The necessary transformation of distribution models in insurance

If there’s one thing our insurance clients are asking us about these days, it’s the future of their distribution models.

In fact, in recent years, a combination of several phenomena has profoundly changed the relational behavior of customers and, in particular, their propensity to visit an office:

Obviously the COVID and the successive confinements that slowed down or even stopped the movements of clients…
… that have found a relief to carry out their operations thanks to the forced digitization of insurers and the development of the “remote”
changes in consumer trends, largely inspired by retailers, as well as changing social contexts (need for human relationships in parallel with digitization, demand for instantaneity, search for innovative experiences, climate and social awareness, and now the War in Ukraine and the result). inflation…)

All these elements translate into a profound change in customer expectations and relational behavior. As part of a study conducted with our partner Dynata at the end of 2021, we were able to measure the impact of these trends, in particular on the frequency of customer visits to branches:

Nearly half (45%) of customers believe they can do without face-to-face contact with their insurer after COVID
Among customers who visited a branch before COVID (at least once a year), more than 1 in 3 will go less often (35%)

The French are very attached to remote channels…

Despite the boom in digitization, our study shows that 1^Ahem The contact channel to interact with your insurer continues to be the telephone. Fast, easy to use and free of travel, the telephone is preferred by 38% of French people to interact with their insurer.

More generally, they mostly favor remote channels (55% for phone and email; 14% for Self-Care). This behavior is exacerbated for certain populations, in particular active customers under 45 years of age, who are less likely to travel during branch opening hours.

…But in this case, are the agencies doomed to disappear?

Luckily, we don’t think so! And massive branch reduction plans similar to those known in banking are not on the agenda. In fact, our study shows that the French are still very attached to physical contact; almost a third of French people say that the agency is still their preferred channel, especially older people. They favor this channel of human contact and the associated specialization in certain specific situations such as acts of subscription, management or termination in which their added value is perceived by customers. These elements are even more marked in certain products (Savings / Retirement in particular) that require a high level of experience and education.

On the other hand, the most characteristic motifs of the strengths of the client relationship (realization of an operation, suivi of a demand…) are advantages realized in “selfcare”, notamment pour des contrats avec une strong récurrence d’usage comme health.

Thus, our study clearly shows that the preferences of the different channels, beyond the averages, are specific according to the different customer segments (according to age and location in particular) but also according to the products and the procedures to be carried out. Therefore, one line of work for insurers is to fully understand current customer journeys and adjust the roles and prerogatives of different channels according to target customer journeys.

The axis of the relationship is not the agency but the advisor…

In fact, beyond face-to-face interactions, customers favor a relationship with an advisor, if possible a referent (for 60% of surveyed customers). These interactions can take place face to face, by phone or even by videoconference, in particular for young people who 69% are prepared to use this channel.

For this reason, insurers must rethink the role of advisors, especially in branches, to offer a close and human relationship, whether in person or remotely. This will likely require a change in culture, an evolution of activities and network tools so that they adapt to customer preferences and can manage spontaneous visits, phone calls and emails or physical appointments on the same day, as remotely, as well as back office. activities.

In conclusion, traditional insurers that often inherit large branch networks face many challenges:

In the short term, how to offer a human, remote and physical relationship and therefore maintain branches with sufficient staff to ensure “long” opening hours while remaining efficient?
More broadly and in the medium term, what place, what role and what added value of the agency in decidedly multi-channel models?

In our next points of view, we will try to show you some ways that deserve to be explored, from our experience or from other sectors such as retail: