Close Close
ThinkAdvisor

Life Health > Life Insurance > Permanent Life Insurance

Typical Life Distributors Report Stable or Growing Revenue: Survey

X
Your article was successfully shared with the contacts you provided.

What You Need to Know

  • Sixty-five percent of the participating firms said their revenue was higher in 2020 than in 2019.
  • Seventy-seven percent said they expected their 2021 sales to be higher than their 2020 sales.
  • And 23% said they have not been successful at hiring producers under age 40.

Many U.S. life insurance distributors told a survey team that they ended up doing well in 2020, and again in 2021, in spite of the COVID-19 pandemic.

About 60 brokerage general agencies and independent marketing organizations filled out questionnaires for LIMRA and the National Association of Independent Life Brokerage Agencies in September 2021.

Despite the effects of the pandemic, 43% of the participating BGAs and IMOs said their revenue was higher in 2020 than in 2019, and 22% said their revenue was about the same, according to the LIMRA-NAILBA survey report.

Just 35% of the participating firms said their revenue had decreased.

The picture was even brighter in 2021: 77% of the participating distributors said they expected sales to be higher for all of 2021 than in 2020. Just 8% were expecting revenue to decrease.

The BGAs and IMOs are hungry for talent: 77% said one of their top three business priorities is growing their networks of producers and advisors.

Producer/advisor network growth was the distributors’ favorite business priority.

Just 2% of the distributors said they were cutting the number of employees in 2021.

Survey Constraints

The LIMRA-NAILBA survey was voluntary.

Thriving life distributors might have been more likely to participate than struggling distributors were.

The Future

LIMRA and NAILBA found that some life distributors are nervous about the future: 61% agreed with the statement that “differentiation among intermediaries is becoming more difficult, making competition for shelf space more intense,” and 72% agreed that the number of BGA and IMO mergers and acquisitions is likely to increase over the next three years.

For the distributors, one major challenge is hiring: Just 13% described themselves as being very successful at recruiting new producers under the age of 40, and 23% reported that they are not successful at doing that.

Some of the distributors said they expect the role of independent distributors to grow, because of lack of insurer support for new agents.

Other distributors expressed concern about the effects of prolonged low interest rates on the supply of life insurance.

“I think BGAs will have the same market share of life sales of [the] overall market, or slightly higher,” one told the survey team. “How much is being sold three years from now is the concern.”

Another distributor observed that some carriers are merging, or pulling out of life distribution.

..

(Image: Diego M. Radzinschi/ALM)