There’s a growing trend in today’s marketplace that surpasses all industry boundaries and supersedes any previous model. That trend is getting closer to the customer and it’s every company’s goal.

You can see it in how they mine for customer information in order to customize and better market their products.

It makes sense that companies would want to establish relationships with the people using their products – that’s just good business sense. And this goal seems easy to achieve within companies that produce consumer goods like electronics and apparel, and who provide services like entertainment and transportation.

But what about complex products like insurance? Does a close manufacturer-consumer relationship make sense here too?

It used to be that manufacturers of insurance products, or insurance carriers, were content to rely primarily on agents to interact with the customer. These agents would educate the consumer on how various product types function and help them figure out which product could best address a financial concern. Because the agents were employees, the carrier could rely on steady sales without cultivating a personal relationship with the consumer. But now, because agents are largely independent and work through distributors, no carrier can count on agents to sell only their products and as a result have become eager to establish a direct connection with customers to ensure their survival.

I know because I saw it happening at a recent industry meeting. The meeting was geared toward distributors but a surprising number of insurance companies and reinsurers were there. Their presence indicated that they were trying to inch their way closer to the customer.

While I’m a great proponent of insurance companies dedicating themselves to pursuing a consumer-centric business focus and giving more thought to what consumers might want and need, I’m not convinced that direct carrier-to-consumer interaction best serves either party.

On the consumer side, a product-impartial agent with multiple carrier relationships can help the customer find what best suits his or her needs. This way, customers aren’t limited to the offerings of only one carrier.

On the carrier side, the role of the agent helps them maximize their reach with fewer in-house resources. In this low-interest-rate environment, where insurance companies are hurting, they can’t effectively serve new customers and their in-force business simultaneously; they must (and do) prioritize current customers over new business. By sticking with the model of old and deploying agents, they don’t have to choose.

Rather than disrupting the carrier-distributor model, what carriers and distributors ought to consider is how they’ll manage the new customer relationships going forward.

In the digital age, the only real solution is the use of technology. But how do you develop technology when you’re operating on a lean employee base and have little flexibility in where you divert your budget?

Link by LegacyShield is a ready-made, customizable solution, offering customers a platform on which they can organize and track their investments with various providers as well as control the level and mode of engagement with both carrier and agent. Better yet, this tool allows for open dialogue between the carrier, distributor, and customer. In this collaborative environment, it’s much easier for the carrier and distributor to align and focus on the needs of the customer. The distributor no longer feels threatened by the carrier-customer contact because he or she is included in the process and the carrier can develop a rapport with its customers without damaging their agent relationships.


This convergence between insurance and technology is a burgeoning new market called InsurTech. While this market offers an unprecedented opportunity for insurers to evolve, the chief concern is that many operating in this space lack an understanding of how the industry operates. They’d sooner circumvent carriers and distributors altogether and develop their own disruptive model than spend time learning why the carrier-distributor-customer model works. Positioned smack in the middle of this market, what sets LegacyShield apart from its InsurTech competitors is that its founders have the industry experience and expertise necessary to successfully marry technology and insurance.

When technology and the selling of insurance are intelligently combined, we have incredible potential to help customers achieve financial security.

Dan Pierson

Dan Pierson

Dan Pierson is an insurance industry veteran, having run several insurance businesses and eventually selling a nationally recognized life insurance general agency. Dan started LegacyShield to help other insurance advisors grow their practices by focusing on the consumer experience.

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