Direct Insurance in South Korea: The Need for Customer Relevance

by KyongSun Kong, September 6, 2013
Industry Trends
Asia-Pacific

Abstract

Direct channel insurance sales in South Korea’s insurance industry remain small, but they are growing steadily. Direct channel insurance revenues from 2007 to 2011 in the life insurance sector have grown by a 7.5% CAGR, and in the nonlife insurance sector by a 19.7% CAGR.

Direct channel insurance sales in South Korea have yet to reach a significant level. In the life insurance industry, sales represent a meager 1.8% of the total, while in the nonlife insurance industry, sales are only 10.9%. In Direct Insurance in South Korea: The Need for Customer Relevance, Celent analyzes the use of direct channel sales among insurers as well its potential. This is accompanied by a detailed examination of direct channel sales and a sector analysis of salient characteristics and trends.

To facilitate the growth and development of direct channel sales, there are a number of challenges the insurance industry must overcome. Here are the five most pressing challenges:

  • Enhancing online channels.
  • Simplifying products.
  • Enhancing call centers.
  • Unifying direct channel management.
  • Battling credit card fees.

“Face-to-face sales have been the rule, as more than a few insurers have shut down their direct channel operations or scaled them back,” says KyongSun Kong, Analyst with Celent's Asian Financial Services Group and author of the report. “Nevertheless, diversification of sales channels remains essential for insurers looking to respond to customer needs.”

This report features an analysis of the available channels and provides a range of proposals for insurers considering enhancing their direct channel operations.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

Face-to-Face and Direct Channels

2

 

Life Insurance Industry Direct Channel Market

2

 

Non-Life Insurance Direct Channel Market

3

Telemarketing’s High Profile

5

Products Suitable for TV

9

Why the Internet Continues to Confound as a Sales Channel

12

 

Online Life Insurance Sales: Early Days of a New Era

12

 

Growing Sales of Online Life Insurance

13

Directions in Mobile Insurance

16

The Future of Direct Channel Sales

18

 

Enhancing Online Channel Sales

18

 

Simplifying Products

18

 

Enhanced Call Centers

19

 

Centralizing Direct Channel Management

19

 

Battle Over Credit Card Fees

19

Conclusion

21

Leveraging Celent’s Expertise

22

 

Support for Financial Institutions

22

 

Support for Vendors

22

Related Celent Research

23

Sign in to download reports and access personalized information