PwC: Assisted distribution – Changing the face of insurance sales

Article Synopsis :

India’s insurance industry is growing up fast

India’s economic development has gone hand in hand with that of the insurance industry, says this report from PwC

The last decade has witnessed gross premiums grow at a compound annual growth rate of 6.2%, placing the Indian insurance industry within the pantheon of larger economies globally.

Customer behaviour is changing

One of the most significant changes during this period has been the shift in customer behaviour. Almost 25% of customers use digital channels to understand insurance products better and then to compare them.

Businesses have become more connected through the rapid adoption of the internet of things (IoT) and other devices.

Digital technologies offer access to information anytime and anywhere and competition has become fierce. Brand loyalty is a thing of the past, yet customers demand high quality, seamless service

Distribution channel gets access to digital services

Insurers have responded by enabling distribution partners and transforming the face-to-face sales model. This places the customer, instead of the products, at the centre of the process.

This does require deep understanding of the of a customer’s financial needs and their financial situation. The system must also be easy to use and allow immediate analysis of data so the agent may find the right solution.

In order for the model to be fit for purpose, there is a shift first to relationship based, then expertise based selling, rather than simply selling products.

There is also a shift from script-based selling skills, harnessing the power of behavioural science and then to demonstrating expert financial advisory skills. This requires strong market knowledge and an ability to interpret large amounts of data in order to provide advice.

Data is king

And so a more sophisticated advisory process has developed. Digital solutions process and model vast sums of data.

Distribution partners must be ready to use tools that give them a significant amount of economic, financial, demographic and behavioural data so they may offer data-driven advice.

Consumers are more discerning

Customers are also demanding more choices, more quickly and for less, too. Business is not so sticky and brand advocacy has fallen away considerably. It is therefore imperative for an organisation to create value-added propositions.

Insurers must focus on:

• a personalised and well-informed interaction
• an insightful journey
• a paperless environment
• integration with social media

This report examines these distribution challenges faced by the insurance sector and identifies the key considerations for defining a future operating model.

It suggests that layered assistance based on the specific needs of distribution partners will improve their sales efficiency and lead to better adoption.

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