Distribution in Asia: life and health insurance channel and product preferences
Savvy customers, staunch competition and regulatory focus pose challenges to insurers in the Asia region. Swiss Re and LIMRA sponsored a consumer survey to find out what customers in a dozen Asia markets want.
Asia is the fastest growing life insurance region in the world. Over the last decade, life insurance premiums increased by an average of 5.7% per annum, compared to 4.3% for the world as a whole. However, insurers are challenged by increasingly empowered customers, the proliferation of channel choices and a regulatory focus on sales practices. As a result, understanding consumer preferences and attitudes is becoming increasingly important, particularly in terms of which channel they prefer to collect information from and to make purchases.
Having a better understanding of the preferences of these different consumer segments across the region will help the insurance industry to better address the protection gap and provide a more relevant service to customers.
About the survey
Swiss Re and LIMRA commissioned a regional consumer survey to gauge consumers’ preference for life and health insurance products and distribution channels. The survey also investigates the segment of the consumer population that our industry is not reaching – those who have never considered buying insurance. The survey covered over 6,000 respondents from 12 Asian markets: China, Hong Kong, India, Indonesia, Japan, Malaysia, the Philippines, Singapore, South Korea, Taiwan, Thailand, and Vietnam.
Opportunity to increase insurance penetration with large proportion still shopping
According to the survey, about 60% of those consumers who have researched life and health insurance products say that they went on to make a purchase. Yet around one third say that they are still “shopping” and that they are yet to make a decision to purchase. These “shoppers” constitute a large segment in some markets and converting them into buyers represents a huge opportunity to increase insurance penetration. In comparison, only a small portion decided not to purchase.
Product complexity and cost consideration are major reasons for dropouts
Around 17% of the respondents are not interested in insurance. They are put off mainly by the perceived complexity in insurance products and the purchase process. In comparison, most prospective buyers (who have started to research insurance) dropped out due to cost considerations. Most who decided not to purchase dropped out early either during initial research or upon receiving more information. A key reason is cost: insurance is often perceived to be expensive and not good value for money. Educating consumers on the value of insurance will help to overcome this challenge.
 Source: Swiss Re, sigma No 03/2014.
Published February 2015
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