6 Ways Insurers Are Reimagining Their Distribution Models

As part of their Distribution and Agency Management Survey, Accenture polled more than 400 senior executives at large and medium-sized insurance carriers in 20 countries from July to October of 2015, all responsible for or involved in their companies distribution and agency management function.

While the majority of those surveyed were from life and property & casualty (P&C) insurance companies, the findings deliver deep insights into some of the key ways insurers across all business sectors are working to transform their distribution models to meet the demands of an omnichannel era.

 1. Channel Digitization

Insurance companies are accelerating the shift to a distribution model where digital plays a central role in the majority of interactions due to increasing customer expectations, the desire to increase customer convenience and control and the need to reduce distribution costs. The shift to digital sales processes affects every stage of the cycle, from initial discovery of information to requesting sales quote and advice to making the purchase. While only 24% of insurers reported to have a wholly digital sales process, only using human interactions for customers needing advice, 28% plan to make the shift in the next three years.

Despite this shift, most insurers expect physical channels to endure in the digital age, but recognize there will be a rethinking of how these physical channels are being used.

2. Insights-Driven Customer Experiences

To an increasing degree, insurers are moving from a product-focused sales process to one that is intimately grounded in the needs of the customer. 63% of survey respondents cited the move to needs-based selling as a high priority. In order to accomplish the shift, insurers are recognizing the need to have customer-centric capabilities within their organizations, with 58% prioritizing the move to a more customer-centric model and just under half already using or planning to a build a customer-centric hub.

Insurers are also working towards an insights-driven customer experience by mastering customer data, with 41% ranking the improvement of their data and analytics capability as their top distribution technology investment priority. By mastering data and analytics, they hope to better understand the potential value of customers, the right channels to reach them, the right time to engage, and the right messages to use, and work to develop dynamic customer segments based on these insights.

48% of surveyed insurers are creating a new function to support customer segmentation and 59% are prioritizing their ability to steer customers to the right channel based on segment.

 3. Changing Role of the Agent

A wide array of new technologies is helping to relieve agents of many routine, low-level tasks, allowing them to focus on higher-value tasks such as deepening their relationships, developing multi-product solutions for customers and advising them on more complex issues.

63% of surveyed insurers are placing high priority on refocusing agents where they can add the most value. They are also placing a high value on their agents improving their advisory skills with regard to complex products, and enhancing their sales interactions with customers across multiple channels. In order to achieve and sustain these changes, carriers are restructuring their remuneration models.

4. The Internet of Things

Leading insurers are viewing the disruptive impact of the IoT as an unprecedented opportunity to drive growth, offering the potential to move away from purely providing coverage for a potential negative happening to a more proactive, positive role of continuously helping the customer prevent the occurrence of one and live an overall more wholesome and happy life by offering behavioral-based ‘living services’.

Insurers are defining strategies and piloting or launching products or services that take advantage of the IoT:

  • 30% include products based on the Internet of Things among their top distribution technology investment priority.
  • 44% of insurers rank connected devises for personalized insurance as a top-five priority to drive revenue growth in the next three years.
  • 46% have launched, or are testing, personalized real-time digital/mobile services to help customers identify, manage and prevent risks.

5. Omnichannel Distribution

60% of surveyed insurers are prioritizing the creation and extension of their omnichannel capabilities to provide a seamless and responsive customer experience across all channels, shifting away from having a single interaction channel where customer experience is “outsourced” to the agent or broker.

In order to support an omnichannel distribution approach, insurers are targeting a different set of skills when recruiting agents. 50% of survey respondents expect their agents to be able to use digital and social media effectively for marketing, prospecting and lead qualification in three years’ times.  Insurers are also beginning to equip their agents with new tools in order to perform in the omnichannel era, from tablets and apps to 57% now providing customer data analytics at the point of interaction to help agents close the sale.

6. Integrating into New Ecosystems

Leading insurers are creating or joining new ecosystems that transcend industry boundaries and facilitate an end-to-end buying experiences, creating greater engagement and relevance across every customer touchpoint.

40% of insurers are already partnering with non-insurance companies to offer customers a broader range of products and services while nearly half (46%) are parenting with start-ups and external partners outside the sector to drive digital innovation.

“We want to be an ecosystem in which we could be seen as a platform and other partners can be creating value around the platform. We have to be open in terms of our culture and mind-set to make this work, as well as opening up our architecture.” – Demetrio Migliorati, Head of Digital Workplace and Innovation, Banca Mediolanum

To read Accenture’s full report, please visit: https://www.accenture.com/t00010101T000000__w__/it-it/_acnmedia/PDF-6/Accenture-Insurance-Distribution-Survey-Report.pdf

 

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