The Factors of Salesperson’s Behavior in Buying Life-Insurance Based on Different Consumers’ Perception
A. The Trend of Life-Insurance in Indonesia
The promising growth opportunities in the Indonesian insurance market continue to attract new players, despite certain unfavorable government rules and regulations. The industry has registered a tremendous growth in the past few years, mainly due to untimely occurrence of natural and man-made disasters, launch of new products, growing economy and increasing demand for savings. Like many other countries, the Indonesian insurance industry can be categorized into two different segments: life and non-life. Life insurance is the dominate segment in the Indonesian insurance industry, with 68.3% share of total insurance premium in 2008. In this report, the writers will focus only on life insurance. Life Insurance consists of insurance enterprises which specifically handle the risk of death, accident, or sickness; also includes old age / future pensions for the insured party with an insurance value fixed and agreed to by the two parties included in the contract. Table 1 below shows the number of life insurance companies in Indonesia from 2005-2009. The total number of companies during these periods actually decreases about 10%. However, despite of the decreasing number of life insurance companies, the new business premium (Figure 1) achieves a significant growth during these periods. This shows that there is still a lot of opportunity for expansion in this life insurance industry. Table 1. Number of Life Insurance Companies in Indonesia
Figure 1. Indonesian Life Insurance Penetration
Regarding the trend of the life insurance in Indonesia, it is actually shifting from traditional insurance to unit link insurance. The point of turn actually started in 2007 (Figure 2). From that year forward, unit link insurance has been dominating the sales. In 2009, it even accounts for 53.18% of the life insurance sales (Figure 3). Judging from this, the unit link is predicted to still be the trend for the next few years. A unit-linked insurance plan (ULIP) is a type of life insurance where the cash value of a policy varies according to the current net asset value of the underlying investment assets. It allows protection and flexibility in investment, which are not present in other types of life insurance such as whole life policies. The premium paid is used to purchase units in investment assets chosen by the policyholder.
Figure 2. Trend of Life Insurance Product 2005-2009 (in billion IDR)
Figure 3. Trend of Life Insurance Product 2009
Figure 4 below shows that there is a significant increase in the number of life insurance salesperson from 2005 until 2009. Basically it means that people start to realize that life insurance business is quite promising for the future. In this study the writers will find out what factors (behavior/attribute) of a life insurance salesperson that will influence people to buy this product.
Figure 4. Number of Life Insurance Salesperson in Indonesia
B. The Consumer Behavior Pattern of Life-Insurance in Indonesia Despite the promising future in the life insurance industry, people in Indonesia actually still kind of doubtful to buy a life insurance. According to Jens Reisch, President Director of Allianz Life Indonesia, actually the Indonesian people appreciated the importance of insurance, but, since there were violations committed by insurance agents, the complicated process of claims, and many insurance companies that were closed down, etc. and these made a negative impression on the insurance industry. However, today the awareness of Indonesian people toward the importance of life insurance has become much better than in the past. One of the indicators is the number of life insurance policy that kept increasing year over year (Table 2). Moreover, people perception toward life...