Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Life Health > Life Insurance

Why Its Critical To Do Research

Your article was successfully shared with the contacts you provided.


Phoenix, Ariz.

“Marketing without research is not marketing,” said Thomas Hayes at a meeting here. In fact, research is the very basis of marketing, said Hayes, a professor of marketing at Xavier University in Cincinnati, Ohio.

The remarks came during a breakout session at the annual meeting last month of the National Association of Independent Life Brokerage Agencies, Fairfax, Va.

During the session, Hayes reported on results of his own researchconcerning the NAILBA membership–in September 2003. It was a quantitative study that drew a 29% response from NAILBA members, a percentage that is considered to be a “good return” in research circles, he said.

In revealing some of the findings, Hayes cautioned that a quantitative study is like a snapshot, a look at things at one point in time.

A firm wont know how significant the findings are until the firm has 3 or more similar studies, he indicated. This will reveal a trend.

As for the NAILBA study, this is the first such statistical evaluation of the membership, he noted. The organization will conduct more studies in the future.

Among the findings: “Overwhelmingly, the NAILBA members identified independent agents as their primary customers,” said Hayes, noting that 97% of respondents picked this channel.

Renewals and recurring fees accounted for 21% to 30% of total revenue at 24% of the respondentsa figure Hayes called “significant.”

And term insurance accounted for more than 51 applications per week in 19% of the responding agencies, and between 31 and 50 applications per week in 18% of the agencies.

This term app flow was substantially larger than the app flow reported for whole life, variable life, annuities and long term care insurance. Furthermore, 34% said term insurance represents more than 51% of annualized commissionable premiums.

However, when asked to identify which product lines saw increases, decreases or no change in applications in comparison to last year, 34% of the agencies said whole life apps had increased, and 25% said long term care insurance apps had increased. Only 16% said term life apps had increased (while 28% said term life apps have remained the same).

What about annuities? The answers were “all over the place,” said Hayes, with members reporting increases, decreases and no change almost equally.

When asked to identify the importance of brokerage services to agents, a substantial majority said case management, running of proposals and case preparation were “extremely important” services. And “quality service” topped the list of the factors the agencies identified as being important to their future success.

Which distribution channel did the respondents think will be most effective in growing their brokerage business in the next 24 months? Career agents topped the list, followed by CPAs and banks, said Hayes.

And which product line will be most important to the agencies over the next 24 months? Long term care insurance was at the top of the list, he said.

Businesses need to do research “because you are not your consumer,” Hayes said, and because “things change.” The research helps the business to understand what motivates and influences its customers and to spotlight trends, he explained.

“You cannot afford not to do it,” said the professor. Its an investment, not a cost, he said.

“Sometimes, we spend so much time thinking about what we do that were not close to our customer anymore,” Hayes said. “Worse, the customer who was there yesterday may not be the one who is there now.”

But often, business people become so focused on the day-to-day process that they dont see the changes, he continued. This is why research is essential, he said.

As for types of research, he said firms can use “qualitative” research, like focus groups and one-on-one interviews, to generate ideas, explore feelings and backup quantitative research findings.

But the findings in these tools are not representative of the general population, Hayes said, adding that businesses should make sure to “never ever, ever, ever, ever use focus groups to create marketing strategy.”

By contrast, “quantitative” research, done in surveys of random samples of a population, can be projected to a larger population, he said.

In sum, Hayes said, “there always is value in information, if youre going to use it.”

To benefit most from research, he said, be sure that every question asked relates to the purpose of the research.

Also, be willing to make changes based on the findings, he suggested, so that “what gets measured, gets managed.”

Reproduced from National Underwriter Life & Health/Financial Services Edition, December 5, 2003. Copyright 2003 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.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.