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LATEST THINKING


The future of insurance distribution

Charting the course for disruptive growth

OVERVIEW

The insurance industry is often mentioned as a top candidate for digital disruption as internal and external competitors regard the industry’s perceived weaknesses—such as a traditionally unsatisfactory customer experiences, overly complex products, and customers’ willingness to switch providers—as opportunities to gain market share. Developing new distribution models while simultaneously maintaining the core business is a challenging proposition. Insurers need to continue to invest in the core, reducing costs and increasing efficiency to remain competitive and fund growth initiatives.

Among other things, insurers need to be able to share customer data across channels and to make experiences hyper-personalized based on full knowledge of context and prior interactions. Insurers unable or unwilling to adapt quickly run the risk of falling behind competitors from inside and outside the industry.

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"High performers will likely pursue multiple models simultaneously, while digitally enhancing their core distribution capabilities."

DISRUPTING DISTRIBUTION—FIVE POTENTIAL MODELS

  1. THE VIRTUAL INSURANCE ADVISOR

    This model makes the insurance purchase and renewals easy by offering the customer choice, counsel and transparency through a combination of data-driven web, mobile, voice-activated, and contact-centre-based advisory platforms.

  2. THE EVERYDAY RISK COACH

    The insurer mines customer-use and behaviour data to develop insights and provide advice that reduces risk and rewards customers, transforming insurance into a living service.

  3. THE PLUG AND PLAY INSURER

    By embedding insurance "point of sale" options into other shopping experiences, and partnering strategically with online and digital vendors, and household and small-business retailers, insurers can gain access to sizeable new customer groups quickly and cost-effectively.

  4. THE ECOSYSTEM ORCHESTRATOR

    The insurer aggregates and presents to the customer a range of value-added products that cater to risk and non-risk related needs, leading to both increased contact frequency and engagement.

  5. THE PEER-TO-PEER NETWORK OPERATOR

    An evolution of the affinity group model, insurers distribute to risk-bearing pools of customers built around personal or professional affiliations.


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