As Predicted, Middle Ground Is Key in the D2C vs. Agents Debate


As Predicted, Middle Ground Is Key in the D2C vs. Agents DebateEarlier this year, we wrote a blog post exploring the debate over direct to consumer (D2C) vs. traditional agent from a distribution perspective. In that post, we postulated that this debate leads to a false dichotomy between the idea of human beings doing traditional things like taking applications vs. the concept of going all digital with no human involvement.

We opined that the real action in the short term may be between these two extremes. A more pragmatic view, landing on Earth, so to speak, requires a look at technology-assisted distribution. This opinion was based upon strategic moves Aite-Novarica Group saw within the industry by both carriers and innovators.

Prophecy is a dangerous business. Or as our team likes to say, “Predicting the future is really easy—getting the prediction right? Not so much.” Prophecy sans data is even riskier.

Now some data has arrived. Aite-Novarica just published research on buying life insurance, a report that is full of important consumer insights. Of particular interest to the topic at hand is Figure 11 from that report.

Figure 11: Online vs. Paper Processes

Figure 11 Online vs Paper Process

As you can see, traditional paper made up 21% of the applications for those who purchased life insurance, while direct online applications from a website were slightly ahead at 23%.

However, 53% of participants, more than purely traditional and purely D2C combined, completed their life insurance application online with agent assistance.

As we posited earlier based on the strategic moves we observed, distribution action over the next several years may be most intense in the middle. This is an important takeaway for carriers, innovators, and solution providers alike.

Of course, there is no guarantee that this trend will hold in the long term. Indeed, D2C may completely win out or plateau. Regardless, for the forseeable future, the real action will be here on “Earth,” in the middle between the extremes.

To agree, disagree, or share your insights, feel free to contact us at [email protected] or [email protected]