the Board of Members cum general directors of Hanwha Life Vietnam.
In addition to agent, general agent and bancassurance channels, Hanwha Life Vietnam is one of the pioneers selling insurance on television (through TVhome shopping programme, one of the online selling forms). Nevertheless, Hanwha Life Vietnam attaches importance to collecting new premium revenue from this channel.
“The main purpose of selling insurance on television is to promote the company’s names and image to customers with good and stable income. We have temporarily suspended communication through this channel after two years of implementation because we have achieved the set target,” said Hanwha Life Vietnam’s representative.
In South Korea, television is most chosen by insurance companies to promote their products. However, as it only serves a certain group of customers, the revenue is modest and it is used as a means of communications. It is known that 80 percent of the new premium revenue of Hanwha Life Vietnam so far comes from agents (including general agent offices), and 20 percent comes from other channels such as independent corporate agents, bancassurance, etc.
In addition to traditional channel, in the recent time, the online sales channels have been actively deployed by life insurers. However, products sold through this channel are mainly simple insurance product and sales revenue are not focused.
“The potential from customers of Commercial Joint Stock Bank for Investment and Development of Vietnam (BIDV) is very huge. BIDV Metlife has also developed online channel but on at piloting stage,” said Gaurav Sharma, general director of BIDV Met Life.
In fact, despite being promoted, the mission of online insurance is to bring new experiences to customers, but not yet a main business channel. Because in some developed life insurance markets, the new insurance revenue from this channel remains very modest.
Talking to Bao Dau tu Chung khoan, CEO of a life insurance company said that the insurance products being sold online are not really life insurance but merely simple health care and death insurance. If it is a true life insurance product and for the long term, it cannot be sold through online channel at the present time due to the complexity and the need for direct interaction between consultants and customers.
“For non-line insurance, the demand for health care insurance or motor vehicle insurance is natural and customers voluntarily participate. However, the demand for buying life insurance products is mostly created through counselling. Therefore, the role of insurance agent is very important, etc.,” said the CEO.
