What makes Coca-Cola such a strong brand? Is it the taste or the price? I think it’s two things. On one hand it’s Coca-Cola’s massive name recognition, and on the other hand it’s its huge distribution network. Wherever you go, there’s a can of Coca-Cola for sale from the most indigenous areas to Times Square. Although consumers’ tastes change, distribution remains one of the driving forces behind Coca-Cola’s success.
Importance of distribution in the insurance sector
The same principle also applies to the insurance sector. Distribution is one of the most elementary components in the marketing mix. Product differentiation and toying with the price are mainly the focus of marketers, but if your product is not on the shelf then a portfolio won’t have any value.
Distribution channels have changed enormously since the internet era. Both direct and indirect channels have undergone a complete metamorphosis. People are less and less likely to take out an insurance policy through an intermediary. Nowadays, the web is taking over the role of these intermediaries, and in many cases, taking over their power.
The future of distribution channels
“Siri, can you find insurance for me?”
Maybe I’m lazy, but it sounds great to be able to ask my phone to find insurance for me. In one command, I can search both the direct and the indirect channels. I can actually search offline as well as online. Searching offline may sound slightly strange, but Google is already well on the way to having a computer make a reservation online via AI. The project has been named Google Dupex and Google is on track to getting a computer to actually communicate with people.
My phone knows me better than I know myself
What else will be possible in the future? Advances are likely to be in the application of technology, which can know and analyze more about me than I can myself. I turn to my phone, which can analyze behavior. Where do I live? How many hours did I sleep? Do I travel a lot for work? Am I loyal to my supermarket? My phone knows what I’m doing down to the last detail, assuring it has quality data about me.
Can I take this a step further? Absolutely! Since the advent of PSD2, it is possible to give an external party access to your bank details. This means that if I give my phone access to my payment data, I am not only given insight into my physical behavior – since my phone knows where I’ve been, how much I’ve slept and where I work – but also into my financial behavior. This will produce so much data that it isn’t possible for a human being to process it. Am I impulsive? Do I buy expensive stuff? Am I saving enough? If all this data can be included when taking out an insurance policy, then you will get the best product to suit your needs.
Responsibility
Getting a phone to look for insurance doesn’t just sound futuristic, it will also sound undesirable to policyholders and legislators. This is because a policyholder is not deciding for himself what is important to him. Who bears the responsibility? Is it some kind of “super execution-only model” or is it advice? The answer lies somewhere in between.
How do we link the future of distribution channels to the new digital insurance assistant?
I am a digital marketer. In my field, search engine optimization is just as important as oxygen is for living. For the layman, this means that I focus on findability. If you’re reading this blog, then I’ve done my job well. I believe that technology can find better insurance products for policyholders. Technology ensures better advice since more data is taken into consideration. However, just as in my field, the findability of an insurance product will soon be of vital importance. If your product can’t be found or if it isn’t “on the shelf,” then you won’t succeed. Perhaps in the future a new kind of job will be created: a “digital insurance policy search optimization specialist.” Until then, I wish you success in developing and using as many forms of distribution as possible.
About the author:
Mark Salm has more than eight years of experience in the insurance industry after graduating in marketing management. The subject of his thesis was decision-making behavior and the importance of product attributes for motor insurance. In 2014, he helped launch the first pay-how-you-drive propositions in the Netherlands and later worked as an insurance advisor. As a digital marketer, he helps insurers combat fraud in order to make insurance premiums as fair as possible.
