Korean Insurers Go Social to Keep Up With Customers

October 11, 2013, 5:39 PM

Insurers Go Social to Keep Up With Customers

By Kanga Kong

Insurers in South Korea are increasingly looking to sell auto insurance on mobile platforms such as social network services or SNS amid falling margins and rising demand for quick and easy access. While selling insurance through smartphone apps is not new, insurers like France’s Axa Direct are looking to widen their sales channels to SNS, Xavier Veyry, the CEO of Axa Direct in Korea and Japan told The Wall Street Journal.At the moment, 14 local and foreign insurers are competing for a share of the $3 billion market in South Korea, according to data from the local financial watchdog Financial Supervisory Service.

“Distribution through SNS platforms…is a definitely a route we are exploring,” Mr. Veyry said, as leveraging peer recommendations though SNS will help it reach out to the targeted population. He said his company had been working for the past eight months to develop a strategy, and was very close to entering mobile platforms and social networks for insurance sales.

“Very often, insurers believe that people have time to inquire, or spend 15-20 minutes on the Web to see differences of various products,” but that’s not true, Mr. Veyry said.

In its first step to win easier access to customers, Axa Direct began using Kakao Talk, a mobile chat app on over 20 million South Korean phones as a platform for its policyholders. Axa Direct has some 1 million auto-insurance policyholders in South Korea.

Through Axa Direct on a Kakao Talk chat list, you can get the certification process done more quickly than on the phone and also get information such as the location of the nearest car repair shop, Axa says.

“I’m convinced the next generation of successful insurers will be online retailers, and this is a fundamental change,” Mr. Veyry said.

Penetration of auto insurance online rose to 30% last year from below 15% in 2006 in South Korea, according to Accenture.

David Link, head of Accenture’s Korean Financial Services, said more leading insurers were selling and servicing through mobile devices after consumers started to expect the same service, whether they were on a tablet, phone or a PC.

“You’ll be most satisfied by the insurer agile enough to respond to you and your specific needs immediately, with a consistent response and service across all channels – web, mobile app, agent, or call center. Five years ago, you wouldn’t have had such expectations,” he said.

Sellers of non-life insurance have faced increasing competition in recent years, as more foreign insurers compete with domestic giants. The operating margin of non-life insurers fell to 2.23% at end-June from 4.1% at end June 2010, according to the FSS data.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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