McKinsey: The multi access revolution in insurance sales

Executive summary:

The multi-access (r)evolution in insurance sales

Consumers expect a seamless, digitally enhanced experience across multiple access points and channels. Three different approaches can enable insurers to respond effectively.

Sales channels are changing 

Changes in customer behaviour are causing a fundamental shift in the insurance distribution model. Consumers are embracing digital channels, and their experiences with leading tech companies have also raised their expectations when buying insurance both online and offline. This trend will become more important as people shift to performing tasks of everyday life more remotely. A seamless, consistent “multi-access” experience across all touchpoints is now the standard that all companies must strive to meet. The bar is also being raised by insurtechs. Investments in insurtechs worldwide grew from $0.3 billion in 2003 to $5.8 billion in 2019, and the unique selling proposition of many emerging players is based on a digitally enhanced customer experience.

Major European carriers have been slow to move in this direction, similar to those in the United States; players in Asia, however, have established seamless linkages between digital platforms and tied agent channels. Even though the number of tied agents is declining—in Germany by 33% over the past 10 years, for example many insurers still rely on an exclusive network of intermediaries to handle frontline interactions. In addition, legacy IT systems hinder the implementation of digital technologies required for a seamless customer experience across channels.

Still, customers expect an upgrade. Every insurer addressing private customers will need to adopt a multi-access approach. How to achieve this transformation—and which aspects to focus on—will depend on the state of their current distribution models. To determine the best path forward, insurers should ensure they have a clear understanding of their organisation’s multi-access capabilities, target customers, and the competitive landscape.

Customers demand multi-access

Traditionally, insurance companies had agents and brokers designated as the primary interaction channel with their customers. This “100 percent” approach has all but disappeared. Now, customers demand multiple access points for engaging with their insurer along the customer journey (Exhibit 1). This mix of touchpoints makes consumer engagement much more complex. One survey found that 84 percent of German respondents use digital steps along the customer journey. At the same time, 55 percent cannot imagine actually buying an insurance product online. A majority of German customers prefers to switch channels within the customer journey.

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