EP38 - The Power Shift in Distribution
Distribution in insurance has become a huge topic again. I say again because it has never really stopped being one.
In this Episode:
Francois Jacquemin explains how insurance distribution is shifting as brokers and platforms gain power. Clients arrive through life events and need protection fast. Insurers win by industrialising processes, simplifying the value chain, and earning trust over time.
If you want a simple definition of why distribution matters, here it is. Insurance rarely begins as a desire. It begins as a consequence.
People do not wake up in the morning with the goal of buying an insurance policy. They buy a car. They move into a flat. They start a business. They hire employees. Then, quite suddenly, they need protection. They need to comply. They need to reduce risk. They need reassurance.
And at that moment, they face a problem that every insurance leader recognises. Selecting an insurance contract is difficult. It is technical. It is full of exclusions, options, and language that is not designed for speed. Even highly educated clients can feel uncertain, not because they are incapable, but because the product is abstract until the day it is tested.
Distribution is where that uncertainty is handled. It is the interface where complexity becomes a decision.
This is why I have enormous respect for distribution professionals. Whether they are agents, independent brokers, affinity partners, or digital platforms, they carry a difficult responsibility. They must understand clients and contexts at the same time. They must translate needs into coverage, and coverage into outcomes. They must protect interests, not just sell a contract.
The environment changes, the story repeats
Every year, we hear that distribution is transforming. Every year, we hear that the pace is accelerating. There is truth in both. But there is also a familiar pattern.
The fundamentals remain. The environment evolves.
Regulation changes. Client expectations change. Access to information changes. The ability to compare offers changes. The tools change. The channels multiply. The economics shift. Yet the underlying question stays remarkably stable.
How do we connect the right client to the right protection, in a way that feels clear, fair, and reliable?
A shift of power in plain sight
What has become more pronounced in recent years is the shift of power inside the distribution ecosystem.
Clients have more information and more routes to purchase. Many will start online. Some will complete online. Others will use online research to negotiate offline. This does not eliminate the role of the distributor. It changes the starting point of the relationship.
At the same time, brokers and intermediaries have been moving upstream. They increasingly influence, and sometimes define, the product itself. They assemble coverage concepts, design policy wordings, set service standards, and then select an insurance carrier that can provide capacity under the right terms.
In that model, the insurer’s role can become more limited and more business-to-business. The broker owns the client relationship, owns the brand experience, and owns the leverage that comes with scale.
If a distributor controls enough clients, they can dictate terms. They can also invest in their own administration. They can manage claims interfaces. They can provide ongoing services. The client may barely notice the insurer behind the product.
This is not a criticism. It is simply the reality of competitive advantage. Whoever owns distribution owns negotiating power.
The explosion of channels and the discipline it demands
Distribution is also diversifying in ways that look complex from the outside and feel complex from the inside.
We see direct channels, digital portals, aggregators, and embedded models. We see leads coming from garages for motor insurance, property platforms for home coverage, employee benefit ecosystems for health, and many other partnerships that did not exist at scale twenty years ago.
The lead source universe has expanded dramatically.
In that landscape, the winner is often the organisation that can access leads efficiently, convert them responsibly, and scale the model without breaking the client experience. Sometimes that winner is a broker. Sometimes it is a carrier. Sometimes it is a new entrant with a narrow focus and excellent execution.
For insurers, the implication is uncomfortable but liberating. You cannot master every channel equally well. The number of channels and business models reduces the ability of any one insurer to control them all.
So the answer is not to chase everything. The answer is to specialise.
Specialise in the channels you can genuinely serve. Specialise in the value chain where you can be outstanding. Choose where you are differentiated, and then execute with discipline.
Complexity belongs inside, simplicity belongs outside
There is a principle I return to often, because it is one of the few that holds up under pressure.
If you manage complexity internally, you can create simplicity externally.
This is not philosophy. It is an operational strategy.
