Digital Distribution Fuels Market Network for Insurers
Kathleen Garlasco | November 15, 2016
Perhaps the best-known market network is the interior design site Houzz. On its one-year anniversary, Houzz celebrated a significant milestone, as over 35 million monthly users tuned in to view a multitude of design ideas and options, as well as purchase products from retailers based on insights taken from the website.
Today, a similar market network is revolutionizing Property & Casualty insurance as a new option for carriers to sell and market products and for consumers to research and purchase coverage. This universal market network combines on-line channel engagement capabilities with a vast marketplace of products, allowing consumers to explore options and fulfill a wide variety of coverage needs to protect their investments and assets while carriers are positioned to meet more of the customer’s needs more of the time.
A One-Stop Shop
James Currier, a consultant to some of the most prevalent market networks such as HoneyBook, Houzz, and AngelList, says, “The time to adopt market networks is now. [Market networks] are hard products to get right, but the payoff is potentially massive.”
This is particularly relevant to the P&C insurance industry where today’s customer expects not only a seamless online experience, but also the ability to purchase insurance for all of their needs in one transaction. In fact, 79 percent of insurance customers reported that they want to consolidate their coverage with a single carrier, according to Mark Vallet in his blog on insurance.com.
Consider the customer with a multitude of insurance requirements. He or she may need homeowners, auto, pet, business liability, business owners’ policy (BOP), and more. The ability to offer this type of product-rich environment is a significant advantage of a universal market network, where insurance products from various carriers can be bundled to meet the exact needs and cost requirements of the customer. Carriers can sell to a larger pool of customers without taking on additional risk, yet provide a one-stop shopping experience.
Why a Universal Market Network?
In any industry, the top five companies have a customer retention rate between 93 to 95 percent. The average customer retention rate in the insurance industry is 10 percent below that mark, according to Lynn Thomas in a report for the Independent Insurance Agents of Dallas.
The main reason an insurance customer will switch providers is price. More than half of consumers would switch insurers to save $250 or less per year, according to Vallet, but increasing customer satisfaction can turn the tide. Research conducted by AT&T found that when customer satisfaction was at a “4,” 85 percent of customers stayed, and when it rose to a “5,” 92 percent remained with the company, according to Thomas.
A universal P&C market network gives carriers the opportunity to attain higher levels of customer satisfaction by fulfilling their complete insurance requirements. In addition, as insurers bundle their products with others available through the network, they retain 15 to 20 percent of the policy premium, making it a win-win situation for all parties. Customers receive a greater selection of personal and business products, allowing them to shop, bundle, and conduct business on their terms, with their provider of choice. Insurers realize expanded wallet share and customer retention. But these are not the only benefits a universal P&C market network offers.
Leveraging products that your organization didn’t manufacture can be a meaningful profit driver, as launching new products can be risky and expensive for insurers. Significant effort is required to conduct market research, determine risk, develop a potential product, and bring the product to market. A universal P&C market network reduces the risk for carriers while providing customers the products they need today and offers invaluable insight on which products may be worthy of consideration for future development.
Embracing Digital Distribution Tied to a Universal P&C Market Network
The first step for insurers who want to capitalize on a universal market network is to adopt a digital distribution platform that offers a rich set of P&C insurance products. Carriers that do can expect to see immediate benefits, including:
- 14 percent expansion in net premiums
- 24 percent increase in revenue over five years
- 12 percent jump in customer retention
- 8.5 percent boost in market share
It’s time for the insurance industry to reap the rewards of a universal P&C market network to capture greater customer wallet share, increase acquisition rates, and retain more existing clients.
Kathleen Garlasco is senior vice president of enterprise marketing for BOLT Solutions, Inc.
- Enterprise Architecture in an Agile World
- Top 10 Tips for Securing Your Mobile Devices and Sensitive Client Data
- Industry Insight: 4 Global Insurance Trends in Digital, Data, Content Services and Security
- Diving Deeper into Prioritizing Your Strategic Digital investments
- Why Content Rules
- How Mass Personalization Will Open the Small Business Benefits Market
- At Year End 2017, Will Your Organization Be Protected from Cyber Risks?
- Do Insurance Bots Dream of Mitigating Risk?
