The UK consumer direct insurance industry: a role model for relationship management?

Abstract

This article analyses the reasons for the rapid growth of the direct insurance industry. It examines the value chain in insurance and shows how the approach taken by Direct Line simplified the value chain, reducing costs and accelerating the process of meeting customer needs, using an innovative relationship marketing approach. The article then analyses the state of direct insurance today, and how traditional insurance companies have tried to cope with the inroads made by direct insurers. It examines whether the direct approach to managing customers necessitates disintermediation, considers whether the presence of intermediaries in the value chain hinders companies' attempts to manage relationships with their customers, and recommends how to overcome some problems that arise in this situation.