Distribution becomes fragile when internal processes are slow, fragmented, or inconsistent. Not because distributors are impatient, but because clients are. They have life events to handle. They want clarity. They want speed when speed matters. They want human support when uncertainty rises.
If internal operations are not industrialised, every new channel becomes a strain. Every partnership feels bespoke. Every product variation becomes a burden. Every service promise becomes expensive.
But when internal processes are optimised, something changes. The insurer can move faster with fewer errors. The distributor gets a cleaner interface. The client experiences a simpler journey.
Industrialisation is sometimes misunderstood as removing humanity. In reality, it is what allows humanity to show up where it matters. When the machine runs reliably, people can focus on judgement, empathy, and problem-solving.
The real competition is not the contract
When insurers discuss distribution, the conversation often stays close to product. Pricing, features, underwriting appetite, commission structures.
Those are important. But they are no longer enough.
Because distribution is not only about the moment a contract is sold. It is about what happens across the lifetime of the contract.
If a client experiences insurance as a one-time transaction, they will treat it as a commodity. They will leave when price moves. They will distrust promises. They will feel alone when something goes wrong.
If a client experiences insurance as an ongoing relationship, they will stay for reasons that are more durable than price. They will stay because the insurer reduces risk, not just pays claims. They will stay because the service environment makes them feel protected.
This is where many insurers are now competing. Not only on the contract, but on everything around it.
Risk prevention services. Assistance services. Guidance when life changes. Support when a claim happens. Small interventions that matter, and large interventions that restore stability. The goal is not to add noise. The goal is to build a sense that the insurer belongs in the client’s world, not only in their paperwork.
Visibility is earned through service
When brokers or intermediaries provide branding, administration, and full client service, the insurer can become invisible. That is a strategic risk.
Some insurers respond by pushing for visibility at point of sale. Others respond by creating direct channels. Those can help.
But the more durable path is to earn visibility through service quality. The kind of service that distributors want to be associated with, and clients remember when it matters.
This requires investment, but not performative investment. It requires making the value chain strong, predictable, and easy to connect to. It requires clarity in governance and accountability. It requires technology that serves the process, not technology that becomes the process.
Most importantly, it requires respect for the distributor’s role. Distribution professionals are not a hurdle between insurer and client. They are often the reason the client feels protected in the first place.
What leaders should take from this
For the executives I often speak with, the question is rarely whether distribution matters. They know it does. The question is how to respond without creating more complexity than they remove.
Here are a few practical conclusions I would offer.
Treat distribution as strategic control, not commercial plumbing. If you lose control of distribution, you lose bargaining power, visibility, and often margin.
Accept that you cannot master every channel. Choose where you will win, then build capability around that choice.
Industrialise internally to simplify externally. If you want speed and quality in a multi channel world, operational excellence is not optional.
Compete on the lifetime experience, not the initial transaction. Services, responsiveness, and consistency are what clients and distributors remember.
Respect the craft of distribution. It is a complex, human job. When insurers and distributors build trust, the client benefits first, and the economics usually follow.
Distribution has always been the hinge point of insurance. What is new is the number of hands on that hinge, and the speed at which it moves.
The leaders who succeed will be the ones who bring calm structure to that motion and who turn complexity into protection that feels real.
Looking for perspective. I’ve got you covered.
Timecode:
00:00 Introduction to Insurance Distribution
01:05 Challenges in Finding Clients
03:05 The Evolving Landscape of Insurance Distribution
03:47 Power Shift in Distribution Channels
05:59 Specialization and Value Chain Mastery
08:07 Client Relationship and Service Enhancement
François Links:
Apple Podcast
Transcript:
Distribution in the insurance sector and ecosystem has become a huge topic. Honestly, distributing insurance contracts and insurance has always been a hot topic. This is the core relationship between the client, the insurance company, and the insurance carrier, which is where it all hinges.
Why does it all hinge there? Because no one gets up in the morning and goes and buys an insurance contract unless there is a motivation next to it. It could be a flat; it could be a car. But the main objective is not the insurance. Understanding and selecting an insurance contract is very challenging.
