Wall Street street sign (Photo: Allison Bell/ALM) (Photo: Allison Bell/ALM)

Some insurers seem to act as if life insurance policies and annuities will just show up in consumers’ lives, like paper clips, or rubber bands.

Executives from some other insurers occasionally admit to investors and securities analysts that they still need live humans to persuade other live humans to spend money to protect themselves against mortality, morbidity and longevity risk.

Executives from Prudential Financial Inc. and Lincoln Financial talked about the live human factor earlier this month at investor day meetings.

Here are some glimpses of what they talked about, with respect to live-human advisors, drawn from the event slidedecks.

Prudential Financial

Prudential sometimes seems to be putting more emphasis on its asset management arm, PGIM, than on its insurance operations. But the company provided a major look at its life and annuity operations at its investor day event.

A team of executives emphasized that they believe the company’s financial wellness program, which is aimed at the company’s retirement plan and group insurance plan enrollees, will help Prudential financial advisors as well as the retirement plan and insurance plan enrollees.

“Financial Wellness complements our existing distribution capabilities by expanding our addressable market,” Prudential executives said, in a “key messages” slide.

1. The Market

Only 27% of U.S. households with less than $100,000 in investable assets have financial advisors, the executives said.

About 67% of U.S. households with more than $500,000 in investable assets do have advisors — but 33% don’t, Prudential executives said.

2. The Financial Wellness programs

About 3,100 of Prudential’s group plan clients now offer digital wellness programs, and about 600 offer employees face-to-face meetings with advisors, according to one slide.

About 20% of the employees who attend the face-to-face meetings become Prudential retail customers, Prudential said.

Prudential said, on another slide, that the financial wellness program now has about 200,000 participants with access to either digital financial wellness tools or face-to-face advisor meetings.

3. The Financial Wellness program-to-advisor funnel

About 2,000 of financial wellness program users have become retail customers.

Prudential is hoping that 5,000 will become retail customers this year, and that 1 million will become retail customers by 2025.

Lincoln Financial

Lincoln focused more on telling investors and analysts that it has a huge number of live humans selling its products.

“Lincoln’s distribution is industry leading and a major competitive advantage,” the company said. “Distribution is run as a business and attracts top talents with defined career paths.”

Because distributors like Lincoln, they give the company’s products broad product shelf space, the company told investors.

1. The team

The company said it distributes products of all kinds through about 800 wholesalers and 92,000 active advisors.

The average Lincoln sales rep has spent 10 years with Lincoln and the average new hire has 16 years of industry experience, the company said.

Lincoln said its wholesale distribution team is adding more relationships with insurance marketing organizations, registered investment advisors, and property and casualty companies.

2. What the team can do

Lincoln said the large size of its sales force helps the company pivot when conditions change.

Between 2013 and 2018, for example, the company cut the percentage of variable annuity sales associated with living benefits guarantees to 55%, from 91%, the company said.

When Lincoln added an indexed variable annuity contract in May 2018, the wholesalers were able to help the company get 2,700 advisors to sell the new contract, Lincoln said.

3. RIAs

Lincoln described RIAs as a “growing channel for annuities that is highly underpenetrated.” The company said it’s aiming at the RIA market with products come with no commissions or surrender fees.

Lincoln’s RIA channel annuity sales increased to $220 million in 2018, from $35 million in 2015, the company said.

Resources

A copy of the Lincoln Financial slidedeck is available here.

A copy of the Prudential slidedeck is available here.

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