How would you rate the overall health of the independent distribution channel? Is that health improving or declining?
The editors at Life Insurance Selling are beginning work on a series of articles that will explore the key challenges facing the future of the independent distribution model, including what can be done to rise up and meet these challenges. We want to bring the discussion about these threats to light. You don’t want to be the frog in the pot slowly being brought to a boil. Being aware of what is happening around you — however gradually — is important if you want to be able to maintain the viability of your model.
I would like some input from readers that could help us direct our coverage of the issues. Please answer the question below via the comment tool, and please feel free to elaborate on your responses and the threat issue in general.
Which issue would you consider to pose the most serious threat to the future of the independent distribution channel:
- A: It’s no longer self-sustaining. The independent channel has traditionally fed on a once-deep pool of career agents, but the feeder system is drying up as aging independent producers are retiring faster than they are being replaced.
- B: Increased competition from alternative distribution channels, such as the bank channel.
- C: Changing consumer buying habits, including the proliferation of online quote-and-buy sites.
- D: Continued public indifference, with life insurance penetration hovering around a 50-year low.
- E: Recruiting difficulties, as the industry has an image problem that prevents young people from being interested in life insurance as a career.
- F: Carriers reverting back to a focus on the career agent channel.
- G: Walmart, Facebook or another outside competitor entering the marketplace.
- H: The low-commission environment pressuring BGAs and IMOs to seek additional sources of revenue by diversifying into new markets.
- I: Something else. (Please specify via the comment tool below.)
- J: There are no serious threats; the channel is healthy and will remain healthy.
If the independent producer channel is going to remain the dominant distribution channel for life insurance and annuities, the industry will need to figure out how to stop the brain drain and start attracting more talented young people to replenish the aging producer workforce.