How General Insurance can Prepare for Next Distribution Model

In 2020, Digitization in insurance is already becoming a game-changer amid the COVID-19 crisis, which continues to affect the distribution of insurance around the world. However, during this time the insurance companies can prepare a robust strategy towards the short and long-term implications of this global pandemic. 

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     COVID-19 has profoundly affected the way people are engaging across the world. Social distancing and safety measures have shifted personal interactions to digital channels. It will certainly affect both life and general insurance distribution at present and also in the long-term, as social distancing would continue to follow in the time to come. Indeed, the human relationship with technology and remote interactions is speedily evolving and is moving towards the “new normal.”

    Many insurers have likely already taken steps towards expanding the online customer service channels. The insurance companies are now more focused on the next set of challenges, including remotely building new customer relationships as one of the biggest challenges imposed during the time of a pandemic like COVID-19. Meanwhile, the online insurance brokers and aggregators are reporting similar, if not greater, volume.

    To combat the challenges the insurance companies require rethinking their distribution model across customers, sales force, and digital to prepare for unprecedented times.

    Here is a customer archetype

    Traditional Approach              


    Digital Savvy

    Prefer conventional approach and human touch

    Value for money and rational approach

    Highly receptive to digital and innovative models

    Apprehensive about digital methods

    Prefer human interaction but don’t mind moving to digital modes

    Technologically advanced

    Trust driven purchase

    Price Conscious

    Demand Flexibility

    Attracted towards highly responsive insurance companies

    Read to switch purchase channels

    Not comfortable with complex models and T&CS

    (Source: PwC)

    Transitioning from Offline Distribution to Online Distribution

    Insurance providers are now navigating legacy insurance products that may require offline execution for medical underwriting and manual signatures. While the distributors may be dissatisfied with the challenges that it imposes, meanwhile, the customers at present do not want to engage in the face-to-face process for the fear of the contagion.

    Insurance Companies need to find ways of digitally underwriting the business by relying on customer’s good health statements, external data, and adjusting thresholds to increase the number of customers who can skip a physical medical examination or risk losing it.

    The two key areas of focus to improve the conversion rate of customers through digital mode are to offer simplify products and increase awareness. For example: Arogya Sanjeevani health insurance standard product in the general insurance sector.

    Long-term Planning

    Not only short-term, but general insurance companies also need to reevaluate their long-term insurance distribution strategy and make-shift toward digital.

    Bring Optimal Mix of Channel

    The general insurance distribution network will to continue rely on the agent forces in the years to come. In addition to that, the insurance companies would also need to set up digital- and remote-sales-force options to cater to the customers switching to digital interactions.

    A flexible model will bring resilience in the face of an unprecedented future. Setting up remote agencies and getting remote insurance agents to facilitate interactions with the customers, and refining the purchase and claim process based on the feedback.

    Introduce Modifications and Technologies Supporting the New Normal

    Leading insurance companies should see both tech and digital as core differentiators to their existing set-up. With such modifications, it will possible to enable the agent channel to conduct digital-savvy operations and transactions in the post-pandemic world. Adaptation of digital tools to increase remote prospecting and building the trust of the customers in initial conversations would help agents in replacing their traditional offline interactions.

    To create the tech road map to the new normal, insurance companies would need to work with agents to identify the obstacles that currently slow down productivity. One identified they must rapidly develop a viable product solution to bridge the underlying gaps. One of the recent agent surveys reveals that they want to digitize the application process, identified signatures, submission forms, and client onboarding process.

    The distribution process can be augmented with a strategic Merger & Acquisition decisions. A lot of Fintechs are now open to conversations with insurance companies because of the financial impact of the global pandemic and the resulting crisis. Therefore, insurers should work on proactively identifying the distribution gaps as well as potential acquisitions or partnerships that could offer avenues to new product types with a wide range of protection or new customer types like digital natives, and even new geographies.


    Though revamping the insurance distribution model will take time to implement, as it will involve employing new assets, tools, and substantial capability building that will affect other parts of the value chain, including the products and insurance claims. The next insurance distribution leaders can prepare for the new normal they start building the set-up for long-term imperatives today.

    Written By: PolicyBazaar - Updated: 29 July 2021

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