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Innovation in the distribution of several channels



Normally the months of July and August are quite quiet in the insurance industry — but that has not been the case this year! Fat transfers are redundant by both new and traditional insurance companies, which sets a new pace for creating the future of insurance and distribution.

In this new era of insurance, almost all insurance processes quickly become frictionless, including purchases. If channels are easy to use with products that are easy to understand, insurance has the opportunity to grow through a frictionless experience. The advantage of adopting this dynamic is that we go from constantly having to go out and "sell" people who buy insurance to introducing an insurance that is ready to be "bought" seamlessly when needed.

This is a sustainable business model Instead of constantly fighting for potential customers and potential customers, we constantly make insurance easier and more appealing to buy.

Multi-channel is the mantra for the future of distribution

Changing customer expectations and behaviors are rapidly driving insurers into a multi-channel world, whether they like it or not. This requires a reconsideration of their strategy and how they collaborate with others to reach customers in new ways ̵

1; to create a porous market where commitment is everything and the relationships between partners, insurance companies, customers and channels are crucial.

In our latest thought leadership based on primary research with car and life insurance buyers, the agent and broker channel is still a top choice for both the younger generation Millennials and Gen Z and the older generation Boomers and Gen X with 74% -80% indicate that they would still use this traditional channel. But that's where the common ends.

Not surprisingly, members of the younger generations are open to buying insurance from a wide range of options. For car insurance, 66% of the younger generation are interested in it being included in the purchase of the vehicle, compared with 52% of the older generation. And 64% of the younger generation compared to 52% of the older generation would buy from the car manufacturer's website or app.

For life insurance, 54% of the younger generation would buy insurance through a fitness app compared to only 38% of the older generation.

And for both car and life insurance, the younger generation is very open to buying insurance from Amazon; 56% of the younger generation would do so compared to 46% for auto and only 38% for the life of the older generation.

The interest and acceptance of a wider range of call options underscores why insurers need to consider when, how and where they interact with the younger generation, and to be there with quick buy calls. This is where having partnerships and an ecosystem becomes very strategic to help insurers expand their reach and presence to where their customers will be.

Leaders Who Make Bold Movements

Over the past month and marked last week, they have been a number of announcements from some leading insurance companies about new partnerships that will accelerate the customer experience, expand distribution reach and the ability to buy seamlessly. needs!

John Hancock announced the integration of his vitality program with Amazon Halo, enabling Hancock's Vitality customers to use the Amazon Halo Band to earn vitality points based on their daily efforts for a healthier lifestyle that should mean a longer life. [1] The Amazon Halo Band, a portable health and wellness device, will measure and analyze users' activity, heart rate, sleep and tone of voice to provide individual health insights and help encourage healthier habits – and thus earn vitality points.

State Farm announced a partnership with Ford for use-based insurance (UBI) using auto-telematics and connected data from eligible connected Ford vehicles. [2] Ford car owners will be able to choose the State Farms Drive Safe & Save program, which adjusts the premium to miles driven while rewarding safe and good driving behavior with potential discounts.

Tesla announced plans to use data from its cars. and drivers to build a "revolutionary" insurance company that provides better insurance value and also to adapt the design of cars to make them safer and cheaper to repair. [3] Tesla believes that the accuracy of the information from the car's and driver's behavior is "the core of being competitive" with an insurance that looks ahead, not backwards. Uniquely, Tesla wants to assess data on vehicle damage to create a continuous loop to adapt the cars' design to make them safer and cheaper to repair, which will further reduce insurance costs.

And finally, Amazon had two interesting features. First, Amazon's India business now offers car insurance through an agreement with Acko General Insurance (Amazon is an investor in Acko) to cover car and motorcycle insurance in India, marking Amazon's entry into car insurance. [4] Second, Amazon Web Services (AWS) and Toyota's Mobility Service Platform (MSPF) announced a collaboration program for mobility insurance. [5] AWS leverages its cloud platform and consulting to access and analyze Toyota and Lexus vehicle data and driver behavior, another step forward in its program to offer its customers insurance.

Expanding Partner Ecosystems Separating the Leaders from the Pack

With these and other examples, market boundaries are no longer clear. They shift and in some cases they evaporate. The combination of technology and customer expectations directly affects insurance by changing the traditional ecosystem for agents and brokers – which, yes, are still relevant – to have insurance embedded or sold differently across a broader ecosystem including car, transport companies, big tech and more.

