Direct Insurance in South Korea: The Need for Customer Relevance
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.