Traditional methods of agency interfacing like portals and direct contact are the backbone of insurer distribution strategies. Yet insurers can no longer afford to ignore the capabilities that distribution connectivity solutions provide. They simplify the digital customer journey through the distribution channel, improve ease of doing business, and expand market presence.
Many insurers have stood up APIs to and from portals and policy admin systems, making them well-positioned to take advantage of these platforms. Startups and software suite innovation teams have latched onto this new data-rich environment, offering platforms to streamline submissions, the quote-to-bind process, and practically any other information transfer between insurers and agents.
The last few years have seen a proliferation of these distribution connectivity solutions. These vendors have adopted several strategies to stay competitive:
- Doubling down on core capabilities: Some early entrants in the space continue to focus on their original set of capabilities. They are expanding the insurers they work with, AMS platforms they integrate with, and lines of business covered. They are also shifting insurers from XML-based to API-enabled data transfer.
- Expanding capabilities: Many vendors have broadened the scope of their original capabilities. Some have expanded into data pre-fill and the lead-to-claims insurance life cycle. Some vendors have even been acquired by suites to fill in gaps.
- Monetizing data: Some vendors have positioned themselves as data brokers. They are aggregating the vast quantities of data passing through their platforms for market research, rating and appetite analysis, and benchmarking.
Insurers can interface with a growing number of market players. Yet choosing a vendor can be difficult, as insurers are still trying to quantify the value and viability of offerings. Prioritizing which distribution connectivity platforms to integrate with will require insurers to work with their agent and broker partners. Merger and acquisition activity in this space can only be expected to continue as vendors jostle to increase their footprint and expand their capabilities.
Insurers are working to achieve and maintain a solid core surrounded by APIs and microservices, and solution providers will continue to invest capital and capabilities to provide a seamless experience and help carriers reach distributors. Insurers should stay informed and create plans for navigating these new layers of digital transformation as they become table stakes.
For more information on the current state of distribution connectivity, consult Novarica’s recent report Distribution Connectivity: Overview and Prominent Players. We provide an overview of trends as well as profiles of over 20 prominent vendors. Feel free to reach out to me if you’re interested in learning more.
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