Aviva pins sales hopes on advisers
Aviva, Britain's largest insurance company, will rely on banks and independent financial advisers to sell its products in Hong Kong rather than directly employ agents in order to save money.
Preferring to avoid the common but costly practice of poaching agents from rivals, the firm is betting that it can do without in-house salespeople at a time when the traditional sales system is breaking down.
Last week, the insurer signed up 30 independent advisers to further its strategy.
The move is based on experience in Britain and Europe, where insurers no longer rely on tied agents and instead sub-contract the sales function to independent advisers and banks, which increasingly resemble financial supermarkets offering products from different providers.
Aviva general manager Stuart Fraser said some clients might find the insurance agents unable to answer their investment-related questions.
Recent times have seen the population in Hong Kong turn away from insurers' sales agents as they are deemed to lack the financial nouse to offer sophisticated financial advice.
Meanwhile, independent advisers are supposed to represent their clients' needs as they are not explicitly tied to any one financial institution.
Aviva's newly engaged financial advisers will carry 75 of its fund products. Two years ago, the insurer linked up with DBS to sell its term life products.
Last week, the company sold its Asian general insurance business - which covers Hong Kong, Singapore, Malaysia, Brunei, Thailand and Indonesia - to Mitsui Sumitomo Insurance, Japan's second-largest general insurance firm, for US$450 million.
Mr Fraser claimed the sale would not affect its life assurance business in Hong Kong.
'It's a good move as we will have more capital to expand the life insurance business worldwide,' he said.
