Specifically, technology tends to drive improvement in the functional category. Humans and the agency model are better at the others-particularly the emotional values such as providing a sense of safety or security. Personal and social impact – What does it do to me and to society?ĭirect distribution and digital innovation are both great at delivering functional values such as saving time, saving money, or making tasks easier.While the list of things a hypothetical customer might value in a product or service is of infinite theoretical length, you could sort that list into three categories: It all comes down to consumer preference. LEARN MORE The human touch in a digital world Find out more in our latest report: Reimagining insurance: The new cloud imperative. Insurers migrating to the cloud at scale are gaining savings and agility across the insurance enterprise. Why have agents been so resilient in the face of all the digital change and business model innovation fueling the predictions of a direct-dominated future? This raises an important question for understanding the industry today and its future course. Even the impact of COVID-19 doesn’t appear to have accelerated a shift into the direct channel, based on early results. The result of all this is that exclusive and independent agents still control about 80% of the homeowner market and 65% of the personal auto market. If agents are really on the verge of extinction, someone ought to tell insurance consumers. Likewise, consumers are generally satisfied with the service they receive from agents with 75% reporting they are either satisfied or very satisfied in 2020, up from 73% in 2018. Other forms of interaction such as smartphone apps, instant messaging and automated phone channels trail well behind. Consumers’ top three preferences for interactions are: 1) live telephone, 2) online service, and 3) in-person. Within the agency channel, independent agents have fared a little better than exclusive agents, losing only six points in auto while maintaining the same share of homeowners (more on this in a future blog).ĭata from Accenture’s biannual global financial services consumer study also suggests that demand and satisfaction for agents is robust across insurance. The balance of share went to “other” distribution channels such as banks, other forms of retail, and partnerships-many of which involve a local distribution footprint. Of note, agency share declined faster than direct grew in both lines. The agency channel saw its auto market share decline 15 points during this time, while its share of homeowners dropped 16 points. In homeowners’ insurance, the direct channel has gained nine points of share in the last 20 years, and only two points of share in the last seven years But it has gained only one point of share in the last seven years. Direct distribution gained 10 points share in the last 20 years, growing from 20% market share to roughly 30% today.

Let’s look briefly at some Accenture data on the personal auto and homeowner market for proof.ĭirect share in auto insurance has plateaued. While the direct channel has taken significant share over this time, agents still own the lion’s share of the market and remain indispensable for insurance. How carriers can maximize agent performanceĮxperts have been predicting the demise of the insurance agent for a while now-almost since I first entered this business over 30 years ago.Explaining the surprising endurance of the insurance agent.

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