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Is insurance a commodity?

The commoditization (or commercialization) of products means consumers are no longer distinguishing differences in brands, regardless of who made them.

Given the product variations and efforts on market and service differentiation, it isn’t easy to define insurance products as commodities. However, carriers have freedom in their ratings, market experiences, and services to truly differentiate (or distinguish themselves) from others.

Certain insurers often struggle to differentiate their products, given that industry regulators and market conditions force them to offer similar coverages and definitions.

By designing intuitive products, adding risk appetite options to the buying process, and using online platforms to support self-education and product awareness, insurers could design digital offerings that ensure clients purchase the right insurance.

Another option to consider is the Hybrid digital model, which would help guide user experiences and educate customers, while engaging advisors to ensure purchasing success.

To find out how this may affect your coverage, contact your insurance agent or broker.

Source: https://www.canadianunderwriter.ca/brokers/opinion-is-insurance-a-commodity-1004178273/