Direct sales are increasingly popular in other industries, including P&C insurance, but have yet to cross over to life insurance, found a Celent study: Life Insurance Self Service.
“Celent’s review of the top 50 US life insurance websites confirms our hypothesis that the top life insurance brands are not offering direct sales,” the author Karen Monks said in the report. ”This is most likely due to the continuing reliance on agents and brokers for sales, particularly high net worth sales, and the concern over brand erosion. Direct sales create a perceived channel conflict that most life insurers have not resolved.
“Direct sales may cause friction with the agent base; however, that doesn’t mean insurers shouldn’t be thinking of a way of engaging customers in a hybrid or semi-direct way to encourage increased sales.
While the report found direct sales may not have taken off south of the border at least one Canadian insurer recognizes the growing importance of having an online presence.
BMO Insurance recently launched Insure Now Plus, which consumers can buy directly online. The policy, which targets consumers under 50, combines life, critical illness and disability insurance into one plan.
“It’s very much targeted to a younger market,” said Steve Carter, senior vice president for product management and development at BMO Insurance. “We’ve made it very easy to get, you can buy it online and you can buy it through an insurance broker. So this is a fairly new product and we’re looking forward to seeing what kind of reaction we get to it.”
A new sales channel could soon be taking away business from advisors.