SENDAI, Japan — The television commercial opens with Masayuki Suo, writer and director of the movie “ Shall We Dance ?, ” saying that even he knows what it ‘s like to get the runaround. This wo n’t happen at Allstate, an off-camera narrator promises. One representative will handle your claim from beginning to end, he vows. The ad then cuts to Suo on the earphone, calling Allstate. The toll-free count flashes on the screen, and the 30-second blot closes with a two-note jingle in English : “ beneficial hands. ” “ Allstate, ” the narrator intones as a kicker.

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In only its one-sixth foray into a extraneous grocery store, Northbrook, Ill.-based Allstate Corp. is selling car indemnity in Japan, the world ‘s second-biggest national market, with about 75 million vehicles crowded on a domain batch slightly smaller than California. Stacked up adjacent to Allstate ‘s operations in the United States, where it insures one of every eight cars and homes, the party ‘s japanese start-up looks inconsequent : a second-floor function in central Tokyo with a staff of 40, a call center in nearby Kawasaki that employs another 30 people and a blitz of ads in a alone test commercialize.

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even today, the company concedes that less than 0.5 percentage of japanese consumers have always heard of Allstate or its “ good Hands ” motto. After four months of selling, Allstate has handled lone one accident claim. But the venture, which Allstate plans to expand from its test market hera in northerly Japan to the Tokyo megalopolis by next spring, could help basically alter the more than $ 30 billion car insurance industry in Japan — and provide a basal for the company to go into other lines of insurance here. For 50 years, the japanese policy industry was under the micromanagement of Japan ‘s Ministry of Finance. In fact, regulation was so mean that all insurers were required to offer precisely the lapp rates and coverage. This guaranteed goodly profits for the insurers — and steady employment for Japan ‘s about 600,000 policy agents — but eliminated any veridical competition. Consumers generally picked up any policy their car principal or employer offered, and that was that. now, with fresh rules taking prevail under Japan ‘s Big Bang deregulation of fiscal services, Allstate and other foreign companies are starting to shake things up. For the beginning clock time, thanks to these outsiders, japanese consumers are being offered a option, and some are finding it ‘s a good conduct. “ change has been much faster than I thought, ” says Noboru Araki, executive director of Japan ‘s trade group for non-life insurers, the Marine and Fire Insurance Association of Japan. “ We can never go back now. ” Like most of the other new entrants, Allstate besides is going about its business in an improper way. Rather than selling insurance through a network of agents, as japanese companies do here and as Allstate does back dwelling, it is pitching policies immediately to car owners through television receiver and newspaper ads and its always-open help center. The direct-marketing approach gives Allstate an edge it needs to enter a market long safeguarded for domestic insurers and to grab the attention of consumers who had no reason to comparison-shop. With fiddling overhead, Allstate and the other newcomers are typically quoting rates 35 percentage to 40 percentage below what japanese companies have been charging for the like coverage.

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Shigeki Adachi, an report administrator with advertise representation Hakuhodo Inc. in Sendai, says he switched coverage of his 1995 Jeep Grand Cherokee last December to Switzerland ‘s Zurich Insurance Co., after besides getting a quote from American Home Direct. By moving, he says, he was able to keep the same coverage and cut his premiums in half, to $ 750 a class. “ It was indeed easy to save money, ” says Adachi, 31, who is married and has a 2-year-old son. Because of deregulation, “ there ‘s more monetary value competition, there ‘s more service competition, and besides there ‘s a greater diverseness of products, ” says Kirk Patterson, a Tokyo-based spokesman for american International Group Inc. of New York, the parent of American Home Direct and the largest foreign non-life insurance company in Japan.