By doing so, these partners break down business and market boundaries to make ecosystems work smoothly, based on customer needs and expectations for both the risk product and other value-added services. This in turn creates greater value for these insurance companies due to new revenue streams and access to a broader market through the multiplier effect.

The future of distribution is multi-channel

For decades, agents and brokers have long been the chosen channel for P&C and L&A insurance companies. However, this decade-long choice and channel landscape is changing rapidly and is driven by a number of factors, but especially customers and partner ecosystems. Customers' expectations move to a multi-channel world and challenge insurers to provide channel options and choices, either directly or through partners. Multi-channel distribution options improve customer interactions on the customer's terms … not the insurer's.

What are the inhibitors of establishing a multi-channel strategy?

  • Current business models remain tailored to the older generation of buyers, not the younger generation.
  • Many insurers remain focused only on the agent / broker channel and lack plans as a way forward to a multi-channel world in terms of strategy, technology and partnership.
  • Many insurance companies do not have next-generation distribution management features – often they still work with home-grown solutions or many spreadsheets. These lack depth in the core distribution functions from on-boarding, licensing and appointments, compensation and incentive programs, automation and data insights to effectively optimize a multi-channel distribution strategy, let alone to be competitive in attracting new partners.
  • The lack of digital, next-generation technology hampers the ability to easily build a partner's ecosystem, embed insurance offerings and more.

The result is that insurers' ability to expand and effectively support new channels is beginning to redefine new leaders in the industry. In our research on strategic priorities from earlier this year, we found Leaders – those who focus on new channels, partner ecosystems and technology – are far ahead of Followers and Laggards. Leader expands channels at a staggering rate of 20% more than Followers and 60% more than Laggards – expanding market reach and ability to acquire and retain customers and revenue.

Market success increasingly depends on multi-channel strategies, including how to support the traditional agent / broker channel, and new strategic partnerships are crucial to the insurer's ability to maximize growth strategies today and in the future. Insurers must master the science and art of creating relevant and fast digital contacts with customers who are motivated by life events and make it easy and satisfying for them to complete the insurance purchasing process.

To do so, a distribution strategy and ecosystem is fundamental to bringing together a range of distribution and digital functions, channels and partners that will exponentially expand their reach, brand and customer engagement while meeting customer expectations of a digital, multichannel world. Watch our webinar from last week, The Future of Distribution Management – A 3D View, to learn how P&C and L&A insurance companies use a 3D strategy (digital, data, distribution) to successfully manage this changing distribution landscape.

In the age of this new insurance, market leaders are experimenting with new possibilities. They create new strategic partnerships. They offer innovative new products. They experiment with offering insurance when and where customers want it. They are experimenting with direct distribution. And they are still engaged in agents and brokers. But they are evolving into a multi-channel world.

Market boundaries are redefined. The combination of technology and customer expectations directly affects insurance by changing the traditional ecosystem for agents and brokers, that the insurance is embedded or sold differently across a broader ecosystem including health, healthcare, financial services and other entities.

How does your business strategy align with what leaders do? What is your multi-channel strategy? Will your technology support your strategy? What specific plans can you take to improve your chances of success?


[1] O & # 39; Donnell, Anthony, "John Hancock Integrates Amazon Halo With Vitality Program," Insurance Innovation Reporter, August 28, 2020, https://iireporter.com/john-hancock-integrates-amazon-halo-with-vitality program /

[2] "State Farm® and Ford Team Up on Usage-Based Insurance," State Farm Press Release August 27, 2020, https://newsroom.statefarm.com/team-up-with- Ford-on -DSS-use-based-insurance /

[3] Simpson, Andrew, "Tesla Invites Actuaries to Help It Create a" Revolutionary "Insurance Company," Insurance Journal, July 24, 2020, https: // www. insurancejournal.com/news/national/2020/07/24/576871.htm

[4] Singh, Manish, "Amazon now sells car insurance in India," TechCrunch, July 23, 2020, https: // techcrunch.com/ 2020/07/23 / amazon-now-sells-auto-insurance-in-india /

[5] Gilboy, James, "Toyota and Amazon Partnership Want to Make Money on Your Driving Data," The Drive, August 20, 2020, https: // www. thedrive.com/news/35859/toyota-and- amazon-partnership-wants-to-get-into-your-driving-data


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