Observations regarding the online / offline strategy for insurers
- Offline continues to be an important distribution channel despite the growth of online distribution. Life insurance is the main product that requires offline distribution e.g. digital-first new insurers like FWD allow customers to get a quotation for life products online, but they still require customers to complete the life product purchase offline, even though other non-life products can be purchased fully online.
- Traditional insurers are still investing into developing their offline distribution network e.g. all the above traditional insurers have developed digital tools to help agents, not replace them – many have said in interviews that they view tech as an enabler, not a replacement to human touch.
- New digital-first insurers seem to be expanding into offline channels too e.g. Singlife merged with Aviva and now their life insurance products have to be purchased offline.
- It is still possible for life insurance products to be purchased online e.g. Fi Life sells term life insurance fully online – quotation, declarations, KYC, payment all done online.
Refer to my previous post for the overview of some of these insurers.
My thoughts are that given current circumstances, an omni-channel strategy would be ideal for insurers at least for the next 10 years. The online aspect provides ease of access and greater reach to potential customers while the offline aspect provides the human touch which aids in feeling more secure and more understood. Regardless of future developments, it is unlikely that insurers will go fully offline given the many benefits of digital tools. However, it is unclear whether in future, as acceptance of digital channels increase and trust improves, we might see that going fully digital is the optimal strategy for insurers. The inertia to go fully digital is really strong though…
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