Getting Strategic About Distribution

Putting the right product in the right place at the right time through embedded insurance has more potential than any other insurance innovation in recent memory.


The complexity of insurance policies and the often-deferred, if ever realized, benefit for the end user have traditionally meant that insurance is a product that is sold and not bought. But, as consumer preferences and buying behaviors change, insurance providers must be prepared to move toward a middle ground, aligning distribution strategies to meet the modern customer at the desired point of purchase. Insurers need to offer differentiated products and convenient ways to purchase insurance to capture the business and, perhaps more importantly, the loyalty of today’s consumers.

Right Product

Traditional insurance products are complex in terms of both actual product attributes and the accompanying policy language and therefore inherently prevent transparency. In fact, recent Bindable research showed that 86% of insurance customers wish there was greater transparency around policy pricing, and 82% would like greater insight into what exactly a policy covers.

Historically, insurance agents have acted as translators between the insurance company and the consumer. However, selling insurance products through non-traditional channels, such as via digital experiences or embedded offerings, often diminishes or modifies the role of the agent. As a result, insurers need to develop simplified products with more straightforward policy language to create seamless experiences, regardless of channel.

Creating more consumable insurance products begins with data. Beyond personally identifiable information (PII), which is most often submitted by policyholders, insurers today also have access to significant amounts of third-party data from varied sources, including social media, geolocation, telematics, wearables and smartphones. 

This quite naturally leads to the expectation that insurers will, and should, leverage that data to not only develop personalized insurance products but to also find other relevant products and discounts based on the “big picture” of the policyholder that the aggregated data presents. Keeping in mind that one product does not fit all risks, having a choice marketplace solution to ensure all potential insureds have an option for coverage is critical in “right sizing” the coverage for the customer.

Right Place

The rise of e-commerce in the early 2000s introduced direct-to-consumer (DTC) sales, and, suddenly, insurers had to change the way sales and service were handled via digital solutions. Over the years, additional channels have continued to emerge, leading to a distinct need for channel strategy. But, as often is the case, challenges lead to opportunities, and, as insurers’ channel strategies have required more sophistication, many providers today are leaning hard into the opportunity for embedded insurance. 

Putting the right product in the right place at the right time through embedded insurance has the potential to increase conversions and make insurance more streamlined than perhaps any other insurance innovation in recent memory. This is true, in part, because policyholders are open to it. According to Bindable’s research, 65% of consumers are willing to purchase insurance through a non-insurance brand, and, of those respondents, most would actually prefer to do business with a non-insurance brand over a traditional broker (72%) or an insurance company (64%). 

Let’s face it, convenience is king. With costs and inflation rising and consumers watching expenses, convenience may be the single biggest trigger for insurance purchases in the near future. When products and channels align, conversion rates increase and acquisition costs naturally drop. Considering how fierce the competition is among insurers for customer attention, (insurance keywords are among the most expensive in Google Ads and Bing Ads, some costing $50 or more per click), any chance one has for reducing the cost of acquiring a customer should not be ignored. Embedding an insurance proposition into an existing point-of-sale (PoS) has a significant impact on getting in front of the right customers.

See also: How to Experiment in Innovation Training

Right Customers

For insurers to achieve profitability, it is necessary to find a healthy mix of risk through customer acquisition and existing customer retention. But, in the midst of a hardening market, this is a tall task for most. To attract the right customers, providers must leverage the right tools, partnerships and processes to meet consumers at relevant engagement points throughout the customer journey. 

Through partnerships with trusted brands, insurers have the opportunity to co-opt a pre-existing relationship status with the most desirable customers. Starting from there, creating a premium customer experience inside a user-friendly digital environment can help, but leveraging the most advantageous channels through partnerships enables the mining of supplemental data that insurers might not otherwise get, improving customer acquisition in the process. Today, all this can be done in a white-labeled interface so the insurance proposition “lives” within a trusted source, ensuring a seamless experience for the consumer. 

The Future of Insurance Distribution

Emerging technologies enable insurers to use newfound treasure troves of data to streamline submissions, improve underwriting and reduce risk. Digitizing insurance processes from quote-to-bind; intelligently gathering, segmenting and using shared data; and embedding white-labeled insurance propositions into ecosystems of trusted brands are all key to easing the burden of acquiring customers and – even better – retaining them. 

With all this in mind, insurers must approach strategy and innovation more thoughtfully than in the past by considering not only what products are offered but also how the products are distributed to best reach the ever-elusive target customers.

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