Does Wholesale Distribution Increase Costs For Insureds?

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There is a long-standing assumption among insurance buyers that wholesale distribution is more expensive than retail distribution. Last week you were reading Governor Signs Insurance Bad Faith Statute For Auto Insurers. This week we’re bringing you:


How insurtechs are accelerating growth*



Kevin Stein learned quickly in early 2021 how much a contest win would jumpstart the growth of Delos Insurance, an AI-focused insurtech MGA he co-founded and runs in San Francisco.

The start-up, which provides home insurance in California for customers facing wildlife exposure, won the Angel Investor Prize on March 12 as part of InsurTech NY’s annual Early-Stage InsurTech Competition. Its prize: more than $100,000 in credit for legal help, technical marketing, advisors, development resources, coaching, hiring advice, Microsoft services, program development, speaker training, tax and accounting help, and technology. There’s also one more crucial thing.

“We pitched to some incredibly well-connected folks [and] got enough exposure with them that they started talking to their friends and colleagues and word started to get around,” Stein said.

InsurTech NY recently started taking applications for its third annual competition focused on early-stage start-ups, where three winning teams will split $200,000 in prizes. Finalists are chosen based on their growth potential and market opportunity and the top teams present their business plans at the InsurTech Spring Conference, which is planned for March 7 in New York City.

Find out more in-depth here.


Now Safe Drivers Can Get a Break on Life Insurance*



Under a program being offered by Boston-based life insurer John Hancock, safe drivers can earn reward points towards discounts on wellness products and their life insurance premiums.

John Hancock Vitality program members are eligible to earn points and discounts for achieving safe driver status through a qualified telematics safe driving program. Allstate’s Drivewise is the first safe driving program eligible. John Hancock, the U.S. division of Toronto-based Manulife, plans to add insurers with other telematics programs in the future.

Eligible policyholders must participate in the John Hancock Vitality PLUS Program that offers education, support, incentives, and rewards designed to help customers live longer, healthier lives.

The insurer points out that crash injuries are a leading cause of death globally for all age groups and auto collisions are responsible for more than four million injuries annually, many of which have long-term health impacts.

“Offering incentives for safe driving is in direct alignment with our mission of helping customers live longer, healthier lives,” said Brooks Tingle, president and CEO of John Hancock Insurance. “Preventative behaviors are at the core of the John Hancock Vitality program. We’re committed to supporting our customers in proactively managing their physical, mental and financial wellbeing – something that has become even more important throughout the last two years – and we’re proud to offer this new benefit to enhance these efforts.”

Find out more in-depth here.


Does wholesale distribution increase costs for insureds?*



There is a long-standing assumption among insurance buyers that wholesale distribution is more expensive than retail distribution. Now, the Wholesale & Specialty Insurance Association (WSIA) has released a study that clears up the debate once and for all.

Analysis conducted by Conning, Inc. on behalf of the WSIA confirms that wholesale insurance distribution does not increase the cost of the transaction to the insured.

Conning’s Insurance Research Division examined distribution costs, cost structure, and ratios between the wholesale and retail channels from 2016 to 2020. The firm found that the total non-loss cost ratio for the wholesale composite was lower than the retail composite by 1.8 percentage points. In fact, wholesale non-loss cost ratios were lower in each year of the study, from 2016-2020.

This mirrors the results of earlier analysis published by Conning and the WSIA in 2016, which looked at the same data from 2010-2015 and found that the non-loss cost ratio for the wholesale composite was lower than the retail composite by 1%.

“Our mission was to prove that the introduction of a wholesaler in the transaction does not significantly increase the cost of the transaction,” said Brady Kelley (pictured), WSIA executive director. “We’re not here to say wholesale is cheaper. We’re here to say wholesale adds a lot of value to the transaction at no additional cost.

Find out more in-depth here.


Finding highly affordable leads to keep sales coming in

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