Digital distribution is making waves across all industries. In an increasingly digitized world, consumers have come to expect instant access to products and services. As consumers demand swift, effortless access to goods, businesses are finding new ways to meet their customers’ diverse needs. While some players are slow to adapt, executive leadership is increasingly aware that growth can only be sustained through digital distribution channels.
Business leaders across industries have driven and embraced the shift toward digital distribution and have seen lucrative results. Amazon, Netflix, and Apple are among those that have benefitted greatly by offering consumers greater access to products and services through online channels.
Growth potential is massive for organizations equipped to make the jump. Research indicates that while sectors with the lowest rates of digitization see unsurprisingly low growth, those with the highest rates of digitization (information technology, media, and professional services) see stronger growth than the U.S. economy as a whole. Unfortunately, the P&C insurance industry lags behind, receiving a digitization score of only 48 out of 100 possible points in a study by PwC – and scores vary greatly among carriers.
Digital distribution has the potential to be transformative for today’s P&C insurance industry. But challenges remain – according to a recent study by Bain & Company, nearly 50 percent of all insurance carriers say they “do not have a realistic plan for a digital transition.”
What’s more, there are cultural headwinds: research by PwC reveals that “70 percent of insurance CEOs – a higher percentage than in any other industry – see the speed of technological change as a threat to their growth prospects.” And digital distribution is a top concern of executives in the P&C insurance industry: by 2015, “distribution channels” ranked among the top ten concerns for the P&C insurance industry.
Negative attitudes toward technology and innovation are characteristics of laggards, no matter what the industry.
Technology is not the obstacle – business leaders understand that adapting to market demand is crucial for an organization’s longevity. Companies increasingly need to align their business objectives with digital channels to maximize their market reach and seize greater customer wallet share.
Implementing a successful strategy for digital distribution boils down to four key components: people, process, technology, and products. Insurers need a digital distribution platform that capitalizes on these four factors and makes the immediate transition into 21st century distribution possible. By delivering the products consumers want, when they want them, and through their preferred channel, CEOs across industries will be able to increase growth, sustain their competitive edge, and shift the focus where it belongs – to the consumer experience.
Digital transformation is inevitable – and laggards need to equip themselves with a digital distribution platform that supports 21st century growth. There are platforms available today that can take companies where they need to go – tools that snap into back-end systems for instant deployment, expand product offerings, and streamline customer interaction – all while offering goods and services through traditional and digital channels of engagement. Combined with the ingenuity of innovative leaders and an executive team that embraces technology, companies armed with the right digital distribution platform will position themselves to deliver strong corporate growth that drives market share, boosts customer wallet share, and fosters consumer loyalty and retention.
1. Manyika, James, Sree Ramaswamy, Somesh Khanna, Hugo Sarrazin, Gary Pinkus, Guru Sethupathy, and Andrew Yaffe. Digital America: A Tale of the Haves and Have-Mores. Rep. McKinsey Global Institute, Dec. 2015. Web. 28 Apr. 2016.
2. Müller, Florian, Henrik Naujoks, Harshveer Singh, Gunther Schwarz, and Andrew Schwedel. Global Digital Insurance Benchmarking Report 2015: Pathways to Success in a Digital World. Rep. Bain & Company, 2015. Web. 28 Apr. 2016.
3. Müller, Florian, Henrik Naujoks, Harshveer Singh, Gunther Schwarz, and Andrew Schwedel. Global Digital Insurance Benchmarking Report 2015: Pathways to Success in a Digital World. Rep. Bain & Company, 2015. Web. 28 Apr. 2016.
4. Yoder, Jamie, Anand Rao, and Stephen O’Hearn. Insurance 2020 & Beyond: Necessity Is the Mother of Reinvention. Rep. PwC, 2015. Web. 28 Apr. 2016.
5. Hilton, Andrew. Insurance Banana Skins 2015: CSFI Centre for the Study of Financial Innovation Insurance Banana Skins 2015 The CSFI Survey of the Risks Facing Insurers. Rep. PwC, Center for the Study of Financial Innovation (CSFI), 2015. Web. 27 Apr. 2015.
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Written by Kathleen Garlasco.