How to Sell Insurance Direct-to-Consumer


Early this year, when the Interactive Advertising Bureau published research on a surge in “direct to consumer” (D2C) companies, it was talking about more than a smattering of startups. Companies like the eyewear pioneer Warby Parker aren’t just “interesting curiosities,” it said, but examples of “an enduring shift in the way the consumer economy operates.”

An enduring shift with major implications, not only for retail, but for insurance, too – and it touches on everything from distribution to product development to tech requirements to business strategy.

Insurance D2C, 101

D2C is everywhere. It’s in consumer brands like L’Oreal, packaged goods companies like High Ridge Brands; service businesses like Hilton; and insurance companies like Aetna, Cigna, MetLife, and over 100 others.

In all these industries, D2C – the business model in which the providers of goods and services sell directly to customers, rather than reaching them via a department store, boutique, or distribution network – is making waves.

According to Retail Dive, 81 percent of U.S. consumers will shop D2C within the next five years. Meanwhile in insurance, the trend is set to change just about everything about the business model.

But when it comes to D2C, it’s not the model that’s new. It’s the means.

What’s new, exactly?

“Companies have been selling insurance directly to consumers for over a hundred years, but it has not gained prominence until recently,” said University of Connecticut’s James Bonvicini in a white paper. “Back in the early 1800s, The Hartford became the first insurance company to pursue the idea of direct insurance selling methods.”

Funny to look to the 1800s for today’s hottest innovation. But Bonvicini has a point: the concept of D2C isn’t new at all. What’s innovative, rather, is the way that contemporary digital channels have supercharged it.

With online, mobile, and social tools to facilitate the sale of just about anything, anywhere, at any time, consumers have reset their expectations for shopping and buying. As mentioned, D2C is everywhere now, and that being the case, shoppers can get what they want faster, pay a lower price, and attain a sleeker, more convenient experience.

Insurers, get ready

No wonder, then, that these advances in technology and the “changing customer preferences” they inspire “are propelling significant shifts in insurance,” said the Insurance Governance Leadership Network (IGLN) in a recent report.

What exactly do those shifts affect?

  • The distribution landscape
  • The role of intermediary
  • The products

In a word, everything.

Each of these areas deserves a closer look, so in the coming weeks we will focus on each in turn. This article is part 1 of an 8-part series. Stay tuned. And, if D2C is of interest to you, start thinking about your policy administration system. Is it set up to handle direct-to-consumer? Silvervine is. Request a demo today.