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Direct or Indirect

So what is it, direct or not direct? According to the experts including Rice Warner Australia is leading the way when it comes to direct life insurance. I find this hard to believe if the same experts tell us that Australia also has the biggest insurance gap in the developed world. However, who am I to argue with the big data that RW have access to.

Let’s first try to define what ‘direct’ means. Having worked in the online comparison space for over a decade I have seen ‘direct’ being slapped on many things. I have noticed Jim Minto CEO at TAL use the term ‘direct’ to capture all things online. For me though the term refers to the products that are direct i.e. TAL’s Go Protect or Zurich’s EziCover. The like of iSelect, XLife and Lifebroker all sell fully underwritten retail products that an IFA would sell however the sales process is online and over the phone. Small detail I know-however when the terms are used incorrectly by CEO’s it does not help the discussion.

How can Australia have the biggest insurance gap, but also take out the most direct insurance?

What is clear though is that direct insurance sold via TV advertising and supported by great call centres is here as is gaining market share.

The traditional face-to-face IFA is under threat and needs to evolve in order to survive. if we are to believe the data coming out of the UK where 40% of life insurance products are bought online, IFA’s need to embrace and have some professional online presence accompanied by an insurer’s quote and apply tool (there are a few out there). This would be a start if anything.

I feel that Australia is about to commence a comparison site battle on the next 12 months. Comparethemarket have invaded the shores of Australia and are here to stay. They are an impressive outfit who claim to have a more recognised brand than Coca Cola in the UK. They have not really pushed life insurance in any above the line advertising in Australia. In addition to this I think that there is still room in the market for another player to get involved.

I think that it is clear the Australian market is about to see a big change with comparison sites looking to bully the lazy Australian life insurance industry into change.

The change will be about driving efficiency via digital. Watch this space ladies and gents.

3 thoughts on “Direct or Indirect Leave a comment

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