Modern consumers expect to be able to buy pretty much everything online, directly from the source. It’s the direct-to-consumer sales trend, and it’s impacting the insurance industry just like it’s impacting retailers. Insurers should act now if they want to grab their market share.

Why Is the D2C Model Taking Off?

Today’s consumers are tech-savvy and independent. Whether they’re doing home improvements or drafting their last will and testament, many take a do-it-yourself approach.

In insurance, this means cutting out the middleman – i.e., the agent or broker – and purchasing coverage directly from the insurance company. The result? The D2C market is booming.

D2C Insurance Trends

If you’ve been paying attention to insurance studies, you’ve probably already noticed that D2C sales keep popping up.

For example, the J.D. Power 2020 U.S. Auto Insurance Study found that insurance company websites were more important than agents in terms of customer satisfaction with client interaction and service for the first time.

But that’s about customer service metrics. You might be wondering about actual sales. Well, the J.D. Power 2020 U.S. Insurance Shopping Study found that Geico and Progressive had captured approximately 92% of premium growth in the past year – and it was no coincidence that both of these companies had embraced the D2C sales model.

The Direct to Consumer (D2C) in Insurance, 2020 Thematic research Report from ResearchAndMarkets.com says that the direct channel is experience the fastest growth for both non-life and life products. Meanwhile, McKinsey & Company says that direct sales have grown from a €13 billion industry to a €24 billion industry in 10 years, and nearly half of direct insurers outperform non-direct insurers in terms of growth by 6.3 percent.

Get Your Piece of the Pie

The numbers make it clear. The D2C insurance sales model is here, and it looks like it’s here to stay. Insurers should take key steps now – before they get left behind.

  • Embrace the model. The insurance industry is changing and accepting that is the first step toward staying competitive.
  • Develop the right tech. Insurance buyers will be looking for online quotes and other digital tools to make shopping easy. Arm yourself with the right tech, including quote engines, instant messengers, websites and apps.
  • Exceed customer service expectations. When you’re dealing with customers directly, you can’t afford to deliver subpar customer service. Provide helpful responses to consumer inquiries – and do it fast.
  • Find a flexible BPO partner. Taking on new projects and growing your business can be difficult, especially if you’re trying to do it without sacrificing customer service or if you don’t want to watch your expenses skyrocket. Sometimes, if you want to do it all, you need to find a flexible BPO to help you. That partner is Covenir. With Covenir, it’s never an all or nothing proposition. We can handle it all, or we can co-exist with your team or just manage specific tasks. We can even back-up other service providers. Let us know what you need.

Case in Point:

Read this Case Study to learn how we supported one insurer’s direct-to-consumer sales efforts.