What is the future of insurance distribution?

Guest blog post from Gilad Shai, Co-Author of the InsurTech Book.

Gilad Shai

Find the channel

The milkman was the primary distribution channel for dairy products for hundreds of years. In the 80’s this changed dramatically as the rise wholesale distribution cut the milkman’s market share dramatically. Today this distribution channel is being disrupted once more, due to changing consumer attitudes and new distribution methods facilitated by technological advancement. Consider the entry of cashew milk and “farm to table” apps.


In insurance today, the distribution methods are facing a similar upheaval. Products are being distributed through a variety of channels, with legacy methods being used alongside technologically-enabled new processes. New distribution channels are enabling InsurTech startups to sell old products more successfully than incumbents.


At the 2019 InsurTech Insights conference I had the pleasure of moderating a panel of industry leaders at the forefront of this trend. Their startups are creating new paths to distribute both old and new insurance products. Our discussion covered legacy, present and future distribution trends and the powers that shape them.

So you may ask, what’s new? The answer: a great deal. However, the fundamentals of selling insurance remains the same:

– Brand recognition
– Knowing your customer
– Finding the right channel

1. Brand Recognition

We are attracted to what we know. Familiarity is a dominant variable in our decision making process so it is not a surprise that insurance companies invest billions of dollars into the production of catchy ads, sponsor sports events, and provide strict design guidelines to store front agencies.

“Any customer can have a car painted any color that he wants so long as it is black.” — Henry Ford 1909

2. Knowing your customer

If you want to sell a product, any product, you need to understand the product, the market and your customers. The challenge with insurance products is that the coverage-price-risk triangle is rarely clear until the product has been in market for several years. Moreover, the metrics that we use to measure the success of the products (e.g. Combined Ratio and Loss Ratio) are high level KPIs that don’t shed a light on customer needs or usage. Policy holders are transforming from consumers to users; we should accept it and serve them. One of the methods to design a product for users is the usage of Personas.

Personas help us to understand, analyse and identify our main customers, and uncover what part our product plays in their lives. Personas help us to place a name and a face to our customers, and to ask hard questions where to sell, how to sell and what to sell.

3. Distributing through the right channel

Distributing through the right channel is a question of performance and matching current consumers’ expectations and behaviour. Will you sell the product via an agent, a website or a mobile app? Each channel will deliver new business but the certain channels will sell more. Insurers must pick the channel that you can not only find the target audience but also match their non-insurance needs.

New Approaches to Distribution

Today, the insurance industry works in a “pull” mode. The insurers are trying to pull the customers to their stores (physical or virtual) instead of being where and when the customer needs them. Insurance needs to be where people need it. It needs to provide people the financial safety net they desire as and when they need it, at a level of cover tailored to their needs.

By offering insurance at point-of-sale, point-of-interest, on-intent and when a customer gains a new variable of risk we, the insurance industry, are saying “Hey, there is a financial risk there. Do you want to hedge that risk?”. This is the future of insurance distribution.


* the writer of this post is the co-author of The InsurTech Book and founder of InsurTech LA, a community of entrepreneurs, investors, insurance professionals, developers, product managers and business strategists who take part in the raise of InsurTech and are involved in the insurance value chain.

Get in touch

If you have a smart, interesting, or down right bonkers idea about the future of -insurance distribution the InsurTech Gateway want to hear from you!

The Gateway incubator discovers and supports early stage ideas that respond to the emerging needs of the modern world, while raising the bar on efficiencies and trust for the market along the way. As the world’s first authorised InsurTech incubator, with an entrepreneurial twist, the Gateway is the fastest place to build and launch an InsurTech idea.

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Further reading:
MGAs: The fast track to insurance innovation? – Matthew Grant