According to EY's 2019 Asia-Pacific Insurance Outlook, that distribution is up for a major overhaul is not lost on life insurers.
Agencies and, more recently, bancassurance have been the traditional channels for life insurance growth. However, rapidly evolving customer behaviours and digitisation of customer access have led several insurers to go digital at a much faster pace than in other regions.
Nonetheless, traditional channels will continue to drive a major portion of life insurance sales in the years to come, commanding strong customer connections and dictating the margins for the overall business. Thus, insurers must work on enhancing the ability of traditional distributors to address the emerging needs of emerging customer segments.
Related: No evidence yet that tech firms can disrupt life insurance sector - AIA Group Chief Executive
Digitally enabling or digitising agency and bancassurance channels and integrating them efficiently with the rest of the business are imperative. The winners will be those insurers that offer the ability to seamlessly move from the transparency of online experiences to the context of personal, offline distribution.
The integration of health products in the life insurance ecosystem also points to the need to master the distribution mix.
The bottom line: insurers should embrace digital, but also need to create benefits and efficiencies for traditional agency and bancassurance channels. These channels must be digitally enabled, rather than completely taken over by direct digital channels.
The “2019 Asia-Pacific Insurance Outlook: What should insurers do today to prepare for tomorrow?” report also states that the Asia-Pacific region holds the key to the insurance industry’s future.
Insurers across Asia-Pacific are experimenting widely to capitalise on near-term opportunities and drive the industries long-term growth.
Final Sprint: For whom are you doing it for?
Against a backdrop of weak global insurance sector growth, rising incomes and expanding populations have benefited the region’s life insurers, while the non-life sector has seen strong growth fuelled by overall economic growth in key markets.
Jonathan Zhao, EY Asia-Pacific Insurance Leader says: “Markets across Asia-Pacific, in particular China, will continue to influence the future of insurance because of their intense focus on innovation and disruption. From product design to distribution and technology adoption, insurers in the region continue to experiment to capitalize on the near-term opportunities and drive the industry’s long-term growth.”
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