This article was first published in the IIB Bulletin, Vol 2, Issue 1, pp4-5
https://iib.gov.in/IIB/Articles/IIB%20Bulletin%20Volume%202%20%20Issue%201%20Final.pdf
Prior to joining
LIMRA and LOMA, Watts was Global COO at ACE Life International, where he was
responsible for day-to-day operations and new business development. He has held
CEO positions in India and China for AIG and AIA and has extensive global
experience in the UK, EMEA and Latin America. Watts was educated at
Loughborough University College, earning a Business Education Council Diploma.
In a conversation
with Dr. Nupur
Pavan Bang of the Insurance Information Bureau of
India, Watts talks about research in the Life Insurance sector, in India and
globally.
In what way can the Life Insurance companies in India benefit from being associated with LIMRA and LOMA?
We can bring to the Indian Insurance market the global best
practices and also world class education and development programs. Insurance
companies in India still have a lot to achieve in terms of improvements in
distribution productivity and profitability. We can bring quality experiences
and proven systems from around the globe and help the situation here.
LIMRA does not do much
research on the Indian market.
Yes. The historical research is primarily US based. In the US, there
is decades of experience on trends. We can even track generation wise exposure
and experience. Many US research studies now include global data. But now,
strategically we will do more of international research, including surveys and
studies in India.
What would be the focus of
your research in India?
The focus in India is on Consumer trends and preferences with
regards to purchasing Insurance. As we
work more closely with the Insurance Companies in India we will be well placed
to conduct research that helps the industry continue to grow and develop. India
has a large rural population and selling to this sector is a challenge but also
opportunity for the Industry in India. Understanding the India Consumer
purchase preference will be a focus of further research.
Distribution Channel plays
an important role in determining the purchase behaviour for Insurance. What is
the preferred distribution channel for Indians?
We found that while many Indians (same as the Chinese) might go to
Facebook, Twitter, and other social media sites to do research on which
Insurance product to buy, they still prefer “face to face” purchase of Life
Insurance. This is because the products are perceived as complicated and need
explaining by the Advisor.
What are the challenges
with Distribution Channels globally?
Agents are still the most preferred distribution channel even in the
US and Japan which are amongst the most matured Insurance markets. And you know
that it is the most preferred channel in India. However, the challenge is that
most of the Agents are now in the age group of 55-65 years. There are fewer
agents joining the agency force every year but Consumers still prefer to
purchase Insurance from an Agent. The older Agents may not know how to
communicate effectively to Gen X & Y Consumers. Companies are focussing on
how to attract and retain Gen X & Y Agents.
You have been both in India as well as
China with AIG and AIA. What has been the experience? How do the two countries
differ with respect to the Life Insurance market?
There are many differences and similarities between both important
and large markets of India and China. A large population with a growing middle
class, good economic growth and lower Insurance penetration rates are some of
the similarities highlighting the opportunities for both markets. In India
companies require only one licence to operate across the country whereas in
China each Province requires a new license. Agency productivity is generally
better in China as the companies there have been adopting global best practices
for many years. Consumers in China are more comfortable purchasing Insurance
via the internet than any other Asian market including India.
What are the global best
practices that India must adopt?
LIMRA and LOMA can bring many proven global best practices to help
the Indian Insurance companies improve their productivity and therefore
profitability.
Scientific selection of Agents and sales
staff helps companies identify those candidates most likely to succeed in an
Insurance sales role. This then allows companies to invest in their best
talent.
Effective and regular training and
development of producers and employees improves their productivity and
increases retention rates.
Compensation is a major driver of behaviour
so aligning compensation to required behaviours is an effective best practice.
It is important to establish a management
process and recognition framework within distribution channels and the
organisation as a whole so lower performance is corrected early and higher
performance is recognised effectively.
Technology plays an important role for
Insurance organisations to reduce operating costs and connect closer with
Consumers and customers.
[1] LIMRA,
a worldwide research, consulting and professional development organization, is
the trusted source of industry knowledge; helping more than 850 insurance and
financial services companies in 73 countries increase their marketing and
distribution effectiveness. Together, LIMRA and LOMA provide the most
comprehensive competency-based training solutions in the industry.
No comments:
Post a Comment