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The Industry's Continuing Challenge of DTC

Insights from Bill Atlee, Chief Innovation Officer and Founder of iPipeline

It’s the question we ask ourselves, every day: “What’s for dinner?”

• The cheapest (but most time-consuming) way to do dinner is to drive to the grocery store, toss the items in your cart, drive home, and cook your meal.
• A little more expensive (and quicker) way is to use a service like Instacart. Someone else picks up the groceries, but you still cook your meal.
• And then there is a service like DoorDash, that delivers a meal, ready to eat, on your doorstep. It’s instant gratification but it will cost you much more.

The reality is that insurance is not that different.

Let’s face it. The industry wants the instant gratification of DoorDash -- with the fastest speed, convenience, and no hassles. But at what cost?

Over the past few years, InsurTechs -- start-ups backed by venture capitalists -- have emerged in the industry to create DoorDash-like products in an effort to go direct-to-consumer (DTC). Their journey has not been easy, as many seek to gain speed by using third-party data to make decisions. This may increase risk, the cost of leads, and the overall costs -- which can create challenges for an organization. 

Now, we are seeing a changing trend: InsurTechs continue to go after the DTC market -- but we are now watching them pivot to reach consumers -- through brokerage.

Earlier this year, we announced a strategic alliance with Ethos, one of the largest term life insurance providers in the U.S. -- and the first InsurTech on the iPipeline platform. Through this relationship, Ethos will be able to offer its white-labeled and customized life insurance assessment, application, and policy delivery services to the more than 400,000 agents across the iPipeline ecosystem. 

By joining forces with InsurTechs, we bring the advantage of iPipeline's "speed score" capabilities within our quote engines so agents can view an InsurTech's products along with traditional carriers, giving them the advantage of considering more than just price.

You may have heard me say that "insurance is sold and not bought" and that agents continue to be the heart of distribution. 

Our commitment to agents and our distribution channels has inspired us to go further. It's what helped us develop our "speed score" capabilities to think a little more non-traditionally. Agents can now sort carrier information according to the level of effort, speed -- and price. By doing so, some of the traditionally more expensive products -- which won't show up today only because of price -- will now have a chance to show up at the top of the list. 

As the industry continues to struggle with the challenge of DTC, we recognize that the agent determines what matters most to their client -- sometimes it's speed and sometimes it’s price.  At iPipeline, we remain committed to helping agents, distributors, and carrier make life insurance easier and more accessible for the client. 

Bill Atlee

Chief Innovation Officer and Founder

Are Longer Cycle Times Costing You Premium?

Longer cycle times directly correlate to decreased placements, which ultimately leads to less premium.

When comparing the last two quarters (2Q vs. 3Q2022), our stats show that Variable Life products: 

• Took 9 days longer to place or close (62 days in Q3 vs. 53 days in Q2)
• Resulted in a decrease in placement by -2.82%
• And paid less premium of -8.36% (or -$4.5M)

 What can you do about it?                                                                 

Click here to read our "5 Ways to Improve Placement Ratio."