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Personal Lines Channel Plans: It’s Complicated

New SMA Blog by Mark Breading, Partner, Strategy Meets Action

When most insurance industry observers think of the channel strategies for personal lines, the picture appears to be fairly simple. More of the business is moving to direct distribution approaches, whether that is through call centers or the web. Furthermore, there is a clear movement to digital, straight-through processing. Comparative raters continue to exert significant influence on submissions flow. And finally, the rich get richer – with tier one direct carriers continuing to gain share. These have been the trends for the last few years. But a closer look reveals that the evolution of distribution in personal lines is more complicated than that. The trends just enumerated still exist, but there is more to consider.

New research by SMA reveals several additional developments that must be added into the channel evolution picture.

  1. Relationships with affinity groups are a growing distribution choice: A significant percentage of personal lines insurers plan to increase their emphasis on business with affinity groups or establish partnerships with new affinity groups or companies outside of insurance.
  2. InsurTech distribution partnerships are vital: There is already substantial partnership activity underway between carriers and InsurTech digital agents or distribution platforms. The new distribution platforms are more than comparative raters, providing increased capabilities to support fully digital, straight-through processing operations.
  3. MGAs are a growing part of the landscape: MGAs play a major role for commercial lines distribution but are not always considered to be a significant channel for personal lines. That may be changing as insurers create more new/customized products for consumers and seek access to preferred segments.

And last, but definitely not least, independent agent distribution continues to flourish. The IA market landscape is shifting dramatically through M&A and the role of platform agencies. Insurers are adjusting to the new realities of partnering with sophisticated distribution partners that have scale and advanced tech. At the same time, many insurers are deploying very focused appointment strategies. Rather than scaling back on appointing new IA partners, in many cases, the opposite is occurring. Couple that with the enhanced tech capabilities being provided to distribution partners and the increased connections with intermediary distribution platforms, and it is clear that the independent channel will still be a critical part of personal lines distribution for years to come.

The result of all this activity in channel strategies is a move toward more omni-channel capabilities, with carriers offering prospects, producers, and policyholders a variety of ways to interact. And in five years, the channel environment is likely to be even more complicated than it is today. But it is unlikely that any one channel will dominate.

For more information on commercial lines distribution expansion strategies, see our recent research report, Channel Strategies and Plans for P&C Personal Lines: A View of Today’s Environment and What’s to Come.

About The Author

Mark is known for his insights on the future of the insurance industry and innovative uses of technology. Mark consults with insurers and technology companies on forward-thinking strategies for success in the digital age. His inventive methodologies, fresh ideas, creative conceptualizations, and ability to incorporate InsurTech and transformational tech in business strategies are unparalleled. He also leads SMA’s research program, publishing 25-30 research reports per year and conducting various custom research projects for insurer and vendor clients. His thought leadership in the areas of InsurTech, transformational technologies, customer experience, and digital strategies has earned him a ranking of one of the “Top Global Influencers in InsurTech” by InsurTech News and Onalytica and a place in the ten finalists for the “Top Global IoT in Insurance Influencer Award.”

Before joining SMA in 2009, Mark spent 25 years with IBM in roles including the Global Insurance Strategist and Director of Global Financial Services Executive Conferences in addition to leadership roles in consulting and marketing. Mark co-developed IBM’s Account Based Marketing program and led the global project office to implement ABM across all industry verticals worldwide. Mark has held both technical and business roles in sales, consulting, marketing, and business strategy and has advised insurers around the world for almost 30 years.

About SMA, a ReSource Pro company

Exclusively serving the insurance industry, Strategy Meets Action (SMA) is an advisory services firm offering retainers, research, consulting, events, and innovation offerings to both insurance companies and solution providers. Learn more about SMA at

SOURCE: Strategy Meets Action (SMA)