Coming soon to a small screen near you, homesurance. Or that is the theory, says Greg Becker, who explores its growing success in Asia.
Yet, some new entrants have been able to buck the trend and boost their sales. The top four firms all maintained first-year premiums sales of more than £1m in 2010.
The Korean market has had significant changes in distribution before, with the current distribution force being a fraction of the 1997 peak of 440,000 sales people (life and non-life).
South Korea has 17m broadband connections (more than the UK when adding wireless and broadband connections) and was rated first on the ICT Development Index (produced by the International Telecommunications Union) in 2010 and 2011. The UK ranked tenth in 2010.
Speaking personally, I have never dared own a TV. But this is no isolation from the real world and I regularly dip into freely available content on the web.
The point is, there is a key difference in these viewing habits: these actions are active and not passive. There is a need to opt-in to a programme.
It is probably fair to say that people viewing TV proactively are less likely to download ‘home shopping channel’ programming. Does this mean that home shopping will be less influential in future? Probably yes, but this Korean example reminds us of the importance of customer segmentation.
Koreans, with one of the highest penetration rates of high-speed broadband internet access in the world, are showing that this distribution channel is durable, and that certain segments may still find it appealing.
While TV broadcasting may have started in the UK in 1936, new forms of media distribution are threatening its dominance. The future will see channel proliferation and new channels getting the limelight, but trusted proven channels will continue sales to the late adopters.
Early adopters get the headlines, and they often are the mass market of tomorrow – but not always. The original hypothesis for this article was that TV is dead, and only specific demographics are likely to be buying using the home-shopping channel.
The future of infomercials is now less certain. With the forecast that 350m internet-enabled TVs will be sold by 2015, will these connected TVs be a lifeline to infomercials?
Greg Becker is product development actuary at RGA
