Research from the Boston Consulting Group and Morgan Stanley shows that intermediaries are extracting the most value from the life insurance industry.
A report focusing on the German life market found that an estimated 38% of every €1 of premium collected is spent on distribution costs, much of which goes to incentivising agents and brokers.
In comparison, only 35% is paid out in claims, with 11% covering policy administration and 16% to shareholders of the carriers.
Life insurance is a complex product and consumers value the advice and hand-holding that a human intermediary can offer. Yet there are opportunities for technology to reduce the expense associated with distribution and administration of life products to provide more value to customers.
The poor customer value inherent in the traditional life insurance model shows it is broken and crying out for a new approach.
We believe that distribution is taking a disproportionate share of the overall value from the life insurance ecosystem, while policyholders do not seem to be getting sufficient value