Heather is the Lead Research Analyst at ReSource Pro Consulting.
The distribution landscape is evolving, and retail agencies and brokers are rethinking their channel partner strategies just as carriers and others across the distribution landscape do the same. Although carriers will always remain underwriting partners, more agencies are exploring new channel partners in the distribution ecosystem to ultimately reach customers and connect with carriers.
Insurtech and Digital Agencies Impacting the Distribution Space
Research from ReSource Pro Consulting finds that as options for channel relationships continue to expand, distributors across the personal and commercial lines segments are divided on the best approach for their businesses.
In 2022, agencies and brokers are not only turning to traditional partnerships, such as aggregators and banks or financial institutions, but they are also exploring up-and-coming channels, such as insurtechs and digital agencies. The ReSource Pro Consulting research report, “Channel Strategies and Plans for P&C Agencies: A View of Commercial and Personal Lines Segments in 2022,” shows that very few agencies expect insurtechs to have a limited impact on their business. It follows that 52% of agents in the small commercial segment and 48% of agencies in personal lines fear the possibility of insurtechs encroaching on their business spaces. Thirty-two percent of agencies in mid/large commercial lines feel similarly.
While many agencies partner with insurtechs as solution providers, very few are currently planning to use digital agencies as channel partners within the next three years. Rather, most see them as competitors. However, we advise that insurtech will increasingly become a force, especially in mid/large commercial lines, as technology advancements make these risks more viable targets while also improving the systems and processes within this segment.
Insurers Must Assess Their Relationships and Seek Out Opportunities
This year and beyond, agencies will fiercely focus on channel expansion and assess their current partnerships. At the same time, insurers should also take a step back to review their agency partners and prioritize key relationships by understanding their growth plans and vital industry segments. In today’s quickly changing distribution landscape, insurers must stay abreast of new agency channel partnership opportunities and the benefits they offer.
For more information on agency channel strategies, see our research report, “Channel Strategies and Plans for P&C Agencies: A View of Commercial and Personal Lines Segments in 2022,” which includes findings from a survey of agency and broker executives on their current and future channel expansion strategies. This report is part of ReSource Pro Consulting’s research series designed to provide actionable insights for carriers on distributor plans and expectations. A regular series of research reports is being published based on surveys and interviews of agencies, brokers, MGAs, and others in the distribution channel, including insights from ReSource Pro’s large footprint of distribution clients.
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