Insurers Hunting for Distribution Channel Innovations

Always with an eye toward the best possible way to market and disseminate their products, a large percentage of insurers are currently seeking new products and services to add to their distribution channels in the coming year.

Based on new survey results from Inter-Company Marketing Group (ICMG), a non-profit organization that fosters business networking for insurance strategic alliances, 66% of carriers are on the prowl for distribution channel innovations.

The survey, which polled 53 insurers, found that carriers are casting about for a wide variety of insurance products for their distribution systems, with the most frequently cited being life insurance, cancer or critical illness, annuities, Medicare-related products and property/casualty insurance.

While 70% of the survey respondents already offer non-core products and services to their distribution channel(s), either from outside sources (imported) or in-house sources (manufactured), product diversification, cross-selling and agent recruitment are the main reasons why carriers offer non-core insurance products, ICMG says.

Respondents pointed to the independent agent channel as perhaps the most promising distribution channel—they believed it the best for distribution retention, product persistency and product placement ratios, ICMG says. The only distribution systems that scored higher among the respondents in any aspect were career agents, who scored highest for development of brand identity and Internet distribution, which scored highest for return on investment.

The most frequently cited distribution channels currently used were independent agents, call center/telemarketing, broker-dealers, direct-to-consumer and the Internet, ICMG adds.

Survey respondents included primarily ICMG members who are executive, product, marketing, actuarial and distribution decision makers with their insurance firms.