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With the ability to quickly accumulate customers, the annual premium scale of insurance telemarketing once exceeded 20 billion yuan. However, this former halo has gradually faded, and the withdrawal of insurance telemarketing centers is accelerating. On August 18, a Beijing Business Daily reporter found that 8 telemarketing centers have been approved for cancellation this year, which is close to the number for the whole of last year. In the past three years, the number of telemarketing centers that have "closed their doors to customers" has approached 40.

As telemarketing channels decline, channels such as Internet sales are rising. Does this mean that telemarketing channels are about to come to an end? What will the insurance telemarketing centers that are still holding on to their market positions rely on for transformation?

Popularity declines, and evacuations are frequent

Recently, the Hebei Financial Regulatory Bureau issued an approval stating that it agreed to cancel the Hebei telephone sales center of Sino-British Life Insurance Co., Ltd. (hereinafter referred to as "Sino-British Life").

The Hebei Financial Regulatory Bureau pointed out that after the above-mentioned institutions are revoked, they are no longer allowed to conduct business under the name of the original institutions, and they must notify the relevant policyholders, insured persons or beneficiaries to make proper arrangements for matters such as payment of insurance premiums and collection of insurance money.

In recent years, Sino-British Life Insurance has also been approved to close the Shenyang Telephone Sales Center, Hunan Telephone Sales Center, Beijing Telephone Sales Center, etc.

Not only Sino-British Life, but more and more insurance telemarketing centers are gradually saying goodbye to the historical stage. A Beijing Business Daily reporter found that 8 telemarketing centers have been approved for closure this year, which is the same as the number for the whole of last year.

In recent years, from leading insurance companies to small and medium-sized insurance companies, telemarketing centers have been unable to escape the fate of "closing down". Since 2021, the number of insurance companies' telemarketing centers that have applied for cancellation has reached nearly 40, including the Chongqing First Telephone Sales Center of China United Life Insurance Co., Ltd. and the Shaanxi Branch of China-Italy Life Insurance Co., Ltd.

"The lack of return on investment in many telemarketing centers has led them to choose to exit the market. The reason is that the telemarketing model is relatively simple, especially for life insurance, there is a lack of personalized products and services, and it is difficult to meet the diverse needs of consumers," said Zhao Ming, secretary of the Insurance Department of Capital University of Economics and Business.

At present, the public is using newer technologies to socialize, and the influence of telephones is gradually weakening. At the same time, Internet marketing can acquire customers more accurately. Based on the data accumulated by users online, it can provide more accurate services on users' consumption habits, income levels, insurance awareness, insurance consumption tendencies, etc., making sales easier. Zhao Ming said that with the development of the Internet and mobile communication technology, consumers' purchasing habits have changed, and they are more inclined to obtain information and purchase products through online channels.

Song Zhanjun, deputy secretary-general of the China Insurance Research Institute of Beijing Technology and Business University, also said that the withdrawal of telemarketing centers is due to two reasons: first, young consumers are increasingly inclined to communicate online, and telephone communication is no longer the mainstream communication method; second, the transaction rate of telemarketing centers is declining, the labor operating costs are high, and the venue fees are expensive.

Weak growth and declining channels

As one of the channels for insurance marketing, telemarketing has been used by major insurance companies for nearly 20 years.

Although the domestic insurance telephone sales market is relatively mature, the growth rate of life insurance telemarketing premiums has slowed down since 2018, and in 2019, the growth rate was negative for the first time in history. As the regulatory situation becomes increasingly strict, the business scale and growth rate of life insurance telemarketing have been greatly affected.

The data released by the China Insurance Association provide a clear picture of the development of the telemarketing market. Taking life insurance telemarketing as an example, after reaching a peak of 21.36 billion yuan in 2018, premiums have declined for three consecutive years since 2019. In 2021, the life insurance telemarketing industry achieved a total premium of 12.33 billion yuan, a decrease of 9.3% from 2020.

