The following is the Four measures of agent channel transformation From Accelerate the development of China’s life insurance industry recommended by recordtrend.com. And this article belongs to the classification: research report, Mckinsey .
The report points out that China is the world’s largest and most dynamic life insurance growth market, contributing 30% of the world’s new premium income. It is expected that China’s life insurance market will continue to maintain double-digit rapid growth in the next few years. By 2025, the premium income of China’s life insurance market will reach 4.32 trillion yuan, accounting for 16% of the global life insurance premium income.
As for how to accelerate the development of China’s life insurance industry, McKinsey believes that vigorously promoting the transformation of agent channels will be the best way in the short term.
Agent channel transformation is one of the core driving forces of the value growth of China’s life insurance industry
From the perspective of insurance distribution channels, bancassurance channels have continued to grow in the Chinese market in the past few years, accounting for 41% of the total life insurance premium income (GWP) in 2017. However, most of its sales are short-term principal guaranteed investment products. With the new regulatory trend of insurance returning to its origin, this channel is expected to face major challenges in the future. For direct sales channels, it accounted for about 8% of GWP in 2017, and digital channels accounted for 50% of GWP. As regulators encourage the insurance industry to use online channels to expand customer contact, insurance companies are likely to continue to view digitization as the preferred marketing tool rather than an end-to-end sales channel. Life insurance sales still rely on face-to-face communication with customers to a certain extent; in 2017, the premium income from brokers only accounted for 1% of GWP, but as the market gradually began to favor highly professional independent brokers, it is expected that brokers who have contacted several insurance companies will gradually be welcomed.
Bi Qiang, global managing partner of McKinsey and head of insurance consulting business in China, said: “by contrast, the agent channel is undoubtedly the most important and fastest growing distribution channel, accounting for about 50% of GWP in 2017. But the average performance of agents is low. Part of the reason may be that nearly half of China’s 8 million life insurance agents started to set foot in this industry after 2015, so they are relatively inexperienced. Improving the performance level and professional level of agents will bring significant profit promotion space for insurance companies. “
Insurance companies need to rapidly promote the four strategic changes of agent channels
McKinsey believes that Chinese insurance companies can improve agent performance through the following four strategic measures:
1、 From senior agent to professional manager
At present, agent managers in China’s insurance industry are more like senior agents than professional managers in the real sense. They spend a lot of time and energy on personal sales, because their performance evaluation almost entirely depends on the sales performance. In addition, some of them are lack of knowledge about the role and skills of professional managers. Therefore, insurance companies must realize that agent specialization should start from the transformation of agent supervisor, and the key step is to set up full-time agent supervisor positions, so that they can devote their time and energy to on-site counseling and agent career development planning. Insurance companies can redefine the role of agent managers, position them as leaders, and emphasize their roles in personnel guidance, agent career development planning, and rebuilding team structure and incentive mechanism.
2、 From wide net recruitment to Strategic Talent Source seeking
At present, agent recruitment is mainly carried out by agents who want to form their own team. When allocating time between recruitment and sales, agents usually prefer the latter, because sales may be converted into commission income. In contrast, the frequency of recruitment activities is relatively low, and it is usually carried out in a big way when the recruitment target needs to be completed at the end of the year. Insurance companies should abandon the agent led wide spread and decentralized recruitment, and regard talent recruitment as a strategic process, including using data analysis method to evaluate candidates, strictly controlling the recruitment process, and centralized management of recruitment matters.
Hu Ziliang, deputy managing partner of McKinsey Global, said: “normally, it may take six to nine months to recruit a qualified agent. Most insurance companies have a standardized process, however, this process is usually lengthy and inefficient. Among them, searching for candidates from existing agents’ social networks, as well as many rounds of time-consuming interviews and evaluations, all lead to low conversion rate and low retention rate. Insurance companies hope that new employees will take the job of agent as a long-term career. Therefore, in order to avoid the dilemma of “big in and big out”, insurance companies need to strategically use data analysis tools to carry out more efficient screening process to ensure the identification of the most qualified job seekers with the highest degree of fit. “
3、 From part-time agent to full-time agent seeking professional development
China’s life insurance agents have obvious part-time characteristics. A recent industry survey shows that the number of full-time life insurance agents is very small, only 39% of them work more than 6 to 8 hours a day, while in terms of activity, 70% of them only visit customers 1 to 3 times a day. Therefore, for insurance companies, maintaining a large but inefficient part-time agent team is not only costly, but also unsustainable. To solve this problem, a feasible way is to comprehensively promote the transition from part-time agents to full-time agents, and provide a matching salary system and incentive mechanism for full-time agents. At the same time, insurance companies should gather the agents with the best performance to create a high-end brand for them and provide them with an attractive career development opportunity.
David Schiff, a global managing partner at McKinsey, said: “it’s challenging to build a high-end brand within the company because it means that insurance companies need to manage and maintain two different groups of agents. This increases the cost of enterprises, but also may disperse the management resources. However, insurance companies must realize that the current agent team is huge, and it is a long process to realize the comprehensive transformation. If an insurance company can create a high-end brand for high-performance agents on the basis of the existing agent structure, it will help the high-quality agents turn around and attract the fresh blood who pursue long-term career development to join in – both of which are catalysts to improve the agent’s performance and professionalism. “
4、 From sporadic deployment of digital tools to integrated end-to-end digital platform
Many Chinese insurance companies have developed a variety of digital solutions, trying to help agents shorten the time of handling management affairs. However, the utilization rate of these solutions is usually low, because they are isolated from each other, and can only help agents improve administrative efficiency, but can not improve sales performance. McKinsey believes that insurance companies should establish an end-to-end, integrated digital sales platform based on customer analysis. End to end design can not only help agents acquire, underwrite and serve customers more efficiently, but also with the increasing digital level of Chinese consumers, this platform should establish a “digital first” customer interaction mode and provide a variety of digital services, such as interaction, search and active contact.
“The agent channel of China’s insurance industry can be successfully transformed and will become an example for its global counterparts,” Bi concluded. This kind of transformation seems difficult, but in fact it can take effect quickly. Then, with the help of the rapid growth momentum in the early stage, we can leverage the greater change potential in the future. “
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