Last-Mile Distribution

An Amazon Moment: What Small-Medium Insurers Can Learn About Product Delivery

For your customers, it can be either engagement or disillusionment, clarity or misunderstanding

by Denise Garth

Ms. Garth is senior vice-president of marketing for Majesco, industry consultants with over two decades of experience in providing technology solutions, products and services for the insurance industry across lines of business – Property & Casualty (General Insurance), Life, Annuity, Health, Pensions, and Group & Worksite Benefits insurance. Reprinted with permission. Visit here.

Amazon launched an effort to gain greater control of its “last mile” delivery services — offering up Amazon delivery franchises to employees and individuals across the country. Amazon delivery service partners would compete with (and supplement) Amazon shipments through FedEx, UPS and the United States Postal Service. The goal wasn’t to out-compete other delivery methods on cost. The goal was to improve delivery times — in many cases offering same-day deliveries from Amazon warehouses and hubs to homes and businesses. This goal fit with Amazon’s “Customer Obsession” principle to create the best purchase experience, from the first research click to having the product in-hand in the shortest time possible.

Insurers, especially those that serve Small to Medium Businesses (SMBs) should familiarize themselves with the tactics of flexible distribution channels and last mile delivery. It is here, within the sales and service processes that customers experience engagement or disillusionment, clarity or misunderstanding. With so many insurance company options for coverage to SMBs, how does an insurer differentiate itself?

Delivery: Leading digital insurers will provide a superior delivery experience with products that fit

If you only look at pieces of the process, you miss seeing the holistic customer experience – and miss meeting customer expectations which leads them to look elsewhere. An outside-in view through the view of SMBs on what they want and expect, provides a roadmap on how insurers should adapt to create “Customer Obsession” magic within their own business.

To examine SMBs in detail, Majesco segmented them by size using the number of employees. (1-9 employees, 10-99 employees and 100-499 employees.) and generational group, splitting employee sizes into two groups; Millennials/GenZ and GenX/Boomers. Using these six groups, we identified trends related to insurance demand and purchasing. In last week’s’ blog, we looked at SMB product and service offerings in light of Majesco’s recent research. For a complete view of Majesco’s survey, you can download the full report, Building the Business Model for the Next Generation of Small-Medium Business Leaders.

Uncovering the opportunities

A complete understanding of SMB opinions and trends can help prioritize digital efforts and grasp how vital it is to meet SMBs need for a quick, easy, and thorough insurance purchase process. We see four key areas of the SMB insurance distribution process in terms of delivery.

  • Delivery Channel Choice
  • Delivery Vehicles
  • Personalized Delivery

It’s All About Choice!

Agents and brokers have long been the channel of choice for P&C, L&A, Group and Voluntary Benefits insurers. However, the channel landscape continues to rapidly shift and change.

Underpinning the shift are major changes in customer behaviors and expectations, particularly among the next generations of insurance buyers, Millennials and Gen Z. Their expectations are clearly for a multi-channel world, challenging insurers to provide channel options and choices across the entire value chain. This includes using and partnership with new channel options such as marketplaces, embedding insurance in other businesses at the point of sale, comparison sites and direct distribution. Many of these options are evolving and maturing out of InsurTech startups.

Within this rapidly shifting business landscape, insurers must rethink the delivery process because effective delivery is critical to growth. Designing, developing, and managing productive channels can create a sustainable competitive advantage. Alignment of the right channels, technologies, and partnerships will ensure that all delivery options meet the expectations of a collaborative, multi-channel experience for today’s and tomorrow’s customers.

Insurers must move to a digital, multi-channel strategy that includes both the front and the back office. An ecosystem of channel options and partners are the foundation for a next generation distribution network. For the SMB market, this is particularly important given they increasingly seek alternative channels beyond agents or brokers. InsurTech startup entities like Bold Penguin, Cover Wallet, Ask Kodiak and Limelight Health are offering valuable new methods for digitally matching SMB buyers with insurance options.

We are seeing the rapid adoption of direct, online insurance purchasing with 25% to 38% of Gen Z/ Millennial SMB owners already purchasing business insurance online with medium-sized businesses nearly doubling compared to last year. Interestingly, Gen X/Boomer SMBs are getting on the digital channel bandwagon with increases in online purchases, highlighted by the largest segment nearly tripling its rate, from 10% to 26%. But the online experience cannot be a “one size fits all” out of the box portal approach – but rather a personalized digital experience – one that can be developed and delivered via Majesco’s Digital1st Insurance™ platform.

We are seeing the rapid adoption of direct, online insurance purchasing with 25% to 38% of Gen Z/ Millennial SMB owners already purchasing business insurance online with medium-sized businesses nearly doubling compared to last year...

While SMB owners use a broad array of channels, agents and brokers still dominate at 2-3 times other channels for GenX/Boomers. However, the younger generations increase in online channels, including company websites are used at nearly the same rate as agents/brokers — reflecting the shift to direct.

Delivery Vehicles — Tools of Engagement

SMB owners use a broad array of methods to interact with insurers. Not surprisingly, the top 3 channels were “traditional” methods of email, phone and in person. However, the two larger Gen Z/Millennial segments outpace in the use of digital and mobile channels like digital payments, smartphone apps, texting, website chat, social media, messenger app, smart speakers and video chat. These trends are a wakeup call for insurers to rapidly provide digital channels of engagement that integrate easily with traditional channels — providing multi-channel options. Right now, there is no greater example than the use of smart speakers rising within the SMB market — a doubly-disruptive technology because it involves AI and mega-channels such as Amazon and Google.

Smart Speakers

Voice assistants are used for business purposes by 40% of Gen Z /Millennial business owners. Research by Adobe found that 71% of smart speaker owners use them daily, with 44% using them multiple times each day.[i] Smart speakers are mostly used for simple activities like listening to music (70%) or getting the weather forecast (64%). However, sizeable segments increasingly use them for more complex tasks like online search (47%), basic research (35%) and executing smart-home commands (31%).

Insurers are experimenting with smart speakers as a customer engagement channel. In August 2018, Coverager listed over 30 insurers offering voice-based skills for accessing information and performing simple tasks.[ii] Anthemis Insights reported 55 Alexa insurance skills as of December 2018.[iii] One of our ecosystem partners, Splice has developed smart speaker capabilities that can be integrated into the insurance process.

Digital Payments

Gen Z /Millennial SMB owners like the convenience of shopping and paying for things using a company’s app or digital wallets like ApplePay or Samsung Pay.

As we reported in our companion consumer research, digital payments are widely used and growing, so it is no surprise that SMB owners are using these methods as well. These capabilities are yet another way to make things more convenient for time-pressed business owners. Majesco’s new electronic billing presentment and payment EcoExchange app, powered by our Digital1st Insurance platform and Visa CyberSource payment gateway, is a way for insurers to quickly provide their customers the speed and convenience of digital payments.

Delivery Preferences — The Need for Speed and Flexibility

Channel preference is often dependent upon the insurance product type and its complexity – which is where we continue to see the need for agents based on the survey. The more complex or vital a particular insurance line is to the SMB, the greater comfort and need there is for an agent to be involved. Some lines, however, are clearly suited to more digital delivery than others. Within commercial auto and employee life, for example, agents were perceived as less necessary and complete digital delivery could receive greater interest.

Insurers should examine the time and hurdles that keep SMBs from making insurance purchase decisions. Time is a resource that busy small business owners have precious little to spare. They will appreciate insurers that tailor their products and processes to reduce time spent in research, purchase and management.

In our next blog, we’ll examine the competitive threat brought about by larger digital players such as Amazon, Apple and Google. We’ll also look at the importance of delivery partners and give an overview of how receptive SMBs are to various digital capabilities and the use of data on pricing. For a complete picture of SMB opinions regarding insurance delivery and engagement, be sure to download the full report, Building the Business Model for the Next Generation of Small-Medium Business Leaders.





[i] Abramovich, Giselle, “Study Finds Consumers Are Embracing Voice Services. Here’s How,” CMO, September 10, 2018
[ii] “Insurance Players Offering Voice Computing Skills,” Coverager, August 21, 2018
[iii] de Wet, Dario, “The Power Of Voice: “Alexa, I Want To Purchase Insurance” (Part 2),” Anthemis Insights (Medium), December 11, 2018,