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Do Independent Agents Have A Future? NAILBA Speakers Say 'Yes'

By Linda Koco

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Do Independent Agents Have A Future? NAILBA Speakers Say Yes

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Dallas

The independent agency system definitely has a future, asserted Charles M. Kavitsky, senior vice president and chief marketing officer of Allianz Life Insurance Company, Minneapolis.

His remarks came during a special press-only “CEO interview” at the annual meeting here of National Association of Independent Life Brokerage Agencies, McLean, Va.

People who predict the agency system will collapse within the next 10 years “dont understand what the (agency) people do” in their client relationships, he maintained.

The professional agent influences people to act, he said, and “they sell (insurance) for the need,” not as a commodity.

Kavitsky said he and his company have “deep respect” for the brokerage and independent agency distribution channel. “Well bet the farm this way.”

At an earlier press-only conference, Ken Olson offered similarly strong support for the brokerage system. “Were completely committed to independent brokerage,” said the senior vice president and national sales manager of Zurich Life, Long Grove, Ill.

Especially in the last nine months, Olson said, Zurich has been operating at a high activity level to align itself with the independent agent. “Were looking for events of impact,” he said, “and were looking to create events of impact with the agent.”

In particular, the company is concentrating more on offering “solutions,” he said, and to do that via “packaging.” In addition, although it continues to sell term insurance, it is seeking to expand its permanent life sales. In fact, Olson said, Zurich is looking for “accelerated growth” in permanent and “moderate growth” in its term. Hence, the companys emphasis on “solutions” and “packaging.”

Some of the packaging may occur via creation of product families, he said. But it will also focus on using technology to assist the sale at the broker level–”how we quote, for instanceand how we show commuted values on our term product.”

Such brokerage-friendly comments resonated with the overall mood of the meeting. The association was celebrating its 20th year, so its leaders made a point of emphasizing how it, and the independent brokerage system, have gained industry acceptance and stature.

As Charles D. Rumbarger, chairman of AMG in McLean, Va., put it: “Weve gone from being unknown and disrespected to a position of influence.” Over 1000 attended the meeting.

Underscoring this message of longevity and increased prominence, the association presented awards to all 20 former NAILBA chairmen.

It also recognized all the companies that have supported NAILBA and the independent brokerage system in prior years. (The honored included four whose companies or precursors supported NAILBA in all 20 years: American General Brokerage, GE Financial, ING Life Group, and Zurich Life.)

Kavitsky, in his pressroom talk, reflected on how “alternative” distributors sometimes say theyll replace the independent agent. But he says he tells them, “Were doing more business than you are, and were thriving.”

The reason why Allianz is so committed to the brokerage system, he said, is that the company believes the client needs a professional to make recommendations.

Direct sales, such as that via television or the Internet, cant do that, he contended.

At Allianz, the focus is on developing approaches to wealth management, through asset accumulation, protection and distribution, he noted. “Were looking for creative ways to do that.” The company is also looking for people who know how to bring solutions–such as long term care insurance–to clients.

It is the ability to provide informed recommendations that it is seeking.

To deepen its own relationships with agents, he says the insurer is developing video conferencing capabilities and accentuating its telephone work. It plans to videoconference with agents, and “we feel the agent/representatives will be doing the same thing with their clients.”

He predicts this will lead to some agents adopting a type of “virtual office” approach to their work. But they will still be using their skill to provide clients with information critical to their needs, he said.

Producers who work with high net worth clients wont be the only ones doing this, Kavitsky predicted. “I see this happening across the board.”

Allianz intends to help agents provide comparative information to clients, he said. “This wont be focused on product features, but rather on what it (the product) means to the customer.” Again, the purpose is to help the agent give recommendations, he said.

In the future, there will be commoditized sales and lots of competition, Kavitsky predicted. “But independent agents have nothing to worry about.”

At the meeting, Edward R. Murray, principal of Murray and Zuckerman, Schenectady, N.Y., was elected chairman of NAILBA. He succeeds Seixas G. Milner Jr., principal of the Milner Agency/LifeMark, Atlanta. The new chairman-elect is Jack Dewald, president of Agency Services Inc., Memphis, Tenn.

The associations Mooers Award for contributions to the brokerage business and the independent distribution system went to Patricia L. Joline, principal Joline Associates, Shrewsbury, N.J.

Reproduced from National Underwriter Life & Health/Financial Services Edition, December 3, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.

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