A SURVEY commissioned by insurance ecosystem builder Fermion found that Southeast Asian consumers trust banks to sell insurance, but only a third of those who trust are willing to purchase.
Fermion has found that although trust in bancassurance products is high in Singapore, Malaysia, and Indonesia, the onus is now on banks to maximise this potential as almost all (97%) of respondents to a survey commissioned by Fermion stated that they are willing to purchase some sort of insurance via online banking. The survey discovered that, already, a third of Indonesians, and 12-13% of Malaysians and Singaporeans are stating a preference to purchase insurance from a bank.
To determine the sentiment of consumers towards bancassurance, Fermion commissioned a survey in April 2022 with a sample size of 1,200 people in Singapore, Malaysia, and Indonesia.
Largely, Malaysians still buy insurance from insurance agents and insurer: 32% of the respondents said they prefer to purchase insurance from insurance agents; and 27% stated specifically that they favoured buying insurance from insurers.
Respondents from all three countries claimed the quality of the online claims experience and price were the clear determinants in the decision to purchase. For those who did make a purchase through a bank, roughly a quarter of them cited convenience as the reason to do so, ahead of a fifth of the respondents, who stated they bought from their bank because pricing was attractive.
Banks should provide more information at the point of purchase.
A large reason cited as to why the respondents did not purchase bancassurance products is that they wanted to better understand what’s on offer, but couldn’t find the information on their own.
Malaysians and Singaporeans said that they would most like to have easy access to a trusted financial adviser through the bank. In parallel, Indonesians asked for a guided step-by-step online process.
The challenge for banks will be to build trust with a human element to the digital purchase experience.
Reimagine bancassurance with customer’s goals in mind
To sell more bancassurance products, banks need to put customer expectations and needs front and centre.
In the future, bancassurance could evolve to become a platform for customers to purchase life and non-life insurance protection, as well as gain access to comprehensive financial support such as savings, investments and loans, which will help them achieve their life goals.
This article is contributed by Fermion Group CEO Peter Miller.