- Conditioned to Respond
- Managing & Mobilizing Insurance Data in a Connected World
- Race to the Finish Line
- New Tools, New Opportunities in Claims
- ITA LIVE: Reaching Insurance Industry Crossroads
- Advice to Insurance IT Leaders: Keep Your Eye on the Ball
- New Date, Venue for ITA LIVE 2017
- Guidewire Makes Major Push to Small and Midtier Market by Acquiring ISCS
- Insurance Disruption is Happening Right Now
- Insurity Adds Strategic Investment Partner, General Atlantic
- Beyond Transformation: The Convergence of Finance, Risk, and Actuarial Functions
- The Rapid Evolution of Consumer Protection Regulation
- Talent Hunt: Finding, Attracting, Retaining Top People
- Insurers Flexing Their Distribution Models
- Technology Driving Disruption in Insurance
- Fear of ‘Next Bubble’ Challenges Life, Annuity Carriers
- Technology Allows Commercial Lines Insurers to Stand Out
- Single Sign-on Viewed as Biggest Tech Challenge for Agencies
- ISCS Observes 20th Anniversary; Scurto Predicts Major Changes Ahead
- Policyholders and Their First Impressions
- Progressive Making Progress on the UBI Front
- High and Dry: Insurers Search for Disaster Recovery Plans
- Insurers Sign The (Un)Dotted Line
- Reflections of a Retired Insurance CIO
- Mobile Device Management Just One Answer to BYOD Issue
- Lessons from GEICO and Progressive on Winning the Critical Buying Stage
- You Are a Target for a Cyber Attack
- Web-based Systems are the Next Evolution in Claims Technology
- Gaining a “Wow” Experience from Web Users
- Time to Shift from Business/IT Alignment to Business/IT Alliance
- Healthcare Insurers Changing to Consumer Model
- Organization is the Key for Selecting Software Vendors
- Analysts Expound on the Needs of the Mid-tier Insurance Market
- Finding the Cure for Obamacare’s Website
- New Software Solutions Benefit Insurers on the Inside and Outside
- Products, Market Impede Investment in Systems for Life Insurers
- Combatting Cyber Threats: Predict, Prevent, Persist
- The Future of Telematics Heads Beyond Insurance
- The Shame in Cyber Security Lapses
- Building Policy Administration Systems for the Future
- Insurers Look Into The Eyes of Their Policyholders
- It’s a New Dawn for the ITA
INSURANCE IT NEWS
- Tower Selects EIS Group’s Insurance Platform to Drive Transformation
- NTUC Income Selects Majesco Distribution Management and Majesco Digital Solutions to Advance its Distribution Management Operation
- Emerson Reid Modernizes Its Business Processes With VUE Software
- Octo Telematics Powers CAA MyPace™ Pay-As-You-Go Program
- Announcing the Solartis Insure Microservice Hackathon
- DataCubes Completes Plug and Play Tech Accelerator Program
- Medical Mutual of Ohio Implements One Inc Digital Payments
- SUNZ Insurance in Production with Sapiens’ Workers’ Compensation CompSuite® Policy System
The Email Chat is a regular feature of the ITA Pro magazine and website. We send a series of questions to an insurance IT leader in search of thought-provoking responses on important issues facing the insurance industry.
ITA is pleased to present the 2014 Webinar Series. We have many topics for you to choose from and attendance is open to all ITA members. The webinar topics are current and exciting — ranging from predictive analytics to telematics and will focus on the direction insurance carriers need to follow for the future. All webinars are presented by insurance IT professionals along with some of the leading analysts and consultants in the field. There is no cost to attend an ITA webinar. For more information and to register for the webinar, click the “title” of the webinar below.
BLOGS AND COLUMNS
It has become a common refrain over the past few years to view the practice of enterprise architecture (EA) as something that time has passed by, much... READ MORE
One important trend in society over the past decade is our increasing ability to create and consume a seemingly unlimited amount of digital content... READ MORE
You have surely heard it said that small businesses are the growth engine for America. Today, the phrase has a special ring to it for benefits... READ MORE
With stagnant growth and lingering low interest rates, the life insurance industry faces a challenging future... READ MORE
Finding insurance carriers willing to write commercial lines risks has always been a challenge for producers... READ MORE
As Guidewire Software prepares for the start of Connections, its 11th annual user conference that begins on Nov. 2, Brian Desmond, chief marketing... READ MORE
Fraud detection has always been and will continue to be a critical component of claims management. Learning the lessons from current claims Straight... READ MORE
- Vendor Views