Tom Lyons shares his thoughts on how distribution is evolving in insurance

“Insurance is more complex than many people realize“

Tom Lyons, Chief Operating Officer, Direct Response Channel at Plymouth Rock Assurance

Insurance Innovators spoke to Tom Lyons about insurance distribution, how customers expect to interact with carriers, and how carriers can bring added value to the customer and the point of distribution.

How do you see insurance distribution evolving over the next 5 years? Is a major overhaul likely?

T.L. I believe insurance distribution will continue to evolve, by giving consumers a personalized experience through digital marketing channels and technology.  We are already starting to observe this shift, where consumers are buying insurance from carriers and agents alike. While they may want to transact over the phone and/or online through a smart phone or tablet, they still want the peace of mind they get from knowing they are making a wise and informed insurance purchase decision to protect their family and assets.  I also believe that technology will continue to evolve in this regard to make the insurance purchasing process less cumbersome and more streamlined through the use of the third party data, making for a quicker path to quote and purchase for an improved overall customer experience.

What is driving distribution changes in the market currently?

T.L. Insurance is and continues to evolve on the distribution side.  Many years ago, it was routine for consumers to have a local agent that they would meet with in-person to discuss their insurance needs.  While insurance is complex and consumers want the advice and knowledge of a licensed agent to ensure they are making the best possible purchase decision, they are moving more toward wanting to do so by phone or online.  I foresee insurance distribution moving less from a face-to-face interaction and relationship, to more of an online or phone-based interaction.

What does today’s customer expect when it comes to interaction with carriers?

T.L. Consumers are getting more accustomed to instant gratification.  Whether that means ordering something online that arrives at their doorstep a day later, or having Alexa or Google Assistant turn on or off their devices on demand, consumers are becoming increasingly accustomed to ease of use and instant gratification.

I suspect that consumers are going to expect the same from their insurance carrier.  They’ll want to communicate through a channel of their choosing, whether that be over the phone, online, text, chat, or social media. Insurance carriers will need to be able to offer multiple communication channels.  In addition, they want the peace of mind knowing their insurance carrier is notifying them proactively if there is an issue on their policy or alerting them about important news.  Insurance carriers have begun to be more adaptive, and will need to continue to adapt in this regard to satisfy customer demands.

How can carriers truly add value to the customer at the point of distribution?

T.L. Insurance is more complex than many people realize.  While it’s mandated that in order to drive a vehicle, you need insurance on that vehicle, making sure the consumer has the proper amount of protection to meet their needs is key.  So, in an effort to provide consumers with that assurance, insurance carriers and agencies need to make the process of purchasing and servicing their policy as seamless as possible. All while providing consumers the education necessary for them to make the best possible purchase decision to protect their family and assets.  That’s the key to direct distribution – how do we make it easy for the consumer to buy and service our product, while still feeling well served and well informed?

What needs to be done at the point of sale to help build and sustain the customer relationship?

T.L. Building rapport and instilling confidence with the customer at the point of sale is critical to ensuring a strong and sustainable relationship between the insurance carrier, agent, and their customer.  While many consumers think of insurance as a commoditized product, what carriers offer in terms of price and service vary greatly.  Having your sales staff take the time and effort to understand the consumers wants and needs and tailoring an insurance product offering that is specific to that individual is critical to establishing a long and sustainable relationship with that customer.