The Future of Insurance Distribution

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Reading Time: 4 minutes

Key Takeaways

  • Some of the factors that are influencing insurance distribution today are a) the resilience of intermediaries b) Rising customer expectations and c) elusiveness of building scale.

  • The pandemic has accelerated the shift to the digital medium more than ever before. Agents who were used to in-person interactions are rapidly adapting to online tools to provide uninterrupted services to their clients.

  • For decades, agents and brokers have been the choice channel of insurance distribution for customers and insurers. Customer expectations are moving towards a multi-channel world, thus challenging insurers to provide them with more options.

Simply put, insurance distribution is the way in which insurance reaches you, the end customer. The pandemic has changed the way insurers approach insurance distribution, compelling them to embrace the digital medium and its many tools. Insurers can prepare for what will come after COVID by coming up with a strategy that focuses on short and long-term implications.

In this article, we hope to give you an overview of the current trends and the ones that will be shaping the future of insurance distribution. Let’s get started.

Forces that are currently shaping insurance distribution:


Resilience of intermediaries


The COVID-19 pandemic has highlighted the resilience of intermediaries in the insurance sector such as agents, brokers, advisors who have flexibility in their adaptation to the digital environment and providing objective advice around risk management issues.

They have adapted to newer methods of communication and new ways to connect with the end-users. It goes on to show how quickly they can adapt to the situation.

Rising customer expectations


Another factor shaping insurance distribution is that customers now want more from their agents and other intermediaries. Their expectations have increased from wanting more ease in transacting to wanting more policy and quote options.

Insurance providers are listening to what clients want and are adding new tools to build new relationships to fulfil their expectations. However, this is a long drawn process and will require time. Digital-first companies are taking the lead here.


The elusiveness of building scale


With the pandemic disrupting distribution, it has become difficult for insurers to shift completely online for the fear of losing or alienating their existing customer base. Digital natives are bringing their strong preferences for online offerings and compelling insurers to bring a more direct and online insurance model. Brand building has become tough.

When it comes to buying insurance, trust and customer satisfaction has always been the most important factor. It becomes even more crucial in times of crisis, which is why people turn to bigger brands.

Trends we can see towards future of insurance distribution


1. Shift to using digital tools


The pandemic has accelerated the shift to the digital medium more than ever before. Agents who were used to in-person interactions are rapidly adapting to provide uninterrupted services to their clients through online tools, especially those who may be facing severe health or economic challenges.

The pandemic has increased the desire for comfort around digital and remote interaction models and tools for all – customers, agents and insurers. Today people can easily access anything from their devices via the Internet. They often use the Internet to collect information about a particular policy and compare it to other existing ones.


2. Shift towards self-service


With a greater shift towards using digital tools, clients are looking for more agency and self-service in the current environment. According to a consumer survey in Spain, access to insurance through the Internet has increased by almost 30 per cent since the pandemic started.

It has been challenging for insurance companies to maintain sales volume during the pandemic. Investing in self-service portals will also attract millennials to purchase insurance. This is something insurers will need to invest in – expansion and improvement of self-service tools for better agent satisfaction and customer support experience.


3.Transitioning offline processes online


Today, intermediaries like One Assure  and PolicyBazaar distribute insurance online. There are many processes that require offline execution – such as vehicle inspections and pre-medical tests for underwriting. To be able to fulfil the demands of consumers, agents and brokers will have to begin digitisation from existing distribution channels.

Digitisation of existing offline processes can be done by training insurance agents to use digital tools to interact with customers, provide agents with digitised tools to follow up with day-to-day processes, collaborating with direct channels and agents equally etc.

This will help improve customer convenience and help maintain the human component of offline, physical interactions.


4. Future of insurance distribution is multi-channel


For decades, agents and brokers have been the chosen channel of insurance distribution for customers and insurers. However, this is rapidly changing and shifting due to a change in consumer preferences and partner ecosystems. Customer expectations are moving towards a multi-channel world, thus challenging insurers to provide them more options, either directly or through partners. The thing with multi-channel distribution is that it improves the customer experience based on their terms, not the insurers.

The younger generation is more open to buying insurance from platforms such as fitness apps, auto manufacturer’s websites etc. apart from direct distribution from insurance companies.

5.Leaders making bold moves

Leading insurers are now announcing new partnerships which will increase customer satisfaction, expand distribution reach and their ability to buy insurance smoothly when needed. For example, Amazon India now offers auto insurance through an understanding with Acko General Insurance. They are providing car and motorbike insurance in India, and thus it marks Amazon’s entry into auto insurance in India.


6.Emergence of embedded insurance


Embedded insurance is when you buy a product or service and along with it, there is coverage or protection against theft, damage etc. Today, it is emerging as a new, seamless way of distributing insurance services. This provides a competitive advantage while reducing acquisition costs. It allows insurers to survive in today’s B2B2C environment.


7.Customer is king with sovereignty over their data


The use of bank data can create great value for customers, to customise products for them, but this can only happen if we presume that the customer has sovereignty over their data. Data-driven insurance is a high priority today. Insurers will be more successful if they are able to establish relationships of trust wherein customers agree to the opt-ins for such data.




We are heading towards a new era of insurance where market leaders are already experimenting with newer opportunities. Embracing the digital medium, insurers are now offering insurance when customers need it and where they want it. While being committed to using agents and brokers, insurers are now pursuing multi-channel distribution. Insurers who begin working on the short and long-term imperatives today will be ones who will turn out to be successful.

What changes do you see in the insurance distribution space? What change will you be exciting for you? Comment below and tell us!

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