Auto Insurers Boost AlternativeDistribution Channels
More insurers are using alternative distribution channels, attempting to raise the odds of winning new customers, according to a recent report by Chicago-based Cochran, Caronia Securities, LLC.
The report–"Distribution: The Next Battleground"–found that the market share of non-traditional distribution channels in the auto insurance market increased from 10 percent in 1997 to 17 percent in 1999.
Among the non-traditional channels drawing the attention of personal auto insurers is the affinity marketing strategy, where products are marketed to a defined group of consumers with similar characteristics. (An example would be a collection of insureds that all shop at Sears.) Using this approach, the report asserts, insurers can achieve higher response rates than with mass direct marketing plans, and can price and underwrite groups with defined characteristics.
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