Direct to Customer in Insurance - Thematic Research

Direct to Customer in Insurance - Thematic Research

Summary

As digitization continues to shape customers’ attitudes and purchasing behaviors, insurers are being forced to rethink their distribution models and put a greater focus on the direct channel. For both non-life and life products, price and reputation are at the heart of the customer decision-making process. Established players have the largest market shares for direct sales, but new entrants have focused their efforts on the direct channel and have excelled at removing friction from the customer journey. This is helping them differentiate their brands. Most insurers continue to hold strong ties with intermediaries, but the prospect of improved margins will incentivize them to continue investing in the direct channel.

This report explores how the insurance industry has evolved from selling products almost solely via brokers and other intermediaries to more direct methods as consumers become increasingly connected. It highlights which business lines have been most commoditized, rendering them more suitable for direct and unadvised sales. It explores how insurers are changing their communication strategies in a bid to improve customer engagement and retention. The report also reveals which mediums and technologies have the potential to generate further opportunities to engage with customers and improve brand awareness.

Scope

  • The direct channel is experiencing the fastest growth with both non-life and life products, although it is still more prominent for the former.
  • Direct sales are also better established within personal lines than commercial products, as consumers’ willingness to pay for financial advice dissipates and online media facilitates direct interaction.
  • As the direct channel grows, insurers are putting a greater focus on the user experience and overall customer journey. Insurers are increasingly present across different media, including social media and messaging apps.
Reasons to Buy
  • Examine the size of the direct channel across selected key countries.
  • Understand the key factors contributing to the rapid growth of the direct channel.
  • Learn what insurance companies are doing to successfully communicate and engage with customers
  • Improve the customer journey and brand loyalty by understanding what matters to consumers.
  • Discover which are the most selected providers in the direct channel by non-life and life product lines (UK only).


  • Introduction
    • Customers are increasingly purchasing insurance directly
    • Leaders
    • Laggards
  • Players
    • Table Figure 1: Who are the players in the D2C theme within the insurance space?
  • Thematic briefing
    • What's the difference between the direct and indirect channels?
    • What's driving the direct channel?
  • Trends
    • Technology trends
      • Table Technology trends
    • Industry trends
      • Table Industry trends
    • Macroeconomic trends
      • Table Macroeconomic trends
    • Regulatory trends
      • Table Regulatory trends
  • Industry analysis
    • Changing customer behavior and digitization will foster growth of the direct channel
      • Table Figure 2: The direct channel's share of the distribution of insurance products will grow across Europe
    • The direct channel accounts for a third of general insurance GWP in the UK
      • Table Figure 3: The direct channel's share of the distribution of general insurance has grown in the UK
    • The direct channel is most important in motor insurance
      • Table Figure 4: The share of the direct channel has grown across all personal lines in the UK
    • The non-advised channel is the fastest growing in the distribution of life products
      • Table Figure 5: The non-advised channel is the fastest growing in the distribution of life insurance products
    • The non-advised channel dominates whole of life (guaranteed acceptance) policies
      • Table Figure 6: The share of the non-advised channel has grown across all life lines in the UK
    • More favorable pricing and brand reputation drive customers towards the direct channel
      • Table Figure 7: Price and brand reputation are the main reasons prompting consumers to buy directly from insurers
    • Customers most commonly use digital technology to buy policies from insurers
      • Table Figure 8: More than half of all customers purchasing policies directly from insurers use digital
    • Customers' openness to switching threatens brand loyalty
      • Table Figure 9: Many customers use price comparison sites to shop around for the best deal
    • SMEs are more likely to buy commercial insurance directly than large corporations
      • Table Figure 10: The direct channel is more popular with UK SMEs than non-SMEs, but is losing ground
      • Table Figure 11: UK SMEs in the construction industry are most likely to use the direct channel
    • Convenience appeals the most to SMEs but price remains an important factor
      • Table Figure 12: The ease of purchasing directly is the key reason why UK SMEs choose this channel to buy
    • Competitive analysis
      • Table Figure 13: Aviva holds a strong position in the direct channel across several insurance segments in the
      • Digital challengers are reinventing the way the insurance industry engages with customers
      • Digital challengers are excelling at simplifying the customer journey
        • Table Figure 14: Digital challengers talk in plain language and claim to provide authentic customer
      • Incumbent insurers with a strong focus on the direct channel spend heavily on advertising
        • Table Figure 15: Lemonade claims to have the world record for paying out the fastest claim at three seconds
      • Social media provides opportunities to drive brand awareness and engage with customers
        • Table Figure 16: Direct Line spends more on general insurance advertising than any other insurer
      • Some insurers deliver their products via messaging platforms
        • Table Figure 17: Insurers are paying more attention to social media and review sites as part of their D2C
    • Timeline
      • Table Figure 18: The D2C in insurance story
  • Value chain
    • Table Figure 19: The insurance industry value chain
    • Product development
    • Marketing and distribution
    • Underwriting and risk profiling
    • Claims management
  • Companies section
    • Public companies
      • Table Public companies
    • Private companies
      • Table Private companies
  • Glossary
    • Table Glossary
  • Further reading
  • Appendix: Our thematic research methodology
    • Viewing the world's data by themes makes it easier to make important decisions
    • Traditional research does a poor job of picking winners and losers
    • That is why we developed our "thematic engine"
    • How do we create our sector scorecards?
      • Table Figure 20: Our five-step approach for generating a sector scorecard
    • What is in our sector scorecards?
    • How do we score companies in our thematic screen?
    • How our research reports fit into our overall thematic research ecosystem
    • About GlobalData
    • Contact us
    • Research
    • Client Services
    • Disclaimer

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