Aspire Systems insurance wp Page 5
Internet Strategy for Insurance Companies
Distribution
Insurers naturally face the difficult question of what the distribution systems of the future will look like.
There is a tendency to believe that "what we have today, we'll have tomorrow." This is a dangerous
assumption. Many insurers are so tied to existing distribution systems that they are reluctant to
recognize the reality that the sale of insurance products will require multiple channels:
Traditional
Alliances
- Agencies/ Brokers
- Marketing partnerships
- Sophisticated needs/products
- Insurers
- Complex risk management
- Banks
products
- Retail
- Credit Unions
- Employer Coalitions
Consumer Direct
Business Direct
- Convenience
- Convenience
- Value
- Value
- Speed
- Speed
- "Customized" in appearance/
- "Customized" in appearance/
standard in practice
standard in practice
- Products match markets
- Worksite marketing
Each of these channels will coexist. All of them will have the need to exploit net based technologies
to dramatically improve service and reduce costs. This means tailoring products to fit appropriate
distribution channels. The power of selling consumer and business products direct through the
Internet is illustrated in this table:
Life Insurance Distribution Costs per $100 of New Premium
* Booz-Allen & Hamilton Internet Survey of Multi-Line Insurers, 1997
0
50
100
150
200
Internet
Direct
Broker
Career Agent
Independent Agent
Managerial
3