last April ‘s start-up of Allstate Property and Casualty Insurance Japan Co. marked Allstate ‘s second base jab at selling policy in Japan. The company began a 50-50 life insurance partnership with what is now Saison Life Insurance Co. of Japan in 1975. A ten late, the joint venture branched into automobile indemnity. But the partners split up in 1997 over how best to operate in the deregulate marketplace that was fast approaching. Determined to go it alone, Allstate told Tom A. Rafiner, a fiscal character who had equitable been transferred to Tokyo from the company ‘s headquarters outside Chicago, to map a way binding into Japan. After months of psychoanalysis, including a series of stress groups with consumers in Tokyo, Nagoya and Sendai, Rafiner and his team concluded that Allstate should not go after the national grocery store all at once — a Big Bang approach that others such as Zurich and American International ‘s American Home Direct subsidiary company have taken.

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rather, he chose to start in Sendai, a midsized marketplace with a metro population of roughly 2.2 million about a two-hour bullet-train ride north of Tokyo. “ We decided early on that we did not want to try to swallow the whole farrow in the beginning, ” recalls Rafiner, who became president of the japanese subsidiary company in July 1998. By starting minor, he says, the new auxiliary could better gauge staff levels at its call center. It besides could tweak its market campaign to make certain its brand-building message of high timbre and moo price is getting through, and it could take more fourth dimension to line up a network of body shops. And it could do it all without spending tons of money. Rafiner says he has a market budget of $ 2.5 million for Allstate ‘s first base year of operation in Japan. That is enough to buy 300 to 400 television receiver spots and 60 to 70 columns of newspaper space a calendar month in Sendai. By comparison, AIG ‘s American Home Direct is said to be spending $ 40 million this class on marketing. Another key decision by Allstate was to do without sales agents and make its pitch immediately to consumers through ads and a toll-free phone number. Back in the United States, Allstate depends on an army of 15,500 full-time agents. But it could take years to replicate that sales force in Japan. Agents besides require offices and equipment. And because of Japan ‘s antipathy to layoffs, their salaries could become a permanent cost of doing business. As a result, says Araki of Japan ‘s insurance trade association, every fresh newcomer to Japan ‘s non-life insurance grocery store indeed far has opted for direct market.

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This direct approach besides is becoming Allstate ‘s prefer tack oversea. Though it sells life insurance in Canada, South Korea, Indonesia and the Philippines through agents, it offers cable car indemnity in Germany through ads and a toll-free telephone number, and this is how it will do business in Italy when it begins pitching car coverage later this year. One of Allstate ‘s final moves was choosing an ad spokesman. In the end, the company and its selling consultants settled on two celebrities widely known in Japan for being thoughtful and worldly : film director Suo and Sawako Agawa, a writer and former television receiver newscaster. Rafiner and others at Allstate wo n’t divulge the company ‘s sales goals or stream results. He concedes that correct now Allstate ‘s japanese unit is losing money like an Internet start-up, but he adds : “ We ‘re getting calls every day ; we ‘ve not had a day when we ‘ve not sold business. ” He besides says Allstate ‘s game plan calls for expanding to a second japanese market later this class and metropolitan Tokyo, an urban sprawl of about 30 million people, by the end of next March. After that, depending on how well things are going, Allstate may start selling coverage for personal accidents, personal property or life insurance, he says. As careful and risk-averse as indemnity companies are, however, there is no guarantee Allstate will succeed. By the meter it enters the Tokyo market, a six others will already be there with their direct-marketing spiels, in summation to the japanese companies that historically have dominated the industry. undoubtedly, more will enter as other provisions of the Big Bang take effect. And within two years, banks will no long be barred from the insurance sector.

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Over the future 10 years, analysts at Standard & Poor ‘s Corp. recently forecast, mastermind marketers will capture no more than 10 to 15 percentage of Japan ‘s car insurance market. That means as a group, they might have a smaller market parcel than Allstate now enjoys in the United States And with rates coming down as companies push into the marketplace, the analysts warned, insurance companies will be harder pressed to make money, particularly considering Japan ‘s faint economy. That could lead to a shakeout .

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