By Linda Koco
CHAMPIONSGATE, Fla. - Marketing will become increasingly important for life insurance and annuity distribution in the future, according to LIMRA executive James W. Kerley.
The sometimes overlooked business function will have even greater impact on the insurance business than mobile digital technology is having today, he said.
The chief membership officer of LIMRA intends to hammer home that prediction during his opening remarks here at the LIMRA’s 2015 Distribution Conference for Financial Professionals.
Many major insurance companies today continue to support face-to-face interactions between clients and agents, Kerley told InsuranceNewsNet in advance of the meeting. That’s the traditional approach to distribution that carriers have used to reach baby boomer clients. Much of the advertising they do focuses on that.
But in the next 10 years, he said, Generation X and Generation Y will have a “dramatic impact on how to buy things.” By then, most boomers will be retired and the younger generations will dominate. This shift will play a larger and larger role in how carriers — and agents — reach customers, said Kerley, who is also president of LIMRA Services. Marketing will be integral to this shift.
This change will be spurred along by industry sales trends. “Policy count (on life insurance sales) continues to go down,” he pointed out, “and 70 million U.S. households currently are underinsured for life insurance.”
A new role for marketing
