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Technology has changed the way people research, shop for, and even buy services and products. As an example, eMarketer predicted D2C eCommerce growth of almost 25 percent in 2020.  While responses to the coronavirus outbreak have prompted some of these changes in consumer behavior, most marketers believe that once people have grown accustomed to buying online, a lot of them won’t return to their old habits after the outbreak passes.

Find out how these changes have dramatically impacted the insurance industry and how any insurance carrier can digitally transform their own business to accelerate growth and retention.

How Any Carrier Can Access 21st-Century Insurtech to Accelerate Growth

Today’s consumers have learned to enjoy the benefits of internet research, social sharing, and online shopping and banking. Even typically conservative insurance companies responded by investing in the kinds of insurtech that help meet changing customer expectations and help them operate more efficiently. Most notably, many carriers have shifted their focus to direct-to-consumer, or DTC, products, instead of relying only upon networks of insurance agents to sell and service products.

The key to executing the shift to DTC is ensuring no loss of ease, convenience, or stability for the consumer. Transitioning to direct-to-consumer selling can relocate some of the burden of administrative work onto the consumer, if done improperly. Selecting the right partner to make that transition with you, maintaining the level of customer satisfaction you have achieved through traditional sales channels, is crucial. A big element of this will be the right software, but beyond software, you’ll need a partner with proven expertise and deep industry knowledge.

The Insurance Industry Shift Towards DTC Products

To see how the insurance industry has shifted towards DTC products, just look to the examples of auto and health insurance.

DTC Car Insurance Sales and Service

As one example, just 20 years ago, local independent or captive insurance agents processed 80 percent of car insurance policies, according to Quattro, an insurance marketing agency. Since then, the number of agents has declined. Local agents still have a role to play for many carriers; it’s just that this tech can also empower independent and captive agents to do more in less time, so this technology also helps them work more efficiently.

In the early part of this century, people still tended to think of their local agent as their insurance provider; however, today, they’re much more likely to think of the carrier as their source of insurance and service. Even people who purchase coverage from an agent tend to use the insurer’s website or 800 number as their source of policy and claims information.

Even if local agents still handle a book of business, they’re probably relieved that their customers can visit the website or call Jake from State Farm for late-night claims or minor service issues.

The DTC Shift for Health Insurance

Perhaps prompted somewhat by requirements of The Affordable Care Act and the example set by car insurance, health insurers have started to trend in the same direction. This doesn’t just include Marketplace health plans, mostly offered in a DTC model, but also such additional benefits as dental plans and in particular, travel and life insurance.

Many customers like the ability to compare, quote, and even buy insurance at their own convenience and without having to set aside time to make an appointment and perhaps, experience what they consider an uncomfortable sales call.

How Insurers and Customers Benefit From DTC Products

To understand how DTC insurance products help to offer today’s customers a satisfying experience, look at their changing behaviors. Consumers are connected to the internet, often using multiple devices through the course of the day. They take advantage of the democratization of knowledge and will research competitive offers online. They’re also socially connected and interested in suggestions from their network on social media.

DTC offerings meet consumers where they shop, removing barriers and increasing the chance that a customer will choose your product out of an understanding of its advantages.

How DTC Insurance Marketing Delivers the Right Customer Exposure and Experience

As an example, an Accenture survey uncovered these facts about healthcare consumers:

  • Interested in mobile health insurance offerings: 67 percent
  • Value social media opinions and advice about products: 48 percent
  • Already use phone apps to monitor health: 54 percent

About 10 years ago, GEICO enabled their customers to buy policies from their mobile phone. They also started sponsoring the sort of online experiences that their typical customers engage in, such as programs on Amazon’s streaming service. By shifting both their products and their presence, GEICO has overtaken Allstate in sales.

GEICO invested a lot in its disruptive business model. This is exactly the sort of marketing, enrollment, and service experience that the technology and representatives from Genius Avenue can provide for any carrier.

Using DTC Enrollment for Voluntary Benefits to Offer the Best Product at the Right Time

At first, insurers may think that DTC marketing only works for private plans and not the workplace. To counter this impression, LIMRA published a report arguing that DTC portals for voluntary benefits, such as life insurance, could help spark declining participation as well.

Certainly, carriers can benefit from the exposure that they gain during a workplace’s enrollment event. On the other hand, the LIMRA report reminds readers that employee’s needs for life insurance tend to revolve around circumstances such as getting married, having babies, or buying homes and not around their company’s open enrollment period.

With websites and phone apps that can help employees research, quote, and buy products in a way that’s both convenient or efficient for them and the carrier, there’s no reason to limit sales to a few days out of an entire year.

Combating Adverse Selection

Selling directly to consumers provides insurance carriers the most powerful tool available against adverse selection: accurate risk assessment.

By selling direct to consumers, insurance carriers are able to collect the information they need to accurately assess the risk that any individual applicant might hold. Group plans specifically prevent carriers from making those calculations, but with online underwriting, individual direct purchasing can create a perfect combination of low-touch, in-bound sales, and high accuracy assessment making it easier for carriers to sell policies while keeping risks manageable.

How Insurance Carriers View DTC Marketing

Naturally, all insurers don’t aim to eliminate the personal service that agents provide. They just hope to balance agencies, banks, and other channels with the online infrastructure that can expand their market position.

A 2019 insurer survey from A.M. Best found:

  • Over 30 percent of carriers said that DTC marketing offered them their most potentially lucrative opportunity to purse in the next year. No other proposed solution got as many positive responses.
  • In addition, 40 percent of respondents said they were at least considering adding DTC channels to their marketing. That answer ranked higher than not adding any new distribution channels or adding more fee-based advisors, banks, agents, or any other choice.

The report also mentioned that insurers mentioned improving customer experience and distribution as their most critical success factors in the next several months. They also hoped to work on improving analytic capabilities, innovation, and reducing administrative costs as important goals. A.M. Best reported that so many carriers planned to offer DTC products and services in order the achieve these goals. Those are exactly the kind of goals that Genius Avenue supports with both its platform and its people.

Why Smart Insurance Carriers Rely on Smart Insurtech

Insurance carriers don’t need to reinvent the wheel to offer insurance products directly to consumers. Not only does Genius Avenue technology simplify sales, it also enables member enrollment and administration. The platform includes live customer service and billing service, so there’s no need to make a large investment in manpower or infrastructure. Learn how Genius Avenue serves insurance carriers by expanding distribution opportunities and delivering on customer experience in a way that maximizes retention and lifetime value.

Contact Genuis Avenue today to ask questions and request a free demo.