How Insurance can prepare for the next distribution model

5 min readAug 29, 2020

The COVID-19 global pandemic has drastically changed the insurance distribution landscape. What was earlier considered an absolute essential for insurance agents — to meet their prospective customers face-to-face, is not possible today. The requirements of physical distancing and the quarantine measures adopted across the world has made it critical for insurers and their brokers to look at online channels to sustain and to grow their business.

While many insurers have already begun moving to digital channels, it is no easy task to make a rapid move. In the traditional insurance model, German insurers have reported a 40 percent decrease in new business and almost 50 percent of insurance brokers in the USA have confirmed that remotely building new customer channels was the biggest challenge facing them today. Meanwhile, online insurance aggregators and direct channels reported a similar, if not greater, volume.

The relationship of businesses with technology and remote interactions is in a state of constant flux and accelerating as the world moves towards the “next normal.” To address these challenges, insurers will need to re-imagine their distribution models across three key dimensions: customers, sales force, and technology enablers (data and digital tools). This will enable them to be prepared to take the unpredictable head-on.

The three key changes to distribution

Face-to-face interactions by the physical sales force and intermediaries still remain the primary channels of business for insurers across life, commercial, personal lines, property and casualty. Over the last decade, the share of business placed via these channels has seen a slight change with some customers opting to go online, the onset of COVID-19 has made this shift largely inevitable — for the immediate future at least.

Shifting digital tools

Agents and intermediaries are re-thinking their strategies and next steps to stay connected to their clients and provide uninterrupted service in the face of lockdowns, physical distancing and quarantines. We have seen that the number of physical meetings fall from a dependence of around 80 percent in January 2020 to around only 5 percent of agents who were able to manage a face-to-face interaction in May 2020. The current pandemic has made it imperative for customers and agents to reach a level of comfort with the digital and remote insurance interaction model and tools.

Moving towards self-service

The demand for self-service channels has seen an increase in demand from clients during the current environment. While digital access has definitely seen a spurt all over the world, the customers have not been satisfied with the delivery of digital insurance. The main reason given for the dissatisfaction faced by customers was that the tools were hard to use. There is a need for insurers to focus on improving the tools and their ease of use in order to satisfy customers and ensure that there are no difficulties faced by them especially at a time when face-to-face interactions remain a challenge.

Transitioning offline processes to online

Many insurance products still require traditional methods of completion before a purchase — for example physical signatures and medical underwriting. A recent survey showed that close to 50 percent of agents were dissatisfied with the capabilities of the signature function. Customers are also reluctant to undertake any physical aspect of the medical underwriting process with the danger of infection still looming large. Insurers must now focus on finding better and more efficient ways of underwriting the business — by meeting the current requirements of their agents and the customers — or risk losing business.

Distribution models — the strategies for change

The strategies for change in the distribution models require both short term as well as long term measures. In the short term, insurers will need to focus mainly on ensuring that their agents and intermediaries are well equipped to meet the requirements of customers through digital channels. They will also need to enhance the use of data and analytics for lead generation and for effective cross-selling. The three main areas of focus in the short term should be the customers, the sales force and the enablers (digital tools).

For the longer term, insurers need to consider three key areas for their digital distribution strategy:

  • Decide on the best channel mix — In the future, the requirement will be for insurers to have a robust setup that includes both digital as well as remote sales force options. This flexibility is much needed in the face of an unknown future.
  • Identification of suitable modifications and technologies — Insurers who see their core differentiators as tech and digital need to set up suitable modifications when setting up their agent channel to operate in a post-pandemic world. Appropriate tools to overcome current obstacles in signature collection, application and submission forms and client on-boarding need to be identified and developed.
  • Make strategic M&A decisions to augment distribution — Insurers must proactively identify any lacunae in their distribution ecosystem as well as look for potential partnerships and acquisitions that could bring in lines of business from new customer groups (such as digital natives) and new product types (such as broader protection products), or new geographies.

Changing the distribution operating model will not happen overnight. This not only needs new tools and assets to be deployed but also requires a great deal of capacity building throughout the value chain, such as products and claims. The distribution leaders that will lead in the post-pandemic normal will be the ones who strategise for both the short as well as the long term and begin their quest to build the necessary capabilities from today.

The Neutrinos Distribution suite is an end-to-end distribution solution that helps insurers leverage best-in-class technologies to enable a seamless experience for both the insurer and the customer. From Road Shows to Pre-Sales, from Lead Management to Financial needs analysis and EPOS, we provide customers with the means to make the path to purchase, one that is truly seamless.

Take a quick look at to see how our distribution suite has helped insurance companies around the world. Neutrinos has the experience and expertise to help clients on their digital transformation journey. Having worked with insurers all over the world, the Neutrinos value proposition is one that is robust and is easier to implement than you think. Ready to shift gears and get on to the fast track with the Neutrinos Distribution Suite? Call our experts to set up a discussion to walk you through our solutions today!