Channel strategy optimization – it’s all about the customers

Customer buying behavior and renewal behavior is changing rapidly in the insurance industry. Consumers are moving online in droves and at the same time they are becoming much more demanding. In response to this, more and more insurers are creating online channels.

Yet in my opinion that is not enough. Regardless of which channel they choose to do business in, an insurer must optimize it for the specific purpose it serves. If this is not done properly it will negatively affect customer experience and could end up losing the sale.

That's why mastering digital distribution capabilities is essential to running a customer-centric insurance business. If you do this right you will deliver more sales, operate more efficiently and harness the results of happier and more loyal customers. Now, let's look into the different aspects of channel distribution and identify the essential approach insurers must take to execute a successful multi-channel strategy.

Start with one and do it right

It's a tough job to reach and engage customers anywhere, anytime and on any device. You must reach them at the right time, in the right place with the right offer. Insurance has become a commodity. It's often added as an afterthought; an extra item tacked on at the end of the purchase of travel, appliances, phones or banking products. To make the most of this situation you must be able to address the various opportunities that the market holds for engaging customers in different situations.

It's important to understand that every single individual channel you choose to do business in will require you to master different key capabilities to be successful. Each channel – be it brokers, affiliates, aggregators, affinities, face-to-face, social media, tied agents or online – offers unique opportunities as well as stumbling blocks. To become the master of multi-channel distribution you must start with one channel at a time and carefully identify the set of capabilities it takes to be successful for the customer segment you address with it. Make sure you truly understand this baseline and you will be able to build a competitive edge and true customer-focus. Starting with one channel and mastering it is a pre-requisite for mastering multi-channel distribution.

Excel and exceed

We can see in the market that "good enough" is just not good enough any longer. You have to be the best in what you do – every day. It is a daily battle for an insurer to win an insurance customer; acquisition costs are higher than ever and it has never been easier for consumers to switch carriers. Doing just okay in any or all distribution channels is not going to cut it – you must excel in each and every single channel where you want to play. This means that you must exceed your customers' expectations. If you don't have the muscle to play across many channels all at once, start by getting the basics right so you win in one channel and grow from there.


You should start by identifying a set of critical capabilities for each channel you choose to pursue. This is basically a list of things that must be in place to become successful for that one specific channel. Whatever channel you deploy for your business model, you will have to make sure that you deliver on all the capabilities it takes to be successful in this channel. If you do it wrong or half-hearted you might start losing business – or even worse: attracting and gaining unprofitable customers.

Here are some typical key capabilities that you should consider for each channel you are planning to deploy:

  • Capacity – ability to handle large quote volumes
  • Flexibility – ability to integrate to other systems
  • Analytics – ability to do real-time analytics
  • Need identification – ability to cross- and up sell
  • Fraud identification – ability to detect and prevent fraud
  • Cost – Do you sit on an adequate cost base?

Become the master of digital channel distribution

There is a battle going on every day for insurers to win over new business and serve customers even better to keep them onboard. For insurers, mastering digital channels is critical to staying competitive but is often very challenging to make co-exist with existing business models that focus on traditional channels such as agents, call centers and brokers. When insurers get ready to drive business through a new channel, it's very important that they re-think the business model to make a better fit with the channel in mind, apply a customer perspective to establish a winning customer experience and identify the key capabilities required to succeed the new channel.

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