The fall of insurance agents: Germany

The analysis of tendencies within the typical shares of distribution channels in Germany shows that increasingly more general insurance lines clients decide upon to buy coverage directly from insurers.

Particularly, 7.3% of healthcare insurance in 2017 have been made via direct sales (together with sales through price comparison websites), as compared to the 6.7% in 2016, 15% of property and casualty insurance have been purchased through direct sales channels in 2017, compared to the 13.9% in 2016 (figures for assessment taken from GDV, Statistical Yearbook of German insurance 2018).

Moreover, the total number of agents has decreased by 21.34% from 2010 to 2017, whereas the number of insurance brokers has grown only by 5.88% from 2010 to 2017.

The rapid development of computer technologies, including internet, rising insurance premiums, adverse economic factors and the high level of computer literacy have prompted customers to look for insurance products online, also by comparing products of insurance providers to come up to the most cost-efficient solution.

Online insurance providers are rapidly developing into larger corporations and the more traditional insurers seek computer based technologies for increasing the efficiency of their sales operations. Under such circumstances, it is a matter of time when insurance agents will leave the market. Currently, insurance brokers still hold their positions by providing sophisticated insurance advisory services and support to their customers for commercial insurance products, but unless brokers offer ease of access and modern computer based solutions to their customers, the consequences outlined above may impact brokers as well.