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December 01, 2002 at 07:00 PM
By
Boca Raton, Fla.
To be successful distributing products through the insurance brokerage system, some companies are making brokerage distribution their main, and often only, focus.
That message emerged several times at “press room” sessions held here during the 21st annual meeting of National Association of Life Brokerage Agencies, Fairfax, Va.
The sessions are a series of chats with the press, conducted in tandem with–but in a separate location from–the NAILBA annual. They are arranged so that top company executives speak at allotted times about their companies, products and strategies. These discussions are free form, so the uniformity in message at the 2002 sessions–about the importance of one-channel distribution–was noteworthy.
“Ours is a unique strategy,” said David S. Lenaburg, president and CEO of the Legal & General America Companies. “We have a narrow focus on mortality risk products,” and “all of our business comes to us through the brokerage general agent market.”
L&G is the British owner of Banner Life, Rockville, Md., and its New York affiliate, William Penn Life.
Banners strategy is to stay competitive in the mortality (term life insurance) market, said Lenaburg. This is a very narrow focus, he allowed, and it requires a great deal of efficiency and a commitment to staying very small, he said.
Therefore, the company makes ample use of document imaging technology, maintains a “very flat” organizational structure and uses the brokerage general agent structure for distribution.
“We have no desire to deal with the direct seller directly,” he said, and to make this selling proposition work “the business has to come from the BGA channel.” This is so whether the seller is an independent agent who works with clients individually or an Internet distributor, he said.
In another session, B. Eugene Wraith, president of Lincoln Benefit Life, Lincoln, Neb., said his company has also endorsed a BGA-only approach to distribution.
Founded in 1938, this company has sold through the brokerage channel since 1984. However, in the last year, it narrowed its focus even further, Wraith said, by deciding to do business only with “NAILBA-type” (high volume and highly skilled) brokerage agencies.
As a result, this Allstate Life Insurance Company subsidiary no longer has an alternate distribution system. All Lincoln Benefit business comes through the 155 NAILBA-type organizations with which it has contracted, Wraith said.
“Weve always been known for our product development, and for release of a lot of competitive products,” he said. But he added that the company is also known for its relationships–for caring about and helping the people with whom it deals.
