AXA highlights consumer choice as core benefit
Investment-linked products represent a strong, strategic direction for insurer AXA, according to AXA China Region chief operating officer Warren Lee.
'We have seen in other markets around the world it goes hand in hand: as more people become involved in equity markets, demand increases for these products,' he says.
'The benefits these products give you, especially as the customer becomes more knowledgeable about investment markets, include the range of alternatives.
'Rather than a traditional product, where you put your money in and the insurer invests it as they see fit, with these you can choose to put more money into equities or bonds, depending on your risk profile.
'Definitely, with our investment-linked products you can choose where to put your money.'
Mr Lee says: 'People take out different policies at different stages of their life. For example, we are about to launch a new investment-linked product. It is a retirement product, so it is a longer-term product with an annuity option on the end.'
AXA markets its investment-linked products through its 2,000-strong agency.
'We have heavy education programmes. The agents carry out a needs analysis as they go through the selling process,' Mr Lee says.
AXA also has a team of about 200 advisers who follow up on leads supplied by the agents.
'We have by far the biggest force of salaried advisers in Hong Kong,' Mr Lee says. 'Within that, there is a very strong process of needs analysis, determining exactly which product is suited to a customer.'
He says AXA urges customers to take a long-term approach to investing and not to become distracted by short-term market swings. In this way, they will gain from buying more units at depressed prices, gaining the benefit when markets ultimately rebound.
'We would strongly say you are looking to get in over time. You have ups and downs when you invest. The best way to invest is a constant investment over time.'
Sales of investment-linked products declined slightly last year after strong growth in 2001, according to Mr Lee.
'That is because people were looking at the investment markets and thinking it was not a good time to go in.'
Axa was first to the market with unit-linked insurance products in early 2001, Mr Lee says. 'We have been a trailblazer quite a lot.'
With unit-linked products, customers are offered a range of unit trusts under a chosen plan. The account value of the product is directly linked to the performance of the unit trusts.
Mr Lee says he does not expect major changes to the basic structure of investment-linked products in Hong Kong in the future, but he says the range of underlying investment choices will broaden.
'We have certainly seen that in the United States, British and Australian markets,' he says.