Wednesday, October 19, 2016

Tune Protect: Selling insurance direct

The Tune group has done it before and it can do it better this time with another product (see article below on Thestar by BNM's governor) - this time insurance. Earlier I have written about Tune Protect and its business. Many people may not realise that back in early 2000s when Airasia started, one of its bigger differentiation as against MAS and others is its direct delivery channel of selling air tickets. MAS and other airlines which had legacy delivery channel back then - i.e. through travel agents were not able to react as fast as Airasia which was a "new kid" then.
Now, the group has been selling its insurance products through the current internet channel and I see this as the way to go for the future and a winner - if executed correctly. Direct channel especially for those companies that do not have legacy issues (such as agents) - they would be able to do better. Traditionally, one of the biggest issues for insurance is its high costs of delivery or distribution. It can be overcome with a better delivery channel as long as the products are explained well. In today's world, information for these services as long as they are frank and accurate would do better than through agents.

Tune Protect I can see in fact do better if it works on making its products easy to understand. In Malaysia, there are 2 types of insurance licenses - life and general. Tune has the latter but it can still do certain type of products like Personal Accident, travel, medical and health besides the typical motor and fire insurance.

I expect a major change in this industry when Bank Negara allows price competition.

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