Many large carriers are taking advantage of their reach and scale and combining their extensive branch networks with a variety of new digital channels.

Innovative insurers, who recognize the enormous potential of digital technology, are setting the pace in transforming their distribution channels. They’re adopting new models of distribution to better serve their customers, cut costs, and deliver additional products and services.

Many big, well-established, insurers are opting for an omni-channel approach. They’re taking advantage of their reach and scale by combining extensive branch networks with a variety of digital channels. These channels include highly automated call centers, mobile platforms and self-service websites. Often, they’re delivered across digital ecosystems operated by strategic partners.

Traditional distribution channels will inevitably become less effective at securing new business as consumers increasingly buy products and services using digital devices. An omni-channel distribution approach allows large insurers to use their branch networks to push up sales to existing customers – through product upgrades and cross-selling – while deploying complementary digital channels to generate sales leads and secure new contracts. Sales representatives will have to be redeployed and often reskilled to focus on high-margin sales and advisory tasks.  Strategic partnerships are likely to become more important. They’ll not only provide insurers with additional digital channels for their products and services. They can also offer carriers valuable sales and service outlets in markets where they don’t have physical distribution networks.

More than half the respondents to our global Distribution and Agency Management Survey expect to have wholly digital sales processes within three years. Only one in four have this in place today. Furthermore, 45 percent of respondents have implemented, or are designing, new agent remuneration scales to support the objectives of their omni-channel distribution models.

AXA Group is one of several big insurers that has begun moving to an omni-channel distribution model. It’s investing heavily in new technology to enhance the digital and mobile experiences it provides customers and improve the efficiency of its sales team. The multinational carrier is employing artificial intelligence and data analytics to better understand its sales processes. It’s using this information to develop distribution systems that are more appealing to customers and more rewarding for its agents and partners.

Crédit Agricole’s Predica Life Bancassurance unit has also adopted the omni-channel model. Predicta has already digitized 95 percent of its life insurance processes, from underwriting to claims. By next year, it will offer its customers a full-function multi-channel and multi-device platform tailored for tablet and smartphone users. The platform will be integrated with Crédit Agricole’s global banking website..

Innovators such as AXA and Predica are leveraging their traditional infrastructures while harnessing the potential of digital technology. They’re Digital Transformers, radically revamping their distribution models to meet the demands of the digital economy. Insurers slow to change risk falling behind. And they’ll struggle to catch up.

In my next blog, I’ll discuss the why some insurers are opting for fully digital distribution models. Meanwhile, take a look at our Distribution and Agency Management Survey. I think you’ll find it useful. It’s available here:

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