Library – PwC –Top insurance industry issues in 2021
Executive summary :
Three forces are shaping insurance distribution: the resilience of intermediaries, rising expectations among commercial and individual buyers and the elusiveness of building scale in direct channels (Figure 1).
Yes, these were factors a few years ago too. In fact, carriers built roadmaps to adapt their strategies accordingly. But the COVID-19 pandemic upended those plans, along with many others, by compressing timelines. In a matter of weeks, consumers and businesses began to shun in-person meetings and rely much more heavily on digital tools for research and communication.
Their perceptions of risk changed quickly, as did the kind of help they looked for when evaluating insurance products. And while some carriers were able to pivot, many continue to struggle and those multi-year roadmaps now look like wishful thinking. Let’s look at each of these three forces to see what’s happening, why it matters now and what you can do to turn it to your advantage.
Choose where to compete
We believe that insurers should be prepared to adjust their distribution models to effectively respond to a range of market trends, from the growth of direct sales to the morphing of what it means to be a broker. But it’s unrealistic to cover all the possible permutations because each path requires a specific investment in sales enablement and, often, technology integration. A group insurer, for instance, could choose to pursue the direct channel or sales to “garage-based” start-ups. It might address the needs of sophisticated brokers, and it might build and support multiple integration paths at once with different benefits administration platforms. Few carriers, if any, will do all this well at once.
How to prioritise? Define what really differentiates your company and be very clear about the specific capabilities you need to succeed at to support that identity.
Spot the challenges, spot the opportunities
Many insurance companies are starting with sales operating models that no longer accurately align to their customers’ needs. This was shifting even before the pandemic hit, but the disconnects are more obvious now.
In some sectors, for example, carriers remain heavily oriented toward in-person meetings while brokers are begging for a more virtual work environment. So what does success look like? Often, insurance executives don’t have adequate visibility into which clients to call on, how to make those calls, whether they have the right capacity, how productivity varies and how all these factors are changing as client behavior and needs evolve. That’s why the first step is often to create a baseline assessment of where they’re winning and where they’re lagging.
Take careful stock of the situation
In your assessment, you’ll want to hold structured discussions with your distribution partners to understand their goals and positioning. In looking beyond size and traditional territories, some companies find that they have been mapping their most effective sales resources against clients that aren’t likely to fulfil overall corporate goals.
Sales enablement isn’t a one-time review. It has to be iterative because the market itself keeps changing. You’ll want to create a process that continuously updates your assessment, collecting and assessing actionable metrics that go beyond revenue and client count. In particular, you should be able to quantify the value that you are bringing to your distribution partners.
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