Insurers Add New Agents with Diversity

By Cyril Tuohy InsuranceNewsNet

Five years after the end of the Great Recession, life and annuity companies are hiring again but show a preference for seasoned advisors, especially those who can penetrate cultural and generational markets, according to the consulting firm Conning.

“Field recruiting has been focused on responding to population growth in key market segments, and on the need to reflect the increasing diversity of the American consumer,” said Scott Hawkins, an analyst with Conning.

Distributors realize many producers don’t reflect the changing demographic makeup of up-and-coming life insurance and annuity buyers, and many companies have made an effort to recruit more women, Hispanics, African American and Asian producers.

With companies hiring again in earnest, it’s a good time for life and annuity carriers to reassess the composition of their distribution force.

Industry analysts often point out that if the industry is serious about selling more protection and retirement products, then life and annuity producers need to be from the communities they aspire to sell to.

The Conning report, titled “Individual Life and Annuity Distribution and Marketing Annual,” also found that the stiff competition to attract the best advisors is moving beyond simple fee and commission-based compensation metrics.

Producers value training and technology, and professional and practice development as important aspects of the compensation package, the report found.

Advisors and consumers have raised their expectations regarding Internet-based transactions and social media, and carriers are being forced to respond even as carriers have cautiously approached social media because of regulatory and compliance issues.

Steven Webersen, director of research for Conning, said insurers “continue to focus on mobile and social media strategy development.”

Mobile and social media strategies exist at all levels of the industry, not just among the large carriers, he also said.

Last year, 406 insurance companies reported statutory sales. The top-ranked 75 insurance companies based on sales generated 90 percent of total sales reported in 2013, the study found. Of these 75 insurers, 11 used captive/career distribution channels, 52 used broker-independent agent channels, four used direct-to-consumer marketing channels, and eight used a combination of the three channels, the report found.

Across carriers of all sizes, the broker-independent agent channel was responsible for 70 percent to 85 percent of total sales, which “indicates that single-channel strategies are dominant in terms of number of companies,” the report said.

In terms of annuity sales, the broker-independent channel accounted for 59 percent of all annuity sales in 2013, followed by the captive/career channel with 28 percent share and other channels representing 9 percent share, the report found.

The multiline exclusive agent channel represented 3 percent of total annuity sales in 2013, the report also found.

Large insurance carriers generated 62 percent of annuity sales from the broker-independent channel last year, while midsize carriers generated 48 percent of sales through that channel, the report found.

Larger carriers sell more variable annuity (VA) products than midsize carriers so it stands to reason that the broker-independent channel has the highest market share among the largest insurers since by law registered representatives are allowed to sell VAs.

Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at [email protected].

Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at [email protected].