Distribution Trends in the Asian Insurance Market

by Wenli Yuan, June 30, 2010
Industry Trends
Asia-Pacific

Abstract

The distribution channels for the insurance market in Asian countries are diversifying.

Life insurance companies in many Asian markets have always depended on individual agents as their main sales channel. However, the market share of this channel is decreasing, while that of banks is growing every year. Asian insurance companies are moving away from a sales model that is built around agents, developing a diverse model that encompasses various channels such as agents, banks, direct sales, and financial advisers. Celent examines this in a new report, Distribution Trends in the Asian Insurance Market.

Although the level of development of bancassurance varies with different countries and regions in Asia, insurance sales through the banking network are becoming a common trend. In some Asian markets, the premium income for new life insurance businesses generated via banks has exceeded the traditional model of selling via individual agents.

“In some Asian markets, telemarketing has become the next big thing after the selling of insurance through banks,” says Wenli Yuan, Senior Analyst with Celent’s Asian Financial Services Group and author of the report. “A growing number of insurance companies in Asia are collaborating with organizations with huge customer databases, such as banks and public utilities departments, to reach out to their customers through database marketing. Simple and lowpremium insurance products such as household property insurance, accident insurance, and health insurance are promoted through this channel.”

Besides insurance-linked factors such as the maturity of the insurance market, customers' preferences for special insurance products, staff quality, market competition, and different pricing policies for different channels, the market share of the distribution channels is also influenced by factors such as the local economy, the culture, and the banking sector, as well as the regulation of the financial sector. Although Asian insurance distribution channels are diversifying, the potential share of each channel varies greatly based on the market.

In addition to providing an overview of general trends, this report looks at distribution channels in mainland China, Hong Kong, Taiwan, Singapore, Malaysia, Japan, South Korea, and India.

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

3

Overview of Distribution Channels in the Asian Insurance Market

5

 

Individual Agents

5

 

Bancassurance

7

 

Brokers / Independent Financial Advisers

10

 

Telemarketing and Internet Sales

11

 

Noninsurance Factors Influencing the Market Share of Insurance Distribution Channels

12

Mainland China

13

 

Size of Distribution Channels

14

 

Premium Income and Market Share of Distribution Channels

16

 

Cost of Distribution Channels

18

Hong Kong

20

Taiwan

24

 

Distribution Channels for Life Insurance

24

 

Distribution Channels for P&C Insurance

24

Singapore

29

 

Distribution Channels for Life Insurance

29

 

Distribution Channels for P&C Insurance

32

Malaysia

33

 

Distribution Channels for Life Insurance

33

 

Distribution Channels for Takaful Insurance

35

 

Distribution Channels for P&C Insurance

37

Japan

39

 

Distribution Channels for Life Insurance

39

 

Distribution Channels for P&C Insurance

41

South Korea

43

 

Distribution Channels for Life Insurance

43

 

Distribution Channels for P&C Insurance

45

India

49

 

Distribution Channels for Life Insurance

49

 

Distribution Channels for P&C Insurance

53

Conclusion

54

Leveraging Celent’s Expertise

56

 

Support for Financial Institutions

56

 

Support for Vendors

56

Related Celent Research

57

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