The slow sales of direct purchase insurance (DPI) — a category of simple life policies sold without commissions and financial advice — is an underestimation of the real customer interest in such products, FWD Singapore’s chief executive Abhishek Bhatia said.
Holding consumers back is the lack of a seamless experience to view and buy DPI policies online, he said. Currently, while interested consumers can view and compare these products online, most insurers still require them to make their purchases in person.
“I don’t think the current offerings are doing justice to the intent of the regulator who started this initiative. Customers would tell you they want to buy online … but in most cases, customers are asked to leave his name and number, and someone is supposed to get in touch with him,” Mr Bhatia told TODAY in an interview.
“Customers also complained about … the length of the forms and the amount of time taken to actually go through it. So my sense is there is interest in DPI but not all of that is translated into sales,” he added.
DPI made its market debut in April last year as an option for consumers to meet their basic protection needs without incurring commissions. A Web portal compareFIRST was also launched to allow consumers to compare premiums and features of similar life insurance products, including DPI, offered by different insurance companies.
However, the take-up of DPI policies has been glacial. According to the Life Insurance Association, a total of 435 DPI policies were sold and drew about S$371,000 of weighted new premiums for the first half of this year. Since the launch on April 7, 2015, 1,081 DPI policies have been purchased as of June this year.
FWD Singapore, which sells insurance directly to consumers through its website, will put its first term life policies on the compareFIRST portal today.
The products — available in terms of 5-year renewable, 20-year and up to age 65 — were put up for sale on the company’s website last weekend, and it has sold “a few policies”, said Mr Bhatia.
The company, a newcomer in the local insurance scene with a business model that does away with middlemen, launched its motor and travel offerings earlier this month. Its selling point includes a simplified purchase process that gives consumers a quote in less than a minute.
Selling life insurance products can be more complicated as the company has to gather health-related information from consumers before generating a quote, but Mr Bhatia said the experience would still be “comparable” to buying its car and travel insurance.
“Instead of picking up a hardcopy application form and converting it into an online version, we opted for smart underwriting. What that means is the questions that will be asked of you depend on your answers: If you answer ‘yes’ to a particular condition or disease, the next question will be asked based on that; if it’s a ‘no’, another question will be asked, it’s a logic tree,” he said. LEE YEN NEE
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