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May 20, 2020updated 31 Jan 2022 10:13am

Direct to Customer Insurance: Marketing and Distribution

By GlobalData Thematic Research

Marketing and distribution are key as the rise of the internet has prompted customers to buy directly from providers. They are incentivised by the convenience of purchasing online and by often being able to secure lower premiums. This is pressurising insurance companies to put greater effort into their D2C strategies. Moreover, a wave of new entrants has excelled at improving the customer journey, removing pain points.

Listed below are the top marketing and distribution trends impacting D2C in insurance, as identified by GlobalData.


The role of insurers in marketing and distribution will increase as consumer preferences evolve and the shift towards buying more from providers continues. For a long time, insurers’ reputations have been rather poor, and a key challenge for incumbent insurers will be to earn the trust of consumers. In this respect, startups are differentiating their brands. Such companies have not only been at the forefront of making products more easily accessible to customers, but they have also promoted that the claims process is more straightforward with them.

Hyper-targeted marketing will help insurance firms build brand awareness and showcase products and services to their target audience. At the same time, as insurers lessen their dependence on intermediaries, they will be able to price products more favourably. Providers with a greater focus on the direct channel generally invest more in marketing and advertising campaigns, in a bid to attract more customers, as is the case with Direct Line in the UK.

Insurers going D2C will be required to monitor technological developments and keep pace with new ways of distributing their products and services. In February 2020, Bharti AXA started delivering general insurance policies and renewal premiums to customers in India via WhatsApp. This highlights that insurers will have to focus on improving the customer experience, particularly as online reviews and product feedback can influence buyers’ decision-making.

Some incumbent insurers may seek partnerships with tech-savvy startups to enhance the look and feel of their digital channels. Automation of contracts and simpler inquiries (via chatbots) can free staff to deal with complex sales inquiries and other value-adding tasks.


As insurance companies increase their interactions with customers and grow their direct sales, the broker channel will lose importance. For those insurers keeping their ties with intermediaries, the broker channel will be valuable to improve the visibility of their products and connect them to customers. The broker channel is expected to remain dominant in the distribution of commercial lines (particularly to large organisations) as well as life products in the foreseeable future. Although sales in the non-advised channel have increased, the complexity of some products continues to encourage customers to seek recommendations of brokers and other advisors.


Aggregators will exert pressure on insurers aiming to sell directly to customers. Aggregators help consumers compare policies and prices online, without the need for them to get policy details and price quotes from several providers separately.


The bancassurance channel will remain important in the years to come with regards to the distribution of specific insurance products, such as buildings insurance and term assurance products that are linked to a mortgage.

The bancassurance channel will also continue to play an important role in the distribution of commercial business lines to SMEs, but will have a less influential role among larger organisations, which tend to favour the broker channel. In recent years, both challenger and incumbent banks have developed new business propositions to attract customers, compromising direct sales. Banks are well positioned to cross-sell insurance products to business customers. This is convenient to customers, who benefit from having all their financial history with one provider, making it easier to take out new products and manage them.


IFAs will experience a similar situation as brokers. As the volume of data readily available online allows customers to make more informed decisions without seeking independent advice and insurers move towards more direct sales, the role of IFAs in the distribution channel will be somewhat compromised. This will be more apparent for general insurance products.

IFAs have an established presence in the distribution of life insurance, where growth of the direct channel has been slower. Insurance companies will continue relying on IFAs for the marketing and distribution of these products.

Affinity partners

Typically, affinity partners have access to a large customer base, making them well positioned to sell personal lines. The affinity channel accounts for a small proportion of sales, and its share has remained rather stagnant in recent years. As insurers grow their direct sales, they will become less reliant on affinity partners.

This is an edited extract from the Direct to Customer in Insurance – Thematic Research report produced by GlobalData Thematic Research.