The Department of the Treasury and the Internal Revenue Service released new guidance that is “designed to expand the use of income annuities in 401(k) plans.”
By Linda Koco
Insurance distribution is definitely a work in progress. Take a look at these snapshots gleaned from various LIMRA reports, in advance of LIMRA’s 2014 Distribution Conference:
· Independent agents have led individual life annualized premium production for more than a decade, earning a market share at or above 50 percent in most years from 1999-2012. Market share reached a high of 56 percent in 2007-2008 but then dropped back to the 49 percent range from 2009-2012. (This channel includes brokerage, personal producing general agent and stockbroker/wirehouse firms.)
· Affiliated agents rank second in individual life production with a market share slightly above or below 40 percent from 1999-2012. (This channel includes the agency-building sales force, multiline exclusive agents and home service agents.)
· Distributors such as financial institutions and worksite marketers have earned a life production market share in the neighborhood of 5 percent over the same period, but from 2010-2012, they grew their share to 7 percent.
· Market share for direct distributors has hovered at or below 4 percent in all 13 years.
· Affiliated agents numbered an estimated 158,200 in 2013 — down 38 percent from the 40-year high of 256,735 in 1973.
· Affiliated recruits numbered an estimated 35,000 in 2013 — down nearly 94 percent from the high of 54,736 in 1975.
· Over the last 48 years, the career advisor channel has steadily increased the percentage of women among recruits. In 1965, women represented just 2 percent of all recruits in this channel, but by 1985, they represented 20 percent. By 2013, women represented 31 percent of recruits.
· The percentage of advisors who team with others has increased 8 percent since 2008. Today, one in five advisors said they team with at least one other advisor and share more than 20 percent of their revenue.
· Forty-three percent of today’s advisors specialize by client segment, typically by affluence or occupation.
· Fifteen percent of advisors who provide their clients with a retirement plan are more productive, but most advisors today still do not provide such plans.
· An agent in the multiple-line exclusive-agent (MLEA) distribution channel has, on average, 1,480 clients, 50 percent of whom buy only auto and home insurance from the agent.
· Since 2008, life insurance sales by MLEAs have grown by almost 10 percent.
· In the MLEA channel, nearly half of the agents are age 50 or older.
Source: Data gleaned from various research reports published by LIMRA in the past few years.
Linda Koco, MBA, is a contributing editor to InsuranceNewsNet, specializing in life insurance, annuities and income planning. Linda may be reached at firstname.lastname@example.org.
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