If there was a silver lining to the pandemic, it is this: it compelled carriers to change and actively pursue digital transformation. As the old saying goes, “When fishermen can’t go out to fish, they mend their nets and repair their boats.” According to a McKinsey report, until January 2020, about 90 percent of insurance agents’ interactions and nearly 70 percent of their ongoing client conversations occurred in person.
However, the pandemic necessitated a rapid shift from in-person to digital interactions for critical processes like claims processing, policy issuance, and distribution. Even customers who were less engaged online swiftly migrated to digital platforms.
Yet, this crisis becomes a wasted opportunity if P&C carriers do not revise their distribution strategy, where they’ve lagged behind their insurtech counterparts in providing customer-centric, digital convenience.
Distribution — The Old Model No Longer Works
Customers today want and expect a mix of digital and remote interaction models and tools. They want to shop for insurance on their own terms — sometimes outside standard business hours. They want clear, transparent information and smooth, hassle-free interactions. Today, on average, the share of digitally active customers has increased by more than 60% since 2020. If carriers are to engage with potential customers, they must meet them on their preferred digital and social channels.
As carriers digitize their channel distribution, they must also transition from legacy processes that require offline execution — such as physical signatures — to the digital self-service tools most modern customers prefer.
To stay ahead in this changing landscape, carriers must focus their efforts across three key areas: customers, agents, and enablers.
- Embrace a Culture of Customer-Centric, Tech-Driven Convenience: Customers spend 15-20 seconds on a website before deciding to stay or leave (Nielsen Norman Group). This is a setback for most carriers, who typically ask for loads of personal information before giving the customer a simple quote.When faced with complex decisions, consumers seek answers and information online. Yet many carriers still lack the capabilities to carry the customer experience online. To bridge this gap, carriers must create delightful digital experiences, providing quick access to relevant information. Ensuring seamless online interactions is pivotal, as frustrated customers might switch providers if their needs are not met.
- Invest in a Remote and Hybrid Distribution Force: In recent years, there’s been a rise in remote and hybrid sales forces. These forces offer several advantages, including broader customer reach and lower commission costs per sale. For carriers, it means they can manage their sales messages more directly.Hybrid agents, adept in both in-person and digital channels, offer a transitional path for carriers seeking remote capabilities. Embracing this shift enables carriers to adapt to evolving customer preferences effectively.
- Data — The Enabler in Digital Distribution: Another important enabler in digital distribution is data. Insurance companies typically have vast troves of data locked in legacy systems. Efficiently mining this data will help carriers identify trends faster, segment customers better, and optimize lead generation.Currently, only 20 percent of agents attribute an increase in leads to their insurance companies. This is a massive opportunity for carriers to invest in data to drive more leads. To tap into the value of the data, carriers can build advanced analytics models to pinpoint high-value customers, predict churn, and identify cross-selling or upselling opportunities. The data can then be integrated into call lists to help agents focus their attention on the highest-value leads.
Read the e-book — Under the Hood: Unlocking the Hidden Value in Insurance Data
Be a Digital Front Runner
In-person agent interactions will remain an essential part of distribution, particularly in large and commercial insurance products. However, the digital shift demands a tailored approach. Identifying gaps in the ideal customer and agent journeys is foundational. Developing agile strategies, fortified with digital prospecting tools that initiate trust-building interactions, is crucial. While implementing these changes to the distribution operating model might require time and capability building, the carriers leading the charge today will emerge as distribution trailblazers tomorrow.
Contact us if you want to learn more about improving the customer experience and expanding your reach with the right strategy, data and analytics.