Review of the distribution channels used by life insurance companies in Singapore

Abstract

The distribution of individual life insurance policies in Singapore has traditionally been undertaken by agency forces of the individual companies. Today, more companies are seen using other direct and indirect channels of distribution in order to win a larger slice of the life insurance pie. However, it is apparent that it will still be the agents who will play a crucial role in closing the deals. Although purchases can be made via other channels, they lack the personalized touch of individual agents who study the different circumstances of each client and his specific needs in terms of type of policies and amounts required. The agency system has proved to be the most effective method of distribution for life insurance companies, and more efforts are now being invested on improving the quality of services and professionalism of the agents. However, with the selection of qualified agents becoming more stringent, the increasing awareness of insurance as well as the availability of new channels, insurance companies are expected to widen and intensify their efforts on the direct response channels.