Meiji Yasuda Life Insurance Co. has decided to start selling insurance products online, starting in April 2021, the first time a major life insurer in Japan will do so.
These firms traditionally emphasize direct sales person-to-person, but with more customers seeking to avoid meeting people due to the novel coronavirus pandemic, Meiji Yasuda will move toward both direct and online sales channels.
A newly developed smartphone app will be used to sell insurance. New customers would be able to apply for almost any insurance product over the app, while existing customers would be able to purchase new products or review their contracts.
The company is considering continuing direct sales via sales staff and others for some high-risk products, such as foreign currency-denominated policies.
Most of the insurance policies offered by major life insurers have long-term contracts. To ensure customers fully understand what they are buying, companies have emphasized direct sales by specialized sales staff.
About 15 companies offer life insurance over the internet, but they are believed to hold only a small share of the overall market. However, sales of online life insurance spiked while the big insurers were refraining from face-to-face sales after a state of emergency was declared in early April.
Meiji Yasuda decided to sell insurance over the internet out of alarm over the emergence of online life insurance due to the pandemic.
The big insurers have been hesitant to offer online sales due to their emphasis on attentive in-person service. Yet with the pandemic changing customers’ wishes, other companies may also have to review their sales methods.
Meiji Yasuda saw a sharp drop in new contracts after halting sales activities due to the state of emergency, though they continued accepting applications by mail from existing customers.
The company has gradually resumed sales as the state of emergency has been lifted nationwide, but it will likely take some time before things return to normal.
With concerns about the second wave of infections, the company decided it needed to open an online sales channel.
“Due to the impact of the novel coronavirus, whether service is face-to-face is becoming less important to customers,” said a senior executive at Meiji Yasuda. “We need to be flexible in responding to their needs.”
Online life insurance companies saw major growth in new contracts while the major life insurers suspended sales activities.
Lifenet Insurance Co., the largest online insurer, reported a record high of about 11,000 contracts in April, about double the figure from the same month last year. This trend continued in May, with sales up about 1.3 times.
A representative of Orix Life Insurance Corp., which also saw an increase in new contracts, said, “Demand for applications that aren’t in-person is increasing.”
Online life insurance makes up only a tiny slice of the market, but the pandemic could change the industry map.
Banks have been moving to give customers the ability to make bank transfers and open accounts online, but the insurance industry has acted slower in seeking to use digital tools.
Major insurer Nippon Life Insurance Co. plans to start giving smartphones to its sales representatives this fiscal year, enabling them to communicate with policyholders via the messaging app Line.
Fellow big insurers The Dai-ichi Life Insurance Co. and Sumitomo Life Insurance Co. have been distributing health-related videos and other content via their apps to maintain contact with customers.
“The challenge for the big life insurers,” said Natsumu Tsujino, a senior analyst at Mitsubishi UFJ Morgan Stanley Securities Co., “is incorporating digital into their face-to-face sales.”Speech.
Originally published on https://the-japan-news.com