Agents Are From Mars, D2C Is From Venus: Is Landing on Earth Possible?


Agents Are From Mars, D2C Is From VenusOver the past several years, there has been noticeable debate within the world of life/annuity distribution. In one camp are the traditionalists, who have sentiments such as “life insurance and annuities are SOLD—not bought” and “complex products will never be sold online.” In the other camp are the direct-to-consumer (D2C) players, who view this thinking as prehistoric and believe it proves agents are dinosaurs.

The D2C players point out the increasing age of insurance agents as well as the fact that every human sales process has already been disrupted or is in the process of being disrupted. The traditionalists may retort with, “How many billions did you sell last year?” while the D2C players respond with…well, never mind, you get the idea. So, the question becomes: Is the future of life insurance distribution a binary decision? Does the industry have to end up on either Mars or Venus?

Aite-Novarica Group respects the great passion around distribution debates. However, Aite-Novarica also observes that there may reasonably be a third path for some companies: agent tech. Agent tech can be defined as tools and technologies that allow for a significant increase in agent productivity to (a) conclude sales processes at a much higher rate, (b) execute parts of sales processes and let technology do the rest, or (c) allow technology to execute the complete sales cycle in some instances.

For this conversation, agent-tech tools are not the traditional (and very worthy) operational tools such as agency management systems, but technologies and approaches that allow significant increases in sales productivity.

Aite-Novarica sponsors a community of young agents called the 400 Under 40, where some of the most progressive thinkers in insurance distribution participate. These sessions do not turn into a discussion of “agents” vs. “no agents,” rather they show that there is significant interest in supporting agent relationships with modern technology and tools.

In addition, Aite-Novarica is beginning to see further evidence of this blend. One example is that Bestow and Equitable have established a “Term in 10” program. That is, a technology-driven innovator combined with successful traditional distributor. Other innovators like Socialeads are establishing themselves as resources for traditional distribution using technology in new and unique ways.

Aite-Novarica Group believes that some companies will find traditional distribution a long-term play and others will find D2C successful. However, don’t lose sight of the action here on earth—which is somewhere in the middle.

For further discussion of innovation in the distribution space, please contact me at [email protected] or reach out to my colleague Stephanie Dalwin at [email protected].