Distribution Trends in the Asian Insurance Market
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Asian insurance companies are moving away from a sales model that is built around agents towards developing a diverse model that encompasses various channels such as agents, banks, direct sales and financial advisers. Insurance agents from insurance companies still form the major sales channel for life insurance in many Asian countries and regions. But their market share has been gradually declining as banks are gaining more market share and catching up on them. Although the level of development of bancassurance varies with different countries and regions in Asia, insurance sales through the banking network is becoming a common trend. In some markets, the premium income for new life insurance businesses generated via banks has exceeded that of the traditional insurance model of selling via individual agents. In Celent report "Distribution Trends in the Asian Insurance Market" (Chinese version, English version coming soon), we analyzed various reasons for the rapid development of bancassurance, including:
- In Asia, bank revenue is mainly derived from interest income, and to raise profits, a huge sum of fee-based income has to be generated. Banks are very keen on selling insurance products because the processing fees can help generate income.
- Customers are more comfortable signing a contract with a bank than with an insurance agent because banks have a better reputation.
- Insurance companies are able to generate more premium income and expand their market share by selling their insurance products through banks. Moreover, the commission and management costs are lower than selling via individual agents.