Liu Chunsheng, associate professor at the Central University of Finance and Economics, believes that telemarketing is a traditional method that has accumulated various problems in its development. For example, as the frequency of customer service staff calling increases, the telephone sales staff's phone number will be identified by the mobile phone system and marked as "insurance and financial management" or "sales" calls, so that the answering rate will decrease. Once the telephone sales staff adopt an irresponsible sales method, it will often cause a very large negative impact and even cast a shadow on the insurance industry.

"Many consumers are disgusted by the telephone sales method and believe that it disturbs their personal lives, resulting in a decline in the acceptance of telemarketing. In addition, the operating costs of telemarketing centers are relatively high, including labor costs, communication costs, and venue rental fees, while profits are declining. At the same time, regulatory authorities have increased their supervision of the insurance sales process and imposed stricter penalties for violations, increasing the operational risks of telemarketing centers," said Zhao Ming.

Some people in the insurance industry have bluntly stated that in the past, some insurance telemarketers have used misleading or even fraudulent means to get consumers to buy insurance in order to complete their own performance targets.

With frequent violations of regulations, insurance telemarketing has repeatedly become the focus of regulatory attention. In some cases, multiple telemarketing centers of an insurance company were fined together. For example, the penalty notice previously issued by the former China Insurance Regulatory Commission showed that the outbound call business of eight self-built telemarketing centers of China United Insurance Group Co., Ltd. had unclear statements on insurance liability, exaggerated insurance liability, and other misleading behaviors for consumers.

Urgent need for transformation, focus on quality and efficiency

Thanks to artificial intelligence technology based on big data, intelligent machines can now simulate people's working methods and problem-solving capabilities, and realize preliminary data screening functions in insurance telemarketing, which greatly improves operational efficiency and reduces marketing costs.

Industry insiders analyzed that insurance telemarketing is a typical "flooding" method to acquire customers. Against the backdrop of the decline of telemarketing channels, it is necessary to use technological means to solve problems, acquire customers accurately, and provide more professional services.

Zhao Ming said that the next trend of insurance companies' withdrawal of telemarketing centers may show the following aspects: First, digital transformation. Insurance companies will accelerate digital transformation and reach and serve customers through Internet platforms and mobile applications; second, online and offline integration. Although the number of telemarketing centers may decrease, it does not mean a complete withdrawal from the market. Instead, it may be combined with online channels to form a new model of online and offline integration; third, customer demand orientation. In the future, insurance companies' marketing and services will pay more attention to customer needs, using technologies such as big data and artificial intelligence to provide more personalized products and services.

In Song Zhanjun's view, with the development of insurance technology, intelligent customer service will gradually be integrated into telemarketing, and many outbound calls in the future will be made by intelligent customer service robots. In order to improve the communication effectiveness of insurance technology in the field of telemarketing and continuously increase insurance technology investment, it is necessary to strengthen the in-depth application of big models in the insurance field.

Liu Chunsheng believes that telemarketing and Internet marketing are not in conflict, but should be a complementary process. If the premium amount of the insurance being promoted is large and the insurance period is long, telemarketing may have a better effect on the basis of Internet marketing.

So, what measures do the insurance telemarketing centers that are still holding on to the market urgently need to take to promote transformation?

Zhao Ming said that first of all, the service quality should be improved, the training of telemarketing personnel should be strengthened, the professional knowledge and service quality should be improved, and good customer relationships should be established. Secondly, big data should be used to analyze customer needs, achieve precision marketing, and improve conversion rates. At the same time, technologies such as artificial intelligence and machine learning should be used to improve telemarketing efficiency and customer experience. In addition, the diversification of channels should be broadened, and telephone sales should be organically integrated with social media, live broadcasts, short videos and other channels. More importantly, the telemarketing center should strictly comply with regulatory requirements, ensure the compliance of sales behavior, and reduce operational risks.

"In short, as an indispensable model in insurance marketing, although it is currently impacted by the new Internet media model, telemarketing will still have its market space in the future. Insurance telemarketing centers that are still sticking to the market should focus on service quality, technological integration, and compliant operations. Ultimately, the insurance telemarketing market will present a pattern of 'survival of the fittest'," Zhao Ming added.

Beijing Business Daily reporter Hu Yongxin