Selling Insurance *Off the Shelf

Insight: Off the Shelf
633 words
April 1, 2010
Best's Review
Copyright 2010 (c) A.M. Best Company, Inc. All Rights Reserved.
(Best's Review) On the face of it, the insurance business and the retail business could not be more different. After all,
consumers generally walk into stores and make their purchases based on what is available on the shelves.
Retailers take responsibility for getting the right mix of products displayed on the store shelves in an
attractive way and (one hopes) providing pleasant, knowledgeable sales help to answer questions and guide
the customer through the purchase process.
In recent years, consumers have begun to educate themselves more before shopping--comparing providers
on the Web, for instance, or starting a purchase on a direct or Web-based channel, then going to a store to
physically pick up the merchandise. Smart retailers have factored this into their selling models, using
analytics to see how consumers are using different channels.
Life and property/casualty insurers don't think in terms of stores and shelf space--but they should. Retailers
have learned valuable lessons over the years, and the retail environment has a great deal to teach carriers.
Insurers need to examine the kind of stores in which their customers shop for insurance.
For instance, do they shop in traditional brick-and-mortar stores (or sales offices); do they buy through
financial planners and independent agents; purchase products via the Web; or do they rely on a captive
agent network?
Once the retail channels have been identified and mapped, insurers need to ask three pivotal questions:
-- Is my product in the right stores? Some insurers are developing more affordable, entry-level products,
such as for people under age 40 or for individuals whose main concern is price. Offering such products
through financial advisers and independent agents is a non-starter, in which only direct channels can offer
the immediacy (and the cost structure) needed to make the products viable.
-- Do I even have the right product for the stores I want to sell through? Insurers who have been selling the
same "one-size-fits-all" product need to rethink their product development process. Insurers with highspeed, flexible product development models can create attractive variations for specific consumers, such as
those just starting families. Similarly, insurers can experiment with different store models--from a
superstore with all available offers to an agent-operated "franchise" or satellite store.
-- Are the stores, and my company, doing enough to promote sales? Retailers are fond of saying "retail is
detail." Offering a quality product is necessary but no longer sufficient. Insurers who use analytics to gain
insight into customer needs and desires, who provide multiple channels to access information in the format
that customers want, and who add an element of fun and excitement to buying insurance--whether through
mobile phone applications, social media or old-fashioned brand marketing--will generate demand and win
more shelf space.
Insurers don't have the luxury of sending sales teams into stores to run promotions, arrange aisle displays
or offer product samples. That places even more of a premium on technological innovation and creative
approaches to gaining market share.
There is a very large market of unserved or underserved insurance consumers. Insurers who can bring the
right value propositions to customers, while staying true to their own financial objectives, will enjoy the
most success in the battle for insurance shelf space.
(Contributors: Michael A. Costonis is the executive director of Accenture's North American Insurance
Industry Program across life and property/casualty, and Kevin Kraft is Accenture's managing director in
charge of growth and distribution.)
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