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Distribution Strategies for today’s co-ops

Distribution Strategies for today’s co-ops. Wataru Sato Zenkyoren Intelligence Committee, November 2013. Our organisation. National Mutual Insurance Federation of Agricultural Cooperatives 9.8 million members 703 agricultural cooperatives (primary societies)

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Distribution Strategies for today’s co-ops

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  1. Distribution Strategies for today’s co-ops Wataru Sato Zenkyoren Intelligence Committee, November 2013

  2. Our organisation National Mutual Insurance Federation of Agricultural Cooperatives 9.8 million members 703 agricultural cooperatives (primary societies) Headquarters and 47 prefectural offices (Zenkyoren) No. of staff 230,000 in the primary societies (in total) 40,180 in charge of insurance in the primary societies (out of 230,000) 6,200 in Zenkyoren

  3. Our organisation Target customers (open market or affinity group?) full-time / part-time farmers associate members (non farmers, people living in the community) Main lines of business Life (whole life, endowment life, term life) Non Life (building endowment, fire, motor, medical expence)

  4. Market overview • Predominant channels (ex. life) 68% Sales staff 9% mail order 7% agents 7% over-the counter at bank(4) and insurance office(3) • Trends to note • Changing consumer preferences - policy condition in proportion to each life stage - selection from among many insurers • Innovations - conclusion / modification via internet, insurance shop

  5. Our own distribution • Strategic rationale (imitate or differentiate?) Face to face consultant will be important to provide best coverage ⇒ visit all household in three years (almost have done!) • Distribution channels used - provide financial advice, get a loss report, deliver household goods… - support a local community, provide community service - propagate cooperative ideas, awake “participation” • Relative importance in sales 100% sales staff

  6. Analysis Challenges of current strategy/structure All coverage (i.e. life, house and motor) to all household New opportunities Promote simple, low-priced products to get “New Partner” Changes to structure: in progress or on the horizon, if applicable Reorganize U/W and Claims procedure Longer-term evolutions for your organization

  7. Conclusions • Mid/long-term implications • Industry level Matured market, Increase aging population, declining birth rate • Sectoral level (ie specific to cooperatives/mutuals) Trans-Pacific Partnership(TPP) • Considerations for ICMIF/Shared Intelligence

  8. Note In Japan, Cooperative insurers are not allowed to use a phrase “Hoken”, which mutual and private insurers can use it. “Kyosai” represent the insurance provided by cooperatives instead of Hoken, to distinguish cooperative insurance from mutual and private insurance. Mutual and private Insurers - Regulated by Insurance Business Law - Can provide policies to the general public - Can provide policies outside Japan Cooperative insurers - Regulated by Individual law by its authority - Can provide policies to members only (in principles) - Can provide policies only within Japan

  9. Thank you for your attention.

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