In this AMBestTV episode, Michael Adams, senior financial analyst, and Igor Bass, financial analyst, both of AM Best, said many life insurers are at varying stages of building direct-to-consumer (DTC) distribution, but they also must address challenges. Click on http://www.ambest.com/v.asp?v=dtc719 to view the entire program.
Adams highlighted how insurance companies are grappling with DTC distribution.
“There has been a lot of initial interest in the DTC channel by many insurance companies, but they really are in the early stages of determining what their DTC strategy is going to be,” said Adams. “Companies definitely view it as a way of reaching additional customers, as well as accessing the middle market in a more cost-efficient way, but what it is really is more of an ancillary view right now.”
Bass addressed what are the limitations to DTC, especially in complex products.
“Some of the complex products cannot be simply sold over the DTC channel, so companies are trying to keep it simple, for example, simple whole life and simple term life products that could be sold quicker to the consumer in the fastest way possible. Also, there are limitations in cost. It takes a lot of money to start up some of the distribution channels directly, which is keeping some of the companies away as well,” he said.
To access a copy of this special report, titled, “DTC: Expanding Distribution and Seeking Opportunities,” visit http://www3.ambest.com/bestweek/purchase.asp?record_code=28686.
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