Direct Insurance in South Korea: The Need for Customer Relevance

by KyongSun Kong, September 6, 2013
Industry Trends


Direct channel insurance sales in South Korea’s insurance industry remain small, but they are growing steadily. Direct channel insurance revenues from 2007 to 2011 in the life insurance sector have grown by a 7.5% CAGR, and in the nonlife insurance sector by a 19.7% CAGR.

Direct channel insurance sales in South Korea have yet to reach a significant level. In the life insurance industry, sales represent a meager 1.8% of the total, while in the nonlife insurance industry, sales are only 10.9%. In Direct Insurance in South Korea: The Need for Customer Relevance, Celent analyzes the use of direct channel sales among insurers as well its potential. This is accompanied by a detailed examination of direct channel sales and a sector analysis of salient characteristics and trends.

To facilitate the growth and development of direct channel sales, there are a number of challenges the insurance industry must overcome. Here are the five most pressing challenges:

  • Enhancing online channels.
  • Simplifying products.
  • Enhancing call centers.
  • Unifying direct channel management.
  • Battling credit card fees.

“Face-to-face sales have been the rule, as more than a few insurers have shut down their direct channel operations or scaled them back,” says KyongSun Kong, Analyst with Celent's Asian Financial Services Group and author of the report. “Nevertheless, diversification of sales channels remains essential for insurers looking to respond to customer needs.”

This report features an analysis of the available channels and provides a range of proposals for insurers considering enhancing their direct channel operations.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

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Table of Contents

Executive Summary


Face-to-Face and Direct Channels



Life Insurance Industry Direct Channel Market



Non-Life Insurance Direct Channel Market


Telemarketing’s High Profile


Products Suitable for TV


Why the Internet Continues to Confound as a Sales Channel



Online Life Insurance Sales: Early Days of a New Era



Growing Sales of Online Life Insurance


Directions in Mobile Insurance


The Future of Direct Channel Sales



Enhancing Online Channel Sales



Simplifying Products



Enhanced Call Centers



Centralizing Direct Channel Management



Battle Over Credit Card Fees




Leveraging Celent’s Expertise



Support for Financial Institutions



Support for Vendors


Related Celent Research


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