Slicing a Generous Piece

On average, a consumer has approximately 5.2 insurance policies, covering life, home, auto, health, and other areas, according to Scott Mampre, a vice president of Capgemini. Since the average insurance carrier has between 1.1 and 1.5 of those policies, it doesn't take an actuary to figure out dramatic growth is possible if you are able to get access to some or all of those policies. And one way to accomplish that feat is through multi-network and multi-distribution strategies, contends Mampre.

For its World Insurance Report 2009, Capgemini went to 17 countries and talked to 59 executives from leading insurers and almost 2,300 distributors to get a closer look at the distribution habits of carriers.

Distribution of insurance products follows a consistent approach around the globe, reports Mampre. “We find the difference between international and domestic is that some of the specific characteristics are a little bit different,” he says.

Mampre notes in examining trends in the United States, the survey revealed that for 70 percent of respondents acquisition of new customers is high on their list of needs. On a global basis, though, that number is a bit higher at nearly 95 percent.

When questioned about increasing sales from existing customers, Mampre continues, 64 percent of U.S. insurers listed this as a priority compared with 48 percent of global insurers viewing it as a priority. “The focus tends to be generally the same as it comes to multi-distribution,” he says.

To Capgemini, multi-distribution means going into the marketplace with a strategy that allows for customer acquisition and support through various distribution channels, explains Mampre. “It might be the Internet; certain types of agents that work in certain types of markets; it could be through alliances with other carriers,” he says.

“The strategy is to put in place a number of different types of networks so you can maximize your exposure to potential consumers who fit within your strategic objective,” advises Mampre.

“If you want to focus only on high-touch, value-added services, the number of networks you would utilize would be smaller,” says Mampre. That would mean insurers would have access to a smaller percentage of the market because many consumers don't want that to be their core way of buying a product, he adds. “If you want access to 100 percent of the market, you have to look at the specialized networks and attract and retain agents through those different networks,” says Mampre.

Individual agents tend to focus on certain areas because those are what they know and what they like, according to Mampre. “If you take a look at the agency level, you may have multiple agents within an office, and one might specialize in life, one in health, and one in P&C,” he says.

For these types of agencies, it is important for the individual agents to share leads for the good of the agency as a whole. Not every agency is that strategic, though. “Some agencies are set up as all P&C or all life or all health,” says Mampre. “They are missing the opportunity to get that leverage across the entire marketplace.”

Why isn't there more sharing of information and more multi-distribution? Often carriers have a perception of agents in specific business lines that is either incorrect or can be modified and overcome, points out Mampre. Despite this perception, carriers have found ways to enhance the sales experience for both the consumer and the agent, he asserts, by leveraging the Internet as opposed to it being a threat to either party.

Mampre finds a number of things that can be done to enhance the multi-network distribution model. “SOA is one of the things that pull all this together,” he says. “If you are working in multiple networks, you have services you are providing for each network that have to come together and assess the information so one customer is viewed the same whether going through the life network or the P&C network. The infrastructure has to be such you can share information across the entire organization.”