Can traditional channels keep pace with the new-age digital insurer?

Insurance traditionally has been sold through physical channels i.e. Agents or Brokers, hence termed as ‘traditional channel’. This requires an experienced skillset, physical touchpoints with the customer, a detailed understanding of the needs assessed onsite, and complete understanding of the varied products on offer – and then bundling those paper-based offerings to present to the customer.

With the advent of digital technologies and heightened awareness of the digital customer, traditional channels are struggling to keep pace with the new-age digital insurer. It requires a radical shift towards providing experience platforms which distribution channels can use to build the customer base.


  1. Slow manual approach to engage the customer
  2. Personalization of products is complicated and complex
  3. Digital awareness of agents is limited
  4. Contextual behavior of customer is not present, hence a one-size-fits-all approach to the customer
  5. Underwriting and operational expenses are increasing, hence costs on traditional insurance products are inevitably going to be higher
  6. Agents recruitment and training (skilled workforce)

Digital Distribution - Trends and Focus Areas

The above challenges call for a new and innovative approach to distribution, which includes building integrated digital distribution platform to serve these needs:

  • Contextual Customer – a personalized view of the customer with 360* is important to understand what are the needs of the customer, how are they buying, why are they buying, when are they buying and what triggers the event which requires insurance needs. Every customer's needs are a bit different and therefore using data and analytics (social, structured, unstructured) to form the target strategy and customer segmentation is crucial.
  • Personalized Products – lighter products which can be personalized based on customer needs will be the need of the hour. The digital distribution platform will have richer features to tailor the product on the fly based on how customers proceed through the buying cycle. These personalized products can be tailored based on the why and the how of the customer needs – not just on the what.
  • Personalized customer communication – every customer wants to listen in a different way, and communication (alerts, tips, newsletters, campaigns, offers) needs to be tailored based on the behavioral patterns of the customer. If a certain event occurs in the customer life span (commercial or personal), the platform needs pick up these events and tailor the communication or offer, so that customer receives a specific experience based on their business or personal needs.
  • Point-of-Sale Experience – the distribution platform needs to bundle simpler features like 1-Step Personalized Quote, e-Proposal, e-Renewal, e-Submission, so that the customer doesn’t have to deal with a monolithic paperwork experience. Selling cost can be dramatically brought down if the sales platform has critical functions enabled online (app, browser), including reducing the error ratios.
  • Straight-Through Processing – STP is crucial for the distribution platform, either selling new policies, managing claims or for the renewal process. The STP journey integrates all the critical processes in the submission process, reducing the Turn Around Time (TAT). 
  • Cross-Sell Feature  the distribution platform is not complete if the lead generation and cross-sell feature is not managed effectively. Cross-Sell or Up-sell is driven by certain scientific rule-sets based on the data managed by the insurer. Certain event changes, segment changes, profile changes or behavioral changes should trigger the data mining (and social analytics) set to constantly churn the data and propose to the agent about the new lead or cross-sell opportunity. The cross-sell opportunity can be easily made available in the agent dashboard with the Next Best Action (NBA). 
  • Gamification – when agents deal with millennial customers (especially personal insurance), long drawn screens and flows can be boring. Providing intuition-based gamification, which can create added interest with the customer, will be required. The gamification process will be linked to the sales journey through the platform, which takes the customer through sales processes in a fun way.
  • Regulation and Compliance – managing compliance checks (contract-related, disclosures) at the backend of the sales process (after the submission) will yield increased errors, return of sale, higher cost, etc. The distribution platform needs to be designed so that all mandatory regulatory & compliance checks are managed at the point of sale, through relevant error-handling.
  • Remote Assistance – With the advent of cheaper communication technologies, video-chat, co-browsing, messaging; communication is not restricted to voice, SMS or email communication. Unified communication is an integral part of the distribution platform where customers can be managed remotely without any delay or inconvenience.

How Digital Distribution can help?

The Digital Distribution channel is equipped with digital technology to engage the customer continuously and with the right tools (like co-browsing, video chat etc.) to operate and support remotely. The Distribution platform will have access to a similar set of services to help in face-to-face interactions with the customer. At the core of the solution are social analytics, lead generation, click analytics and customer insight generation. This enables automated context generation and insights into the customer automatically, to scale and help in Direct Distribution without agent intervention.

Unified customer data and document management helps in process simplification and helps in integrating multiple channels for cross-sell and up-sell of insurance products. Self-service will be strengthened using mobile integration for customers on the move. The same infrastructure can be extended to partners through integration (API gateways) for innovative business models with partners. The core policy and claims management will be integrated along with the social analytics, unified customer data and partner management through various tools.

Experience Design

When re-engineering or building a new digital distribution platform, the following experience needs to be properly thought through and aligned with the overall business strategy. It can be easily ported into Minimal Viable Products (MVP) if required, through Design Thinking workshops. The Experience Design ownership doesn’t only sit with IT – it needs constant collaboration from the overall organization ecosystem:

  • Buying Experience
  • Communication (or Marketing) Experience
  • Policy Service Experience
  • Claims Experience
  • Renewal Experience

Winning Themes – for Adoption

Like it or not, change is always difficult to accept or chew. Even the best distribution platform, if not properly adopted, will fall crushingly short of its objectives. What will be crucial is how the change management and adoption of the platform goes through the distribution ecosystem. ROI only depends on adoption and effective use – nothing else. Some of the winning themes are illustrated below:

  • Training, training and more training – nothing should be left to be assumed
  • Incentivization scheme for agents, for better use of the platform
  • More connected agents with the customer – face-to-face or remotely
  • Easier and personalized products for agents to offer to the customer based on tailored needs
  • Increased cross-sell opportunities and increased cross-sell revenue
  • Reduction of error rates and improved operational efficiency
  • Derive intelligence from unstructured social interactions, customer transactions, issues and product preferences, and integrate customer and product data for Customer Insights (or 360-degree view of the customer)
  • Personalized, relevant and targeted campaign generation and communication