How (and Why) Insurtech Solutions Are Leaning into Multi-channel Distribution

The future of life insurance is online, and in terms of distribution, agents are still king. These sound like contradictory realities, but they’re not. Here’s why. 

The truth is the new key to sustainable growth in the life insurance industry is hybrid multi-channel distribution strategies. In order to remain competitive in a quickly evolving landscape, life carriers must seek to be everywhere their customers are, with the technological agility to support whatever experience is needed.

Coforge summarizes this reality well in its multi-channel distribution white paper:
“Future-ready distribution must be designed around change, not locked into legacy structures.”

Insurers should look to adopt a ‘buyer’s choice’ distribution model, rather than investing too heavily in one channel over another.

We’ll explore how carriers are now using life insurance software to support a variety of buying journeys, with technology solutions to serve D2C, agent-led, and hybrid purchasing paths. 

Don’t leave money on the table: the hybrid approach 

The data clearly supports the efficacy of providing a hybrid buying experience for consumers.

Younger consumers prefer to buy online.

The preference for buying online continues to grow at a fast pace. According to LIMRA, 2023 was the first year a majority of Gen Z and Millennial respondents reported a preference for buying online over working with a financial professional. In response, more carriers are offering D2C digital life insurance customer journeys in an attempt to capture that market share. 

Many who start online, may still want (or expect) human support.

While younger applicants prefer to shop online, that data only tells half the story. According to the same report, 49% and 48% of Gen Z and Millennial respondents respectively say that while they look to start researching online, they ultimately expect to work with an agent to complete the process.

Investing in a hybrid distribution strategy is the smart play.

With about 100 million Americans currently in the “life insurance need gap” category — all with differing preferences and expectations  — a wider net approach is clearly the path to sustainable growth, while becoming too myopically focused on a singular channel risks undeserving key groups, and leaving money on the table. 

With a hybrid distribution model, carriers can service a variety of possible customer journeys, streamlining interactions for consumers who tend to value speed and convenience, giving agents the technology they need to deliver that same experience, and providing a pathway between those channels.

As LIMRA puts it, “identifying ways to expand distribution or using new technologies to improve existing distribution productivity are imperative to address the growing life insurance coverage gap in the U.S.”

The right insurtech platform can help carriers overcome technical barriers

Today’s customers often view seamlessness as table stakes, with the expectation being that they can start their journey one way and finish it another — all without having to change devices or starting from scratch. 

The tech lift to accomplish that in-house could be prohibitive. That’s why many carriers are turning to digital life insurance platform providers for help. The right partner can not only expedite modernization, but may already have solutions in development or on offer that would take the average life carrier 12 to 24 months to develop on their own. And with market forces evolving faster than ever, those months matter for ROI and the bottom line.

At Bestow, for example, our Recommendation Engine serves as a customer pathway add-on that allows carriers to provide applicants with real-time routing toward their best-fit products. With minimal data collected at the top of the funnel, we can help predict not only if a consumer is likely to be approved for a given product, but their propensity to buy, as well. This allows carriers to offer a range of product solutions to interested customers, from D2C journeys, to agent-led experiences with a broader product menu — they can even off board applicants to third party partners. After implementing our Recommendation Engine, one carrier partner saw a 5% lift in approval rate, part of a 20% increase in term life sales overall. 

Tools like this can help carriers improve funnel performance, close rate, customer experience, and even retention. In the case of a tool like Recommendation Engine, cost efficiencies can also be realized.

Automation reduces the challenges of multi-channel complexities

One of the biggest fears carriers face with a multi-channel approach is the potential complexity it could produce. More touchpoints can create more duplication, inconsistent workflows, and operational drag.

Again, the right life insurance technology partner can help alleviate these fears through automation. Here’s how:

• Life insurance process automation streamlines operations while keeping data synchronized across every channel.
• Insurance underwriting automation minimizes manual tasks, speeds up decisioning, and can improve risk outcomes.
• Direct channels benefit from personalized, rules‑based journeys, sometimes featuring multiple pathways.
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Overall, operational capacity across multiple channels is increased, while redundancies, tedium, and human error are reigned in. With automation in place, carriers can expand distribution without multiplying cost or risk. This integration can turn a multi-channel strategy from a complex pipedream into a competitive advantage. 

Conclusion: To boost growth and retention, be everywhere your customers are

The effective adoption of multi-channel distribution strategies will likely determine which carriers will stay relevant in the life insurance market over the next decade. A rigid, channel‑specific approach can create unnecessary friction in the buying process, which translates to drop off, stalled sales, and stymied growth. Meanwhile, competitors who offer more varied, fluid, and modern experiences will tend to capture coveted new market share in a highly competitive arena, boosting not just sales, but lifetime value, as well.

By investing in technology, or partnering with the right life insurance SaaS platform, carriers can leverage modern tech and data architecture as well as process automation to create a blended distribution model that serves existing, emerging, and evolving demands. 

Learn how Bestow can support your multi-channel strategy, no matter what the future looks like.

Our platform combines industry leading life insurance technology with extensive industry knowledge to help carriers enable better customer journeys and agent experiences. We give carriers not only the modern infrastructure they need for today, but the agility to adapt to tomorrow’s demands. Let's talk.