The Changing Landscape of Insurance Distribution
Wednesdays with Woodward webinar
February 17, 2021
Whether it’s keeping up with changing consumer preferences, rapid technology advancements or even the impacts of COVID-19, the pace of today’s business world is accelerating. The insurance industry is no exception, with its evolving distribution strategies and ongoing consolidation. In this installment of the Wednesdays with Woodward webinar series, Travelers’ Patrick Kinney, Executive Vice President, Enterprise Distribution Management, examined the changing industry landscape.
Kinney emphasized that insurance distribution has been consolidating throughout his entire 38-year career. However, he noted that while mergers and acquisitions are nothing new for the industry, the buyers have changed. Private equity-backed firms made up more than 67% of U.S. mergers and acquisitions in the insurance industry in 2020, according to a report by SNL Financial.
Who Benefits Most from Consolidation?
Kinney reiterated that Travelers has no control over or preference for how agencies are organized, and he emphasized that Travelers will figure out how to be the best distribution partner whatever the environment. He opined that customers, agents and insurance carriers would all benefit from the race for efficiency and cost reductions resulting from consolidation.
The Impacts of the COVID-19 Pandemic
Before the COVID-19 pandemic, Travelers and other insurance carriers were driving toward technology and digital solutions, according to Kinney. Once the pandemic hit, it “sharpened the focus on what companies should be investing in,” including prioritizing these advancements and the customer experience. Kinney highlighted several insights that have emerged from the pandemic, including:
- Customer-centric sales design is critical to future success.
- Customers expect digital, frictionless transactions.
- Sales and marketing strategies are changing to compete in a virtual world.
- Software, including insurance agency management systems, is adapting to serve the changing needs of distributors.
- Industry partnerships with InsurTech companies are accelerating.
Talent in the Insurance Industry
Kinney also shared his take on the future of talent in insurance, which he described as a “fantastic industry.” He emphasized the importance of recruiting and retaining millennials, and he also highlighted the SHE Travels® initiative, which supports Travelers’ larger commitment to lead the industry in advocating for women in insurance. “We are committed to hiring and promoting women and diverse candidates,” he shared.
Presented by the Travelers Institute.