Indonesians still prefer a more traditional method of buying insurance, according to an Indonesian Financial Services Authority (OJK) survey.
The survey carried out by the OJK saw that the distribution channel was dominated by branch or sales offices of insurance companies, claiming a big chunk of the distribution pie.
Mr Paul-Henri Rastoul, CEO of AXA Financial Indonesia, commented: “The survey told us that the majority of people in Indonesia prefer having face-to-face briefings, to help them make a decision to buy. It lets them look into the options available to them, with a knowledgeable expert guiding them to the best solution that fits their purposes.”
He also noted that as a country with a youthful population, the best results would come from a similarly young agent or salesperson. “Indonesia is a young, growing nation rooted in tradition and history. It is reflected in everything, from the skyline of Jakarta to how people buy insurance.”
Bancassurance is growing fast
The Life Insurance Association of Indonesia (AAJI)’s own reports showed that new premium collected in 1Q 2017 was mainly shared between bancassurance (38%) and agency force (37%). Telemarketing also recorded significant growth this year, at around 10%.
“Bancassurance is growing faster than the agency force. But I don’t foresee a big gap happening between the two and they will remain in balance,” he said.
Digital channel gaining traction
That is not to say that the digital channel is completely irrelevant for life insurers. Social media outreach and various mobile apps serve as an initial stepping stone for most potential customers. Further, social media platforms such as Facebook and Twitter still serve as an important contact point for the increasingly mobile Indonesian.
AXA Indonesia became the first insurer in Southeast Asia to set up a social media command centre in 2015, to handle the growing volume of questions from their various feeds and to interact with customers in real-time. This was a move that was quickly adopted by other insurers, not just within Indonesia, but around the region.
This is an excerpt from Asia Insurance Review’s Indonesia Country Profile. AIR subscribers can read the full article here: Growth is still the buzzword.
Subscribe here to get AgentsWIN delivered to your inbox weekly. Free!