Society of Actuaries Report Examines How to Reach China's Middle Class on Life Insurance Research Identifies Three Specific Segments of Chinese Consumers
SCHAUMBURG, Ill., July 7, 2014 /PRNewswire-USNewswire/ -- The Society of Actuaries (SOA) released a new report analyzing the attitudes and life insurance purchase habits of middle class families in China. The report "The Changing Middle Market for Life Insurance in China," helps to better understand consumers' beliefs in terms of their financial situations and their needs for life insurance products. Based on attitudes and behaviors of the respondents, the research identified three distinct segments of China's young middle class: life investors, the uninterested and life protectors.
"The SOA research is designed to help the industry create more effective life insurance marketing approaches in China based on audience segmentation and life stage characteristics," said consulting actuary Sharon Huang, FSA, a member of the SOA's Project Oversight Group for this study. "The role of life insurance is continuing to change in China, and there is a clear need for customized messaging and distribution channels to directly reach this young middle market."
The identification of the three segments can help develop marketing strategies for these audiences. In addition, the study examines the challenges, drivers and opportunities for these segments:
- Life investors - view life insurance as a temporary need and retirement saving as a primary focus
- This group is the largest of the middle market and may be reached through call center marketing and agents. There is a need to reposition the role of life insurance as a more permanent part of a financial plan rather than as a short-term solution.
- The uninterested - have a lower level of interest in death benefit life insurance
- This group can be provided with education on the industry and how products can help address their financial security needs. Nearly half of this segment would seek more information about life insurance through online sources.
- Life protectors – see a permanent need for life insurance throughout one's lifetime
- This market segment should be considered for new life insurance products. They get insurance through agents or online, which is a unique mix compared to other groups.
Seventy percent of the surveyed consumers noted that purchasing death benefit life insurance is more important now than in the past. Additionally, 61 percent said purchasing coverage will be more important for their children, indicating a market transition for life insurance. The study covers how knowledgeable the audiences are about insurance and financial products, the types of insurance they have, the likelihood of purchasing life insurance and how they value protection-oriented life insurance.
The report's lead researcher Walter H. Zultowski, Ph.D. noted, "Today the life insurance industry in China is diversifying in terms of both a broadening of product types offered and an expansion of how consumers can access the life insurance products."
The report confirms the skepticism of some Chinese consumers toward certain ways of how life insurance products are sold, such as through financial agents versus through a website. While this SOA report shows many global similarities, it also acknowledges major differences and nuances to international life insurance markets.
The SOA's International Section, Marketing and Distribution Section, and Research Expanding Boundaries Pool all supported this SOA-commissioned research project. The research was conducted by WZ Research + Consulting, LLC and Mathew Greenwald & Associates. The survey was of 1,989 family households from 19 cities across China with annual incomes between RMB 60,000 and RMB 360,000.
For the full report visit www.SOA.org/Research/Research-Projects/Life-Insurance/research-2014-06-understanding-changing.aspx
About the Society of Actuaries
The Society of Actuaries (SOA) is an educational, research and professional organization dedicated to serving the public, its members and its candidates. The SOA's mission is to advance actuarial knowledge and to enhance the ability of actuaries to provide expert advice and relevant solutions for financial, business and societal problems. The SOA's vision is for actuaries to be the leading professionals in the measurement and management of risk. Visit www.SOA.org.
SOURCE Society of Actuaries