Want to Shave 30% Off Your Life Insurance Premium?: Buy it on-line
It is an open secret that most big insurance companies in Thailand offer big discount for those that buy life insurance on line via the internet. The reason being that there's no middleman and hence, the bulk of the sale commission is passed on to the customer. Although, this may be an “open” secret but it is still a secret because not many people know about it and most insurance companies have not been promoting them vigorously enough because they don't want to undermine their own agency sale force. That's why at most companies' websites, the on-line products are specially tailored and not sold by the agency sale force. In this issue of M&W, the author sat down with Khun Predee, Deputy Managing Director of Thai Life Insurance Pcl. to discuss about the origin of the on-line business model and future prospects for this distribution channel.
As far as Khun Predee is concerned, life insurance policies in Thailand and in other countries for that matter, are still “sold and not bought”, meaning that people do not just wake up one day and “want” to buy life insurance. In fact, it is quite the opposite, the notion of dying young never crosses most people's minds and therefore, life insurance policies need to be “sold” to the clients most of the time. This is one of the reasons why buying life insurance via the internet or ATM machines have not really taken off even though, it is much cheaper and very easy to execute without any hassles. Most insurance companies here in Thailand, write less than 5% of their business on-line and in developed countries where internet is much more widely used, the figure is not much higher.
As for Thai Life Insurance, they were one of the pioneers in this field, when www.thailife.com was established over 10 years ago. At first, the original idea was never to sell products on-line but it was part of the company's Customers Relationship Management (CRM) and to a lesser degree to keep up with the competition because it was a fashionable thing to have. But what started out as an “image building” exercise turned out to be an important and integral part of the company's overall marketing strategy up until the present day. In fact, according to the latest survey, www.thailife.com enjoys the most hits among the life insurance sector websites. Apart from being one of the communication channels with the clients, the homepage is used as a selling tool by the agents and to communicate among themselves via cyber-agent society.
Although, most insurance companies that we have talked to, tend to down play their aspirations about using the internet as a distribution channel because they don't want to upset the delicate arrangements in place with the existing sale force but the writings have been on the wall for quite sometime that the internet is the thing of the future and it will be much cheaper for the insurance companies to sell their products on-line. In fact, a good number of them are putting more resources towards direct marketing and tele-marketing channels using the internet as multi-media call centres.
Currently, only simple products are sold on-line by most companies. These usually comprise of Personal Accidents (PA) and Term Life policies with the Baht 50,000 tax deduction in mind. Personally, I am a firm believer in simplicity and buying life policies via the internet is as easy as ABC. All you need is a credit card, either Visa or Master will do, and you have to be within an insurable age group and that is 20-60 years. There's no need for medical check up; you can choose how you want to pay your premium: quarterly, bi-annually or annually. In the case of Thai Life, they even went one step further to offer the same premium for both sexes throughout all age group; 15 days “free-look” period and your policies are automatically renewed every year via a standing instruction to charge the premium to your credit card. It really is that simple. All it takes is one credit card and everything else is only one click away. And the real beauty of all is that either the sum insured or the premium is 30-40% better than buying from traditional agency force. Listed below are some of the best websites that we have tested: