Alternative Distribution Evolution and Opportunities, from Affinity to Digital and Embedded Insurance

Written by:

Othmane Akesbi, Vice President, Business Initiatives Global Accounts

Diana Bosworth, Knowledge Management and Information Specialist, Global Actuarial Pricing and Research (GAPR) 

Alternative distribution is all about enabling insurers to reach new customers, wherever they are.

This is accomplished by joining forces with partners who already have an established customer base or can acquire new customers effectively, in order to market insurance products to these potential policyholders.

While alternative distribution is not a new concept for life insurers, the landscape has been evolving rapidly. Insurers can only realize the full potential of alternative distribution if they are aware of the breadth of players that are active in this space and understand the range of approaches available to unlock the value of partnerships, taking into account each partner’s strengths and limitations and leveraging modern data, technology, and design capabilities.

As a first step, let’s examine the landscape of alternative distribution partners, starting with some of the more traditional ones, before discussing emerging digital entrants.

Bancassurance is the most established form of alternative distribution globally and one of the most important channels for life insurance in many countries, particularly in Europe, the Middle East, Africa (EMEA), Asia, and Latin America1. Bancassurance models involve distribution agreements between insurers and banks, joint ventures, and integrated businesses where both the bank and the insurer are part of the same group. Banks provide insurers access to their large customer bases and omnichannel distribution infrastructure, and in return, receive new fee-revenue streams and the ability to offer more comprehensive products and services.

Bancassurance is the most established form of alternative distribution globally and one of the most important channels for life insurance in many countries, particularly in Europe, the Middle East, Africa (EMEA), Asia, and Latin America.

Telecommunication companies (TelCos) have become another popular distribution channel,2 particularly in emerging markets where consumers are more likely to have a mobile phone than a bank account. TelCos also provide a payment infrastructure alternative to banks and card companies. Retailers, from large department store brands3  to supermarkets and grocery stores,4 also act as life insurance distributors in some markets. Some of these alternative distribution arrangements are achieved through partnerships between distributors and insurers, and in other cases, distributors set up insurance businesses and acquire their own licenses to offer life insurance products directly to customers.

New Players in a Changing Game

While this competitive landscape may seem crowded, new entrants and novel distribution models are emerging all the time. In fact, alternative distribution is in the throes of a revolution spurred by increased adoption of mobile platforms, and higher consumer expectations for digital experiences across all industries. Increased venture capital funding and the COVID-19 pandemic have only fueled these trends.

Emerging alternative distribution players come in many forms, including:

  1. Fintechs such as neobanks or challenger banks that provide banking services via mobile apps or websites,5 online lenders,robo-advisors or money management apps,7 and others.
  2. Consumer apps and digital services providers:
    • In select markets, “super apps” already bundle a wide variety of services, like ridesharing, food delivery, entertainment, and more. Some of these companies are adding insurance to their offerings.8
    • Some online retailers and consumer e-commerce marketplaces are doing the same.9
    • More specialized consumer apps and service providers are also partnering with insurers. Examples include wellness apps or legaltech startups offering digital wills and providing natural touchpoints to engage customers about their life insurance needs.10
  3. New digital insurance distributors from single-brand companies11 offering one or a few products to multi-brand distributors,12 aggregators, and comparison websites that offer a wider range of products and services not necessarily limited to insurance.13 Distributors often maintain their own B2B2C (business-to-business-to-consumer) channel partnerships and referral programs,14 which can bring down customer acquisition costs.

These categories are not exhaustive, nor mutually exclusive. Some consumer apps offer fintech services, just as some digital distributors provide other consumer products and services beyond insurance. There are also many data and technology vendors providing enabling solutions to both insurers and distributors.

The question is: How significant will these emerging channels become? Most are relatively new to life insurance. While in theory all have growth potential, time will tell what models ultimately achieve success at scale.

Digital Innovation Fuels an Expanding Alternative Distribution Landscape
Alternative Distribution_graphics-01

Expanding Possibilities Within Distribution Channels

While life insurance distribution channels have been multiplying, so too have opportunities to generate more value from any given distribution partnership, as illustrated by the growing interest in so-called “embedded insurance.” These opportunities can be described along a continuum, differing based on the level of integration and collaboration needed between the insurer and channel partner, and based on the goals and constraints of the respective parties.

Alternative Distribution_graphics-02-

To maximize the value of any distribution partnership, both parties should first understand and agree on the objectives to achieve and any applicable constraints.

While life insurance distribution channels have been multiplying, so too have opportunities to generate more value from any given distribution partnership, as illustrated by the growing interest in so-called “embedded insurance.”

Starting on one end of the spectrum, insurers may be motivated to form a distribution agreement with an affinity partner purely to REACH a new pool of customers. In its simplest form, this approach involves marketing insurance products to a list of prospective customers through an outbound campaign, for example using a call center, direct mail, email, or mobile.

However, to realize more value from a distribution partnership, the insurer can PERSONALIZE offers by leveraging a partner’s existing customer insights and relationships. Insurers are already moving in this direction, for example, by leveraging banking data to better understand customer needs as well as to enhance risk assessment and selection, and tailoring offers based on those insights. Such approaches can help increase conversion rates, reduce customer acquisition costs, and improve unit economics. Personalization techniques are subject to data availability, privacy considerations, and regulations. Still, as open banking and open data models continue to grow in popularity, opportunities for data-driven personalization in channel partnerships seem likely to proliferate in ways that are mutually beneficial to the customer, the distributor, and the insurer.

To understand the value of personalization, simply observe a typical shopping mall or High Street. Shoppers slip in and out of stores, peering at displays and examining merchandise. Occasionally, a salesperson approaches, tentatively, to ask if a customer needs help. Now imagine that same attendant not only knows what customers need, but also what type of offers they would be most receptive to, and their likelihood of accepting an offer. With such superpowers, how much more effective would that salesperson be at targeting customers and closing sales? Personalization using partner data promises to empower life insurers in just this way, providing the insights and opportunities necessary to reach the right customers at the right times, and with the right offers.

Diving deeper, there may be opportunities to INCORPORATE the life insurance offer directly into the partner’s customer journey. The idea? Identify natural connection points, moments when a prospect can be presented with life insurance offers in a way that is as frictionless as possible, perhaps even expected. For example, a home buyer obtaining a mortgage, or a parent preparing a digital will, may be offered the option to easily purchase life cover at the same time.

Finally, it can make sense to COMBINE insurance with the partner’s product or service, such that the customer does not have to take any additional action because life insurance is already included in their purchase. In some cases, the cost of such cover may be subsidized by the insurer, the distributor, or a combination of the two. Typically, the level of coverage provided is limited, but still enhances the value the customer receives from the purchase. This technique helps create awareness about life insurance and an opportunity to establish new customer relationships. The insurer can engage the policyholder to discuss any coverage gaps, which can then lead to up-sell and cross-sell of other products to satisfy those needs. For example, some TelCos offer a basic level of insurance cover with their mobile plans.15 Also, some bank accounts16 or credit cards17 include basic levels of life insurance cover as customer perks and provide customers the option to purchase additional cover, if needed. A similar approach could be applied to combine complementary insurance offerings, for example life insurance with travel or home cover.


The alternative distribution landscape for life insurance is rapidly evolving, presenting growth opportunities across at least two dimensions:

  • First, the breadth of potential alternative distribution partners available is growing and includes both established and emerging players. Insurers should identify which relationships are good fits and offer strong untapped potential. All else being equal, companies and organizations with established customer bases, strong brand recognition, or high customer engagement tend to be better candidates.
  • Second, insurers should think about how to make the most of any given distribution partnership. Beyond simply reaching a new customer base, insurers can explore different ways to leverage the partner’s strengths to deliver a more compelling customer proposition and lower customer acquisition costs.

By fully capitalizing on partnerships, alternative distribution and embedded insurance can be efficient growth engines for life insurance, help expand its reach into underserved markets, and contribute to closing the global protection gap.

At RGA, we are eager to engage with clients to better understand and address the industry’s most pressing challenges together. Contact us to discuss and learn more about RGA’s capabilities, resources, and solutions.  



  1. Global Insurance Pools Statistics and Trends Distribution.pdf (
  2. Tigo Family Care: Free Mobile Life Insurance | Workshop Cases (;
    Mobile Money for  the Unbanked: Emerging Practices in Mobile Microinsurance.pdf; ( Life Malaysia pioneers in first telco-assurance product with U Mobile ( expand insurance offerings due to COVID-19 – GlobalData;
    Orange Life Insurance | Calculate your Insurance (
  3. El Corte Inglés and Grupo Mutua announce strategic alliance (
  4. Now grocers go after the life insurance market | Money | The GuardianHollard partners Melcom to widen insurance penetration – The Business & Financial Times ( to sell life insurance at its convenience stores | The Japan Times
  5. Starling Bank and Anorak team up – Starling BankIntroducing: Anorak insurance for sole traders – Starling BankNubank LifeRappi’s financial arm in Brasil launches insurance and will have a digital account in 2022 ( aims to disrupt insurance category with new on-demand insurance product — N26
  6. Ladder And SoFi Partner To Power A New Approach To Life Insurance (
  7. Plum teams up with Anorak to bring life insurance to millennial savers ( launches new digital life insurance product (*TRADE Launches Digital-First Life Insurance Offering (
  8. Traveloka – Your Lifestyle SuperappInsurance | Grab SGChubb Corporate Newsroom – News Releases
  9. Sun Life Financial and Lazada sign innovative deal | 2018 | Sun Life PhilippinesTerm Life Insurance for Parents from Happiest Baby & Haven Life
  10. Life Insurance Pioneer Ethos Adds Wills, Trusts Through Acquisition of Legaltech Innovator Tomorrow Ideas (éa Life launches with exciting new life insurtech Bequest | Covéa Insurance (
  11. Life Insurance Made Easy | PolicyMe
  12. Choozi – The life insurance comparison specialistsCompare & Apply for Life Insurance Online | Life Simpli
  13. Life Insurance: Get Free Quotes & Compare Policies | PolicygeniusInsurance – Compare & Buy Insurance Plans – Health, Term, Life, Car ( Insurance Quotes for your Car & Life at UAE Insurance, Credit Cards, Banks | yallacompareCompare Insurance With Thailand’s Leading Online Insurance Broker (
  14. PolicyMe Affiliate Program | PolicyMePartnering with us | bolttech
  15. Telcos expand insurance offerings due to COVID-19 – GlobalDataTigo Family Care: Free Mobile Life Insurance | Workshop Cases ( POST COVID-19 DIGITAL PARTNERSHIP MODELS (
  16. Value Account with Free Life Insurance | Emirates NBD
  17. FAB LIC(I) Signature Credit Card | First Abu Dhabi Bank – UAE (;  Credit Life Insurance | UnionBank of the Philippines (
More from this Author