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Self-Service and Digital Premium Payment Rates in Insurance

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Year in and year out, distributor ease of doing business is almost always among insurers’ top business priorities; this has been true essentially for as long as Aite-Novarica Group has tracked insurers’ IT and business priorities. Technologically, insurers’ emphasis on agent- and distributor-facing capabilities translates into investments in portals, APIs, and self-service for new business submission and policy transactions.

When we surveyed insurers on their experience with self-service capabilities in 2021, we found that they were prioritized most heavily in high-volume, low-value lines, such as personal, small commercial, and individual life lines of business. This makes a lot of sense—these lines are under heavy cost pressure and are increasingly sold direct, so profitability is tied to throughput. Agents don’t want to spend longer servicing these policies than they have to, so convenience is a competitive differentiator.

That wasn’t as true for lines that were traditionally more intermediated. Standard commercial and specialty lines, in particular, didn’t see a major emphasis on self-service capabilities. It wasn’t uncommon for lots of new business to arrive via email.

In our most recent survey, that looks like it’s beginning to change. More insurers say at least some of their new business and policy servicing capabilities are done via self-service. It also looks like a larger share of agents are using those capabilities, perhaps younger agents who are more comfortable conducting business online, as their older cohorts age out of the agent force.

And price-pressured but not yet fully-commoditized lines? Agent self-service capabilities are more important there than ever: Utilization for self-service transactions has expanded across not just personal lines but also small commercial and individual life. These lines are still targets for direct sales and disintermediation, but agents remain important, and agents increasingly expect speed, convenience, and efficiency from their carrier partners.

Not all transactions need to be enabled for self-service right away, but consumer and distributor expectations will continue to grow. Insurers should align their investments to the demands of their distributors and customers when prioritizing capabilities.

To dive into the full insights from our latest study on self-service and digital payments in insurance, read our report Self-Service and Digital Premium Payment Rates in Insurance. Insurers can use this report to benchmark their enablement of self-service transactions against peer organizations that sell similar products, while solution providers can use it to understand insurer priorities and activity around self-service transaction enablement to align their product features and marketing with insurer needs. You can also contact me here if you have questions about changes in self-service capabilities in the insurance industry.