Leveraging Open Distribution Channels in Insurance

By Apac CIO Outlook | Tuesday, August 04, 2020

Due to the digital revolution, technology has made giant strides towards remarkable advancement over the years. Everything that revolves around us somehow depends upon technology. Due to this historic turn of events along with constantly changing customer preferences and market scenario are making momentous shift across the insurance landscape as well. This significant bloom is mainly due to the macroeconomic environment, social and political factors and mass participation of companies across the globe. It is quite evident that there is a drastic change in the product design and customer service, the introduction of open architecture in the distribution channel is expected to deliver consumer benefits in the next few months. Although the open distribution channel has witnessed mixed response, new models like insurance marketing firms with their established agent advisers can change the way consumers interact with these distributors.

Open distribution allows consumers to select the best possible plans that fit their necessities as there are numerous life insurance companies under a single bank distributor. This not only boosts the competition but also reflects in the superior product design, pricing and customer satisfaction. However, from the long-term perspective, life insurers are battling to retain their customers, and cross-sells when need arises, producing a win-win scenario for the bank, customers and life insurer. Moreover, with legions of life insurance companies knocking around the corner, it is critical for the insurer to preach and formulate a policy that suits the demand of the customer in order to retain them. Additionally, open distribution provides a real-life working environment to improve the service standards and product solutions in the competitive market by making a continuous evaluation of the different providers across the horizon.