Retail agencies and brokers are rethinking their channel partner strategies just as carriers and others across the distribution landscape do the same. Although carriers will always remain underwriting partners, more agencies are exploring new channel partners in the distribution ecosystem to ultimately reach customers and connect with carriers. New research from SMA finds that as options for channel relationships continue to expand, distributors across the personal and commercial lines segments are divided on the best approach for their businesses.
In 2022, agencies and brokers are not only turning to traditional partnerships, such as aggregators and banks or financial institutions, but are also exploring up-and-coming channels, such as insurtechs and digital agencies. The recent SMA research report, "Channel Strategies and Plans for P&C Agencies: A View of Commercial and Personal Lines Segments in 2022,” shows that very few agencies expect insurtechs to have a limited impact on their business. It follows that 52% of agents in the small commercial segment and 48% of agencies in personal lines fear the possibility of insurtechs encroaching on their business spaces. Thirty-two percent of agencies in mid/large commercial lines feel similarly.
While many agencies partner with insurtechs as solution providers, very few are currently planning to use digital agencies as channel partners within the next three years. Rather, most see them as competitors. However, SMA advises that insurtech will increasingly become a force, especially in mid/large commercial lines, as technology advancements make these risks more viable targets while also improving the systems and processes within this segment. This year and beyond, agencies will fiercely focus on channel expansion and assess their current partnerships. At the same time, insurers should also take a step back to review their agency partners and prioritize key relationships by understanding their growth plans and vital industry segments. In today’s quickly changing distribution landscape, insurers must stay abreast of new agency channel partnership opportunities and the benefits they offer.
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