A thoughtful perspective on changes that could be made to the way insurance distribution is conducted by McKinsey is at this link. This is a high level paper - not too long - on the main concepts and challenges. The best parts for me were:
- The discussion of the discomfort the customer feels about the purchase process. Insurers need to own the fact that purchase processes are uncomfortable. Currently the response has been one-dimensional - reduce questions, reduce underwriting, and offer simpler products. That is the right response for only a portion of the market. Advisers, and especially larger adviser businesses with the scale to engage in IT projects and partner with insurers to renovate the process should examine this more closely.
- The chart of the number of contacts between customer and service provider. On average a client with life insurance has only two contacts a year with their insurer, although I have probably had more like four with mine. The number rises to an average of 15 for health insurance. Both are very low compared to an average of 400 per year with social media, and about a hundred for a main banking relationship. That highlights an often-overlooked fact: insurance is a low involvement category. Some marketers behave otherwise, at their peril. The important thing to remember is not to treat raising the number of contacts as a goal, but to focus on the relevance and value-add at each point.
Link to the report.