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Pros and cons of differing distribution models

Capgemini
November 20, 2020

To meet the digital consumer from a marketing and lead generation perspective, the strengths and weaknesses would lie in the agent or agency’s ability to prospect digitally, the agent’s digital savviness, and ultimately the digital tools the agent has access to—and therein lies the importance of a carrier providing its own tools for the agent to use. Here are the different distribution models and their respective strengths and weaknesses when it comes to supporting digital:

Figure 4:   SWAT of Distribution Models

Source: Capgemini Financial Services Analysis, 2020

Another model carriers are increasingly leveraging is the Pseudo-Direct Model (Direct-to-Consumer processes augmented by agent assignment with reduced commissions).  While the strengths, weaknesses and threats are largely the same as “Direct to Consumer with no agent” above, the commission is no longer zero; however, this is often offset by agents providing service resulting in a smaller call center and reduced call center costs; channel conflict may be reduced.

Lawrence Krasner

Expert in Business Strategy, Digital Transformation, Financial Services

I have over 25 years Business & IT Strategy and Transformation experience in the life and P&C insurance industry and banking/ capital markets industry.
I have led efforts to defined and managed large business change programs and technology portfolios. This has included strategic planning, segmentation, competitive assessment, defining new target business, technology and operating models, tech and operations M&A programs.
My strengths lie in technology & operations strategic planning, digital transformation, developing cost-effective and risk controlled operating models and enabling technology to achieve the greatest value. This includes transformation program management, operations design, business process performance improvement, outsourcing evaluation, shared services design, business requirements, technology design and testing, digital roadmap design, platform modernization, sourcing rationalization, activity based costing, profitability modeling and financial reporting.
I have managed large projects, working with senior-level clients and developing enterprise-wide innovative solutions to business and technical problems.