Reinventing Life Insurance Agency Distribution Globally

A new report from BCG/Morgan Stanley, Reinventing Life Insurance Agency Distribution Globally, discusses how the fundamental economics of the global life insurance industry are broken. Distribution consumes an increasing share of the industry’s economic value, particularly compared with customers’ declining share. Traditional distribution is on the cusp of meaningful change, especially in the agency channel, which will unlock benefits for all stakeholders.

Human-to-human interaction will remain key to insurance distribution, but the role of agents will change as the use of data and predictive analytics grows, customer behaviors evolve (with the use of mobile devices and social media, for example), regulations continue to change, digital players from adjacent industries look to disrupt the insurance industry, and traditional competitive pressures continue to increase.

The report looks at the future of human-to-human life insurance distribution globally and draws on more than 50 interviews with senior insurance executives; a survey of 850 agents in China, India, Germany, and the US; and detailed proprietary financial modeling of the interaction among the in-force book of business, new business, and agency economics.

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