LIMRA cleverly promoted last week’s 2012 Distribution Conference in Ponte Vedra Beach, Fla., with the line, “Just like Scrabble has evolved into Words With Friends, distribution needs to change to effectively reach consumers in today’s technology-driven world.” That’s a pretty good analogy, and one that the event’s program backed up.
The value of pursuing a multi-channel strategy and how technology is driving change within the traditional channels were common themes from speakers throughout the three-day event, which ran Feb. 22-24. Speaker after speaker hammered home how consumers are already operating in a multi-channel environment in other areas of their life, and that the next generation of sales talent will expect to operate in a multi-channel environment to interface with clients and prospects.
But another theme that drew plenty of attention was how the industry is reacting to the pressing issue of an aging independent producer workforce, as intermediaries and carriers alike expressed concern about where the next generation of sales talent will come from. The vibe at the conference indicated that financial institutions are increasingly being looked at as a way to deal with the challenges presented by the aging independent producer workforce. Financial advisors at banks, according to LIMRA research, tend to be in their late 30s while independent producers have a median age in the mid-50s.
“The banks are able to bring in a much younger agent,” said Pat Leary, assistant vice president, Distribution Research at LIMRA. While independent producers (47%) and affiliated agents (41%) still dominate individual life insurance sales, alternative distribution through channels such as financial institutions and direct sales have increased from 2% in 1983 to 12% in 2011. Leary told conference attendees he has seen a turning point with the banks. They are growing and dedicating resources toward maintaining that momentum to leverage the situation.
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The bank channel was the subject of two different breakout sessions during the conference, with one program titled, “Financial Institutions: Alternative Distribution or Mainstream Marketing?” and the other, “Opportunities Within Banks Today and 2020: Are You Ready?”
In the former session, Jim Swink, CLU, ChFC, who said his primary objective as a vice president at Raymond James is to increase the number of Raymond James advisors that use life insurance as a solution, said broker-dealers are recognizing that life insurance through the bank channel is a great revenue opportunity. He also said a key challenge with bank advisors is convincing them why they should utilize life insurance tools in their planning. “Unless they buy into the ‘why,’ they won’t listen,” Swink told attendees.