Personal lines insurance rarely sticks with the status quo for long – think of the wealth of changes that have occurred in the past two years. Societal forces, such as the pandemic and inflation, paired with continuing changes across the industry, are pressing insurers to reevaluate their business priorities, strategies and investments, including their channel expansion plans for 2023 and beyond.
A new research report from SMA reveals that 85% of personal lines insurers are developing or deploying channel expansion strategies. Surveyed executives in the segment also shared their perspectives about channel partnerships, anticipated distribution changes and their distribution channel expansion plans, disclosing some key insights:
Consolidation is top of mind: Unsurprisingly, most executives see M&A activity in the agent and broker space as the most significant influence of distribution change over the next few years.
Insurtech partnerships remain vital: Insurers continue to team up with insurtechs for personal lines distribution, with more than 40% stating they have two to five insurtech partnerships in place today.
Direct business will increase: Personal lines insurers pioneered the direct-to-consumer business model many years ago. While the approach is widespread, nearly half of insurers indicate they have plans to increase direct via call centers, web or mobile.
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The research also makes it clear how vital independent agents and brokers are for personal lines distribution, especially when working with customers with complex or unique risks. Insurers must look at ways of strengthening and growing those partnerships, including providing the necessary capabilities for agents and brokers to succeed.
Given how quickly the landscape is evolving, we will likely have a very different channel environment in five years than the one we have today. But by evaluating strategies and proactively pursuing right-fit channel partnerships, personal lines insurers can tap into new opportunities and fortify against future potential challenges.
For more information on personal lines distribution expansion strategies, see our recent research report, "Channel Strategies for P&C Personal Lines: Plans for 2023 and Beyond." This report is part of SMA's research series based on surveys and interviews of insurers, agencies, brokers, MGAs and others in the distribution channel, including insights from ReSource Pro's large footprint of distribution clients.