Aviva CEO sees end of insurance agents

Aviva CEO sees end of insurance agents

Aviva CEO sees end of insurance agents For Aviva CEO Mark Wilson, the age of insurance agents has come to an end, at least in some Asian countries.
 
In an interview with Bloomberg, Wilson said that the number of insurance agents in some of Asia’s most developed markets could decrease by 50% over the next three years.
 
Wilson said insurance in these markets is “ripe for disruption” and digital sales are starting to eat into the commissions of insurance agents.
 
The number of insurance agents will also decline as more of these insurance professionals approach retirement age, Wilson added.
 
He also believes that financial advisers will increasingly replace agents as sellers of insurance.
 
“Most of the Asia growth story has been on the back of agency,” Wilson told Bloomberg. “The agency era in a lot of those markets is now over; you have extraordinarily high commissions and an ageing agency force.”
 
Aviva does not rely on agents to sell products in Asian countries including China, Hong Kong and Singapore, where it opened a Digital Garage to sell insurance directly to the customer online.
 
Wilson told Bloomberg that in Singapore, Aviva is “becoming the home for mature agents who have 20 years of experience and want more freedom and independence.” He added that older agents in Asia “don’t want to be in tired pyramid agency structures.”
 
But not everyone in the industry agrees that the days of insurance agents are numbered, Bloomberg noted. According to the news agency, British insurance giant Prudential told investors earlier this month that it has boosted its recruitment of agents in Asia.


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1 Comments
  • Thom. C.J. Young 2016-12-03 1:03:39 PM
    Will we ever tire of listening to the CEO's of insurance markets tell us that THEY are going to put us out of business by replacing Brokers in their distribution network with their own version of a direct sales network that they believe will produce a better ROE for them? In every instance where they've tried this the process has failed for them at substantial cost to their market share when they realize their error.

    Look, I'm not denying that the process is changing and perhaps even the service ratio of CSR to clients will see them managing larger books of business with less CSR's but insurance is a complicated product to buy and to use. Inevitably where an insured needs help with determining their needs or negotiating the fair settlement of a claim a human being will be needed to find solutions for the customer. That person will work for a company or a brokerage in some capacity and as has been demonstrated over and over again, insurance companies will make more money for their shareholders when they have an independent broker representing them.

    I wish that insurers would embrace the technology that currently exists to allow us to process the data more efficiently than constantly postulating about how the technology will replace us. It will replace clerks and underwriters and mail room people but it will never replace the sales and service person because those customers will want to deal with me when they have a question, not the call centre people who put the process back to the beginning with every call!

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