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Reimagining insurance distribution

The Accenture Distribution & Agency Management Survey reveals the accelerating pace of digitization—with profound implications for insurers.

A recent survey of senior insurance executives has confirmed what most in the industry have realized: distribution is transforming at an accelerating pace, with digital playing an ever-increasing role in every facet of the function.

Carriers’ business and operating models are being disrupted by a multitude of forces. To gain a clear understanding of their responses to this disruption, Accenture conducted the Distribution and Agency Management Survey in the latter part of 2015. The study polled more than 400 senior executives at large and medium-sized life, P&C (both personal lines and small commercial) and multiline carriers in 20 countries. All are responsible for or involved in their companies' distribution function.

The survey found that four out of five carriers either have implemented a wholly digital sales process in which human interaction plays a role only when customers require advice – or they plan to in the future. Allied to this are the findings that:

  • P&C personal lines insurers estimate 21 percent of all current sales are concluded digitally from end to end, and they expect this to rise to 31 percent in three years’ time.

  • The equivalent data for commercial lines is 14 percent of sales today, rising to 24 percent.

  • Life insurers estimate the share is 20 percent today, increasing to 26 percent in three years.

Digital is creating a plethora of opportunities for growth, the most potent example being the Internet of things – 45 percent of insurance executives view the IoT’s connected devices as a strong driver of revenue growth in the next three years. The number of IoT-related products and services launched or piloted by insurers in 2015 increased between two- and four-fold, depending on the line of business. Forty-three percent of auto insurers have either launched or are piloting new initiatives that take advantage of the IoT.

The results of the survey indicate that there are six areas that are key to digital transformation, each of which requires carriers to make critical decisions about the future of their distribution model. They are:

  • Channel digitization

  • Insight-driven customer experiences

  • The changing role of the agent

  • The future of aggregators

  • The role of ecosystems

  • The Internet of Things

By proactively addressing these areas, insurers can position themselves as disruptors rather than trying to defend their current positions and their legacy business and distribution models. To do so, we believe there are a number of actions they should consider:

  • Commit to their chosen business and distribution models, moving beyond a succession of pilots

  • Proactively define their position in new ecosystems, cooperation models and partnerships

  • Move from indemnification to real-time protection

  • Make innovation and customer-centricity the cornerstones of their distribution strategies

  • Strive for simplicity of access, transactions and offerings

  • Focus agents on advice, value-add and deeper customer relationships

The decisions insurers make today will determine not only the kind of customer experiences they will provide to remain competitive, but in fact the kind of businesses they will be in the years to come.

Take a look at the infographic.

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