Customers now expect insurance to be as easy to buy as anything else they buy online: the right cover, available on their terms, with help on hand whenever they need it. That expectation is reshaping how insurance gets distributed, not just how it gets sold.
Insurance companies and MGAs are under pressure to re-imagine their distribution channels. They need streamlined ways to reach customers and strengthen their proposition, without wasting time and resources on costly R&D projects that may not turn out to be profitable.
The good news is that adding or updating a distribution channel no longer has to mean a costly R&D project. Modern modular insurance software lets MGAs and insurers set up automated workflows for broker-led, direct-to-consumer and embedded distribution on the same foundation, so each new channel builds on what is already in place rather than starting from scratch.
The future of insurance distribution methods
- Broker-led distribution: Brokers remain the backbone of insurance distribution, especially for complex, specialty and hard-to-place risks where customers want advice before they buy and for most MGAs this is the channel that carries the bulk of their business. Modernising broker-led distribution doesn’t mean replacing the relationship, it means removing the friction around it: digital submission and quote-and-bind journeys, faster turnaround times and clear, centralised control of broker access, commissions and payments.
- Direct distribution (direct-to-consumer): Direct insurance distribution lets customers buy insurance without an intermediary. Insurance brands retain complete control of policy terms through rules-based algorithms. For simple insurance plans, insurance management platforms can handle the entire customer journey, from initial quote to claims settlement, with little to no human input. An excellent option for MGAs or insurers who want to cut the cost of hiring intermediaries.
- Embedded insurance: Forecasts for embedded insurance’s growth by 2030 vary widely by methodology, with estimates ranging from roughly $280bn to $950bn in gross written premium and figures around $700bn a common mid-point. Whichever estimate proves closest, the direction is clear: it’s a popular distribution model for gadget insurance, where policy terms are simple enough to agree at the point of sale. Embedded insurance software enables carriers to manage these policies through low-touch, automated systems, a profitable option for tech brands or companies with little in-house insurance expertise. Platforms like Insly enable providers to work directly with insurance brands to ensure bolt-on cover is properly maintained through the customer lifecycle.
A note on buy-and-build: There’s been an uptick in private equity investment in the insurance industry, with investors employing buy-and-build strategies, buying and merging mid-sized portfolios to maximise profitability. This is not a standard distribution route, though: for most smaller MGAs, acquiring portfolios simply isn’t financially realistic. Treat it as an optional path for larger businesses with the financial backing to fund it, typically those backed by venture capital or private equity investors, rather than a strategy to plan around. Where it is on the table, automated insurance distribution tools make it easy to share policy management functions with third parties, so you can maintain secure systems and manage access as your brand progresses through an M&A process.
Strategies for modernising insurance product management
Expanding your distribution channels can help your company innovate and gain a competitive edge, but your distribution strategy has to work for all parties to transform your business model effectively. Here are three key areas worth focusing your time and investment.
Customer-centricity
Customers expect a simplified experience from the moment they interact with your ads, even while scrolling social media. Insurance management platforms like Insly can streamline the customer onboarding process from start to finish. For example, you can integrate your underwriting software with CRM systems, notifying customers when it’s time to review or renew a policy. Nora, Insly’s AI layer, can also cut the time it takes to process a submission by automating data extraction that would otherwise need a person to do it manually. Offering customers a personalised, digital-first experience is key to winning over younger insurance buyers.
Broker/third-party distribution channels
Brokers have always been the most popular distribution channel for riskier insurance products and that’s unlikely to change.
Consider the flexibility of your workforce and find ways to maximise your team’s expertise while minimising time spent on non-core tasks. Explore your options for working with third parties, internal sales desks and hybrid agents (using both physical and digital channels) to grow your business. Secure cloud system access is essential here. Insly provides a customisable MGA management system, letting you control broker access, commission rates and payment processing from one central dashboard.
Low-risk insurance product tools
Updating your distribution channels is a real challenge for firms still relying on legacy systems. Any insurance distribution strategy needs a plan for moving away from outdated workflows. Inslyoffers an affordable way to build your tech stack to meet your evolving distribution needs, with add-on services and API integration that don’t require coding experience. Investing in modular, low-risk product-building and distribution tools lets you make changes, analyse performance and update your proposition without burning time and budget on R&D.
Insly can help you expand your business’ capacity and cost-efficiency
With Insly’s low-risk insurance software, you can explore new distribution channels quickly while keeping complete control of your critical business data and IT costs.
Insly’s team traces its roots back over 25 years in insurance and insurtech, since Risto Rossar founded IIZI Insurance Brokers in 2000, with a sizable network of specialists across insurance and technology.
We work with 70+ MGAs and insurers and on average our customers handle double the gross written premium they managed on their previous systems.