So, the distribution is where that happens, and from the insurance company point of view, finding a client is very difficult. How do you find your client? How do you know that this person is going to buy a car if you don't have a relationship with the garage or a structure that is going to channel the information to you?
This distribution topic and this interface topic has always been there. It seems that every year things are accelerating and it becomes a bigger topic, but based on my experience, every year the same stories are coming back. It is simply that the environment is changing. The complexity has changed, the law changed, and the ability of the client to select and access information changed. But the topic remains the core.
I have an enormous respect for insurance distribution. It requires knowing clients and knowing the insurance context. If you are not an agent but an independent distributor, it requires knowing many insurance companies and their differences, their strong points, and their weak points, and the ability to protect the interests of your clients. If you are an agent, you protect your clients as well. It is about how you approach your clients in the best possible way—not to give them one single contract, but to provide them the right services, the right information, and the ability for the client to feel protected, not in one field but on several fields which matter to him and fit with his situation. It is a very difficult job.
What we see now is that people are not only distributing to clients themselves; as opposed to what I said earlier, you don’t get up in the morning to get insurance, but sometimes you need to get insurance. What you do is you just go online and you can find many sources of information. There are even people or companies selling online, whether it is a human being or simply an interface with an insurer or a broker selling sets of various levels of coverage and contracts.
There is a shift of power in distributing insurance contracts because the traditional way of having agents or working with insurance brokers has changed. You have vertical integration, so brokers are willing to go as much as possible into the definition of the insurance contract. They define a contract for their own client and they just look for an insurance carrier. The place of distributing insurance contracts for an insurer there is much more limited. It is B2B, and the client belongs to the broker who has the buying power and a number of clients sufficient to dictate the terms to the insurer and to have the right level of contract according to their own decision-making.
There are a lot of entrants on the direct channel, and there are also a lot of brokers who are working with other sources of information or leads, whether it is a group of garages for car insurance, a new online portal that sells and rents flats for a home, or other types of insurance. The source of leads has increased dramatically. The winner there is the broker, distributor, or insurer who can access those in an optimal way, has the ability to define together with the distributor the right level of contract, and has the ability to multiply that.
Although it sounds complex from the outside, if you manage to optimize your processes—industrializing processes internally and managing complexity—then you create simplicity for the client, the distributor, and yourself.
Where is the power shift in distribution? It is that the insurer has to work much harder on the internal processes and on the value chain internally, and has less ability to master the various distribution channels. The increasing number of distribution channels and business models reduces the ability of the insurer to master all of them. There has to be a specialization in channels and a specialization in driving and mastering the value chain, which, in terms of resources, leaves a lot of room for those new entrants in the distribution sphere.
The second element is that the winners in the distribution sphere have the ability to dictate terms, and that drives their willingness to compete upwards and take part of the ownership of the value chain of the insurance company. It can be some brokers who have their own administration, and that drives the insurance company much further backwards in the client sphere. The client doesn't even know sometimes who the insurance company is. What they buy is the branded product that the broker is proposing and suggesting that they buy. If they buy, they are managed completely by the insurance broker or intermediary who is doing the administration, the branding, and full-fledged client services.
That is what insurance companies are competing with. They are usually very successful, but they are allocating a lot of resources to find a way into making their client relationship, their space, and their visibility with the client well known by increasing the level of services. Here we don’t talk only about what the contract looks like; we talk about how an insurer can provide something on top of the transaction—which is the insurance contract—in terms of services to reduce the risk of the client, whether it is an individual client or corporate client.
We must also make sure that when there is a problem, there is not only a financial transaction but also a whole environment of additional services—sometimes small, sometimes big—that will make sure the client feels at home with the insurer. In all that ecosystem of distribution, distributing insurance contracts is not only about distribution; it is about the service that is provided to the client, not in one precise moment of time, but throughout the lifetime of the contract. Of course, that is how clients either leave or stay with a distributor or an insurance company.