Other parts of this series:
- Insurers must move quickly to finalize their digital strategies and distribution models
- Insurers are accelerating the deployment of digital technology across the sales process and moving to new omni-channel models
- Insurers are ramping up their IoT investment and preparing an array of new products for 2016
- Insurers are eager to use digital technology to better focus on the needs of their customers
- Insurance agents will continue to have a valuable role in the new digital distribution era
- Insurers must fathom whether digital aggregators are their allies or rivals
- Digital Transformers show how to benefit from the disruption that is sweeping the insurance industry
The enormous disruption of the insurance industry triggered by digital technology is overturning traditional distribution models. And dramatically changing the roles of agents and brokers.
Insurers must quickly rethink their distribution strategies, capitalize on the increasing power of digital technology, and redeploy their agents and brokers. If they don’t, they risk slipping behind their competitors and losing market share.
Already, digital services have made significant inroads into the distribution channels of property and casualty insurers as well as life insurers. Our recent Distribution and Agency Management Survey highlights how quickly insurers are moving to digital channels. The diagram below shows this shift is taking place across the insurance industry.
More than half (52 percent) of insurers say they will offer customers completely digital sales process within the next three years—about one in four have this in place today. Only about one in five say they have no plans to implement a wholly digital sales process.
Today, 32 percent of personal lines property and casualty insurers, and 27 percent of life insurers provide quotes and advice completely through digital channels. This is expected to increase by about 10 percentage points in the next three years.
Even more striking, insurance providers plan a similar acceleration in the deployment of digital end-to-end sales processes. These digital channels are expected, within three years, to account for 31 percent of property and casualty sales and 26 percent of life sales. Similar growth is expected in the application of digital technology to enhance customer services. Around 33 percent of property and casualty customer service channels are expected to be digital within three years and 31 percent in the life insurance industry.
Interestingly, this trend also extends to small-commercial customers with 38 percent of commercial insurers planning to offer digital quotes and 24 percent intending to provide customers with end-to-end digital underwriting services.
Insurers in Europe are mostly in step with carriers elsewhere in the world in the shift to digital insurance distribution. However, they’ve been slower to use digital technology for small-business insurance. European carriers only conclude about 11 percent of sales to this sector through digital channels compared with 14 percent elsewhere in the world. There are substantial opportunities for European insurers to grow their businesses in this sector.
The swing towards digital distribution is being fueled by rising customer expectations, set by highly successful digital services companies such as Amazon, Uber, Facebook and Netflix, as well as a desire among consumers for greater convenience and control.
As insurance providers respond to these increasing demands, and accelerate their move to digitally-enabled omni-channel distribution models, they must take a hard look at how best to leverage their traditional strengths. Tied agents need to be redeployed in roles where they can better serve customers and achieve cost savings and efficiency gains for themselves and their distributors.
Before I examine how insurers around the world are addressing this challenge, I want to look at another dimension of the rapid digital disruption in insurance distribution. In my next blog which I plan to post in the new year, I’ll discuss some of the insights our research has revealed about the fast emergence of connected insurance products. Until then, have a safe and happy holiday season.
For more information about Accenture’s 2015 Distribution and Agency Management Survey follow this link: https://www.accenture.com/us-en/insight-insurance-distribution-survey.aspx