Advice-led distribution in life insurance (Part 1 of 2)

More and more, individuals are facing the prospect of funding their own retirement. In both developed and emerging insurance markets, the ranks of the under-insured are growing. Meanwhile, shrinking profitability, increasing customer expectations and competition from other financial institutions—brokerage firms, asset managers and investment advisors, to name a few—puts life insurers at risk of being just manufacturers.

To address these trends, we believe that life insurers should adopt an advice-led distribution strategy. By differentiating themselves on the quality of their advice, and by offering tailored, multi-channel customer experiences, life insurers can achieve high performance.

The right customers

The first step in delivering tailored customer experiences is to know the customer. Specifically:

  • What is the customer’s financial personality?
  • What life events are pertinent to the customer?
  • What is the customer’s financial ability to act on an opportunity?

Analytics and customer segmentation are critical capabilities. Insurers must understand each segment’s needs, and develop solutions that meet those needs—a task that is often easier said than done.

The right offers and experience

Having identified the right customer segments, insurers should create offers and experiences that will elicit the right reaction from customers. Product bundles and preferred pricing are common examples, but insurers should also consider the tone, messaging and content of the offer.

Furthermore, insurers can create competitive differentiation by optimizing their channels for how customers want to use them.

Next week, I’ll talk about three more considerations for life insurers developing an advice-led distribution strategy: the right operating model, the right talent and the right metrics.

To learn more, download Achieving High Performance in Advice-Led Distribution (pdf; opens in a new window).

Michael Costonis

About Michael Costonis

Michael Costonis is Managing Director of Accenture’s Insurance practice for North America. He is responsible for setting the overall vision and strategy for the practice, as well as pursuing new client relationships.

Costonis has twenty years experience developing, managing and deploying large scale technology systems, business processes, and strategies for some of the world’s leading insurers, including property & casualty, life, and multi-line insurance companies. In his career with Accenture, he has worked with more than 50 leading insurance clients in 14 countries around the world.

In addition to his role as North America industry executive director, Costonis is the lead for Accenture’s global claims services. In that role, he oversees claims strategies, assets, capabilities, and sales development. He also has led Accenture’s Insurance Solutions practice in North America, where he was responsible for driving growth for Accenture’s asset-based business in Insurance, including claims, underwriting, and policy administration.

Costonis has authored several articles in leading insurance trade publications, and has been quoted in The New York Times, Bloomberg News, Reuters News, Best’s Review, Insurance & Technology, InformationWeek, National Underwriter, Technology Decisions, and the Philadelphia Inquirer. He has spoken at several leading industry conferences in the U.S. and internationally.

Costonis received a bachelor’s degree in political science from Swarthmore College (Swarthmore, PA). He is based in Philadelphia.

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