Direct life insurance sales growing
Life insurance policies sold direct to customers without the aid of a financial adviser continue to increase at a significant rate and will account for 40 per cent of new insurance business or $2 billion annually by 2021, according to a Plan For Life report.
That is up from 25 per cent in 2010-11, with increased consumer confidence in purchasing through channels such as the web and smart-phone technology credited with much of the increase.
The 'Direct Life Insurance in Australia: Racing Onto the Radar' report, written in conjunction with global management consultants Oliver Wyman, recommended insurers find new areas of focus to gain a competitive edge, such as channel integration, new media, segmentation of insurance propositions and "reclaiming the customer relationship".
"The reality is that life insurance remains largely sold rather than bought and successful players are using sophisticated marketing techniques to reach their clients," said Brad Clarke, report co-author and head of insurance strategy for Oliver Wyman in Sydney.
"Digital adoption and technology advances as well as scaled and remote forms have assisted and will continue to present opportunities. We expect many players however to continue to struggle to differentiate between what sounds like a great idea and one that will result in a sustainable business," he said.
The report said the main drivers impacting future growth will be:
- customer behaviour in adopting digital purchasing through channels such as social media, mobile internet and interactive tools;
- acceptance of direct insurance sales as a complement to adviser channels;
- increasing participation from "diversified financial institutions"; and
- growth of aggregators and other online advice and other new entrants from outside the traditional insurance arena.
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