Technology has changed how people research, shop for, and even buy products and services. As an example, eMarketer predicted D2C eCommerce growth of almost 25 percent in 2020. While responses to the coronavirus 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 Covid ends.

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 D2C, products, instead of relying only on networks of insurance agents to sell and service products.

The key to executing the shift to D2C is to ensure no loss of ease, convenience, or stability for the consumer. If done improperly, transitioning to direct-to-consumer selling can relocate some of the burden of administrative work onto the consumer. That’s why selecting the right partner to make that transition with you, thereby 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’s shift towards D2C products

To see how the insurance industry has shifted towards D2C products, just look at the auto and health insurance examples below.

D2C 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; but 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 phone 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 D2C shift for health insurance

Perhaps somewhat prompted by the 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 D2C model, but it also includes additional benefits like 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 – without having to set aside time to make an appointment and perhaps experience an uncomfortable sales call.

How insurers and customers benefit from D2C products

To understand how D2C 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, so they take advantage of the democratization of knowledge and research competitive offers online. They’re also socially connected and interested in suggestions from their network on social media.

D2C offerings meet consumers where they shop, removing barriers and increasing the chance that a customer will choose your product by understanding its advantages.

How D2C 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, and 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 D2C enrollment for voluntary benefits to offer the best product at the right time

At first, insurers may think that D2C marketing only works for private plans and not the workplace. To counter this impression, LIMRA published a report arguing that D2C portals for voluntary benefits, such as life insurance, could help spark declining participation as well.

Certainly, carriers can benefit from the exposure they gain during a workplace enrollment event. On the other hand, the LIMRA report reminds readers that employees’ life insurance needs 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 and efficient for them and the carrier, there’s no reason to limit sales to just a few days out of the year.

Combating adverse selection

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

By selling directly to consumers, insurance carriers can collect information they need to accurately assess the risk that any individual applicant might bring. 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 D2C marketing

Naturally, not all insurers 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 the following:

  • Over 30 percent of carriers said that D2C marketing offered them their most potentially lucrative opportunity to pursue 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 D2C channels to their marketing. That answer ranked higher than not adding any new distribution channels, adding more fee-based advisors, banks, and agents, or any other choice.

The report also stated 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 and innovation while reducing administrative costs. A.M. Best reported that many carriers plan to offer D2C products and services in order the achieve these goals, and these are exactly the kinds 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’s technology simplify sales, but it also enables member enrollment and administration. The platform includes live customer service and billing, 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 customer experience in a way that maximizes retention and lifetime value.

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