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.
- Electronic Chat with Larissa Tosch
- Martha Notaras Will Join ITA LIVE 2019 as a Keynote Speaker
- Five Things to Consider When Evaluating Your Cyber Risk
- ITA Pro Magazine, January/February 2019
- Major Ransomware Attack Could Hit U.S. with $89B In Economic Damages
- ITA Announces 1st of Three Keynote Speakers at ITA LIVE 2019
- Electronic Chat with Jeroen Morrenhof
- Legacy Systems Are Dead. Really? Don't Count On It.
- Now Accepting Nominations for the 2019 ITA Bridge Awards
- It's time to register for ITA LIVE!
- Registration is Now Open for ITA LIVE 2019!
- What to Expect from a Digital Experience Platform Implementation
- ITA Pro Magazine September Edition is Now Available
- It's National IT Professionals Day
- Save the Date for ITA-LIVE 2019
- OneShield Software and UrbanStat Work Together to Improve Real-Time Analytics and Risk Decision-Making
- ITA LIVE 2019 - SAVE THE DATE!
- Insurance Technology Association Announces New Editor-in-Chief
- August 2018 Edition ITA Pro Magazine is Now Available
- 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
- Medical Malpractice Insurers Investing in Analytics and Emerging Tech in Face of Market Pressures, Says Novarica
- Insurtech AI Leader Betterview Appoints Dan Shoham, PhD, as Chief Science Officer
- Vermont Mutual Insurance Group Selects One Inc for Digital Payments
- Insurers Embracing Machine Vision for Underwriting and Claims, Says Novarica
- Nationwide partners with Slice Labs to develop on-demand auto insurance for rideshare drivers
- AM Best Requests Comments on Draft Criteria: Scoring and Assessing Innovation
- Majesco Acquires Insurance Software Business in India
- MEMIC Scholarship for Families of Injured Workers Now Accepting Applications
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 LIVE 2019
The tide is up! It's time to register for ITA LIVE 2019, our annual educational and networking conference! Our theme is "The InsurTech Revolution: Cutting Through the Hype." and we'll be bringing in a torrent of industry thought leaders, amazing insight and wonderful perspectives on the world of insurtech and its impact on the insurance landscape.
ITA LIVE 2019 will present real-life examples of true startup technologies that are helping insurers gain real advantage -- and a competitive edge -- in the marketplace. We’ll highlight the more successful InsurTech partnerships, while offering case studies that demonstrate exciting innovation and cutting-edge techniques impacting all aspects of the insurance ecosystem.
Ride the wave to LIVE 2019. Sign up today! We look forward to seeing you in May, 2019!
BLOGS AND COLUMNS
There are so many great advances in the area of smart homes and buildings, it makes me wonder what the actual impact has been, or what I might have... READ MORE
This month, the ITA celebrates Insurance Careers Month and encourages carriers, brokers, agents and our industry associations to plan their own... 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