The proliferation of the Internet, mobile technologies, and social networking sites has altered the purchasing behavior of customers in the insurance industry. While the agent channel continues to provide a substantive influence on the insurance application and sales process, a growing number of customers are turning to the Web to research and buy insurance products. As a consequence, most leading insurance carriers have in recent years adopted multi-channel distribution.

Multi-channel distribution is a powerful strategy for growth-enabling carriers to target new markets and customer segments, retain customers and increase wallet share. However, a multi-channel approach also brings several challenges.

On the one hand, channel strategy professionals need to continue to invest in their existing agent network, while on the other, they need to invest in promoting online self-service to lower distribution costs, invest to improve the Web and multi-channel customer experience and experiment with emerging technologies like mobile phones. While designing their multi-channel framework, channel strategists also need to take into account that although the online channel enhances the reach of a carrier, lowers the cost of distribution and provides customers with invaluable convenience benefits, using only the online channel brings with it the downside of low customer retention.