Selling insurance online in the EU: how distribution rules shape digital journeys

The framework behind online insurance sales

The Insurance Distribution Directive applies to insurers and intermediaries distributing insurance in the European Union, including through websites, apps, comparison tools and call centres. It is implemented through national law and supervised by national authorities, so details vary by country.

The directive’s core principle is that distributors must act honestly, fairly and professionally in accordance with the best interests of customers. For digital sales, that principle shapes how products are presented, which questions are asked and how customers are guided to a decision.

Demands and needs come first

Before a contract is concluded, the distributor must specify the customer’s demands and needs on the basis of information obtained from the customer. Any contract proposed must be consistent with those demands and needs.

In a digital journey, this means the questions asked before a quote are not just pricing inputs. They must help establish whether the product is suitable for the customer’s situation. A journey that jumps straight to the cheapest price without understanding needs risks selling products that do not fit.

Needs questions

Collect information about the customer’s situation and what they want to protect.

Consistency check

Ensure proposed products match the stated demands and needs.

Clear explanation

Show why the product fits and what it does not cover.

Standardised information

For non-life insurance products, customers must receive a standardised insurance product information document before the contract is concluded. It summarises the type of insurance, main risks covered, exclusions, obligations and payment information in a consistent format.

Digital journeys should present this document at the right moment, not bury it in a list of downloads after purchase. Customers should also receive clear information about the distributor, the nature of any advice, remuneration and complaint procedures where required.

Advice, conflicts and remuneration

Some online journeys provide advice, meaning a personal recommendation. Others provide information without advice. The customer should understand which one applies. When advice is given, the recommendation must be explained and suited to the customer’s needs.

Distributors must also manage conflicts of interest and disclose the nature of remuneration where required. Comparison ranking, sponsored placements and commission structures should not mislead customers or push them towards unsuitable products. Insurance-based investment products carry additional suitability and disclosure requirements.

Product governance

Insurers and distributors must follow product oversight and governance requirements. Products are designed for identified target markets, and distribution strategies should reach those markets. Digital channels make it easy to reach everyone, but reaching everyone is not the same as reaching the right customers.

Marketing targeting, eligibility questions and journey design should reflect the target market. Monitoring data such as cancellations, claims complaints and early lapses can reveal whether products are reaching the wrong customers.

Records and digital evidence

Digital journeys produce valuable evidence: the questions asked, answers provided, documents shown, advice given, consents collected and the final product chosen. That evidence should be stored securely and linked to the policy record, so the distributor can demonstrate what happened if a complaint or supervisory review arises.

Good records also support improvement. Drop-off points, confusing questions and frequent customer contacts show where the journey can be made clearer without weakening protections.

This article summarises general EU principles. National rules and supervisory expectations vary, so insurers and intermediaries should confirm requirements with compliance advisers.

Where this sits in what we do

This article covers one decision inside a wider engagement. The solution page sets out how that engagement runs, what it includes and what it costs to find out.

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