In Asia's ASEAN region, life insurers are looking for ways to reach budget-conscious ‘do-it-yourselfers' of all generations. Peter Tan examines one company's successful cultivation strategy.
To do this, Tune Insurance did not rent its list. Rather, it partnered with local life and general insurers in the countries served by its Air Asia airline. The partners then sell their products through Tune Insurance to Air Asia’s loyal customers. A portion of the business is co-insured with Tune Money Life.
Tune also partnered with a global reinsurer, which provided the technical expertise and capital that enabled Tune Insurance to distribute insurance without having to set up an insurance company, due diligence on potential partners and products, and optimisation, as needed, for pricing and underwriting.
Tune Insurance began insurance distribution in Indonesia in late 2010, in Malaysia in mid-2011, and in Thailand in April 2012. Its local life insurance company partners sell the personal accident, life, critical illness and hospital cash insurance to Air Asia customers in these markets.
So far, this strategy has been an enormous success. In 2010 Tune Insurance started out with a team of three. In 2012 the team, which has grown to 350, sold more than six million policies to AirAsia travellers and to people who registered on the website to be informed of offers.
Tune Insurance recently listed on the Malaysian stock exchange with a market cap of RM1bn (£205m). Tune intends to continue its expansion by acquiring domestic insurers in key markets in the next 24 months. It already has a Malaysian insurer and is selecting potential purchase targets in Thailand and Indonesia.
Tune intends to continue this strategy of partnering with life insurers to other countries served by AirAsia and AirAsiaX, including Singapore, China, India, the Philippines, and possibly Japan, Hong Kong and Australia.
The life insurance companies partnering with Tune Money are achieving several goals: expanded distribution in an attractive market, access to valuable but difficult-to-reach customer cohorts, and experienced assistance in optimising their products for this market. Perhaps aspects of this strategy could work in the UK? n
Peter Tan is general manager of RGA Hong Kong
