Selling Insurance Direct-to-Consumer: The Product Impact


We’ve already seen how selling insurance direct-to-consumer will impact the distribution model and the role of agents and brokers; it will also bring about some profound changes in insurance products.

More delivery models

According to  Insurance Governance Leadership Network (IGLN) research, the methods of delivery will splinter insurance products into several types: do it for you, do it with you, and do it yourself. “This sort of approach allows insurers to access a wider variety of segments within the market, and to cater to customers more specifically and efficiently,” IGLN said.

Greater blend of products and services

IGLN also noted that the mix will expand, setting the traditional product-only offering alongside hybrid products that come with usage-based  or prevention services. “Whatever form the business model takes, participants emphasized the need to keep the model flexible,” IGLN said.

Simpler products

When insurance products are sold directly to consumers, they need to be simple enough to be comprehensible. If a product is so complex that a customer can’t wrap their mind around it, no one wins. Transparency and ease of use are the name of the game.

Simplifying complex decisions

As we saw earlier, there is definitely still a place for agents in D2C when situations and products are complex enough to warrant their expertise. But even where complex products are concerned, the new model will likely make waves. With a smart digital guidance system configured to lead customers from one question to the next, even a highly complex decision can be broken into simple components.

In other words, it’s “not the number of choices that paralyzes, but how those choices are presented,” according to Slayton Search.

Interactive tools

This is where the value of technology really brings to bear. As Slayton put it: “With better technology, designed with user experience in mind, customers can potentially be presented with hundreds of choices but in a way that makes it easy to compare, refine, and understand the value of each one.”

When the D2C model is equipped with the right technology, insurers can realize new opportunities to broaden their offerings, drive up customer satisfaction and retention, and deliver a stronger return on investment.

So much for impacts. Now that we’ve covered the changes that D2C will bring to distribution, intermediaries, and products, it’s time to explore how all this will shake out in terms of constraints, strategy, and tech requirements. Stay tuned for our next D2C blog article. In the meantime, you can download our comprehensive Direct 2 Consumer Blueprint for Insurers.