Coming soon to a small screen near you, homesurance. Or that is the theory, says Greg Becker, who explores its growing success in Asia.
The average person spends four hours a day glued to the small screen. Advertisers see this attention as an opportunity, and advertisements, infomercials and home shopping channels try and sell us everything. A recent search of a TV guide suggested that there are about 2,000 TV shopping programmes each week in the UK, flogging everything - including insurance.
Axa Sunlife Direct has sold products for many years and has famously used Michael Parkinson since 2008 to sell over-50 plans. While this has not been universally popular, sales have been nothing to sniff at.
In South Korea, insurance sales using infomercials - known as ‘homesurance' - started in late 2003 with the PCA cancer product. By the second quarter of 2004, many companies had entered and were using TV for brand building, brand awareness and financial education.
Fourteen companies were using the distribution channel to sell various types of insurance, and the uptake was brisk, with 178,000 policies sold in the first quarter of 2004, and 767,000 policies being sold using TV based distribution between April 2004 and February 2005.
The products are often aimed at the needs of women and their dependents, with sales of term life, accident,and products covering health and critical illness variants proving popular.
SUCCESSFUL VISION
The policies often offer good value, with premiums 10% below alternate distribution channels. There is even a Korean Life Annuity available on CJ Mall, a channel on South Korea's CJ Home Shopping Network.
Examples of this marketing range from 90-second ads to 90-minute infomercials, and it looks as though all the standard infomercial gimmicks are being brought into play. There are contemporary references to Facebook, Twitter, and people are constantly encouraged to pick up the phone to the telesales departments.
This sales approach is popular and not just a Korean phenomenon, having already spread in the region to China and Taiwan. This success story has not been without hiccups: there have been questions of mis-selling and this has led to more evolved propositions focusing more on financial advice provision.
However, statistics from the Korea Life Insurance Association (KLIA) show that while more than ten companies were still selling products using home shopping channels in 2010, sales were far lower than 2006, partly due to the reduction in the number of distributors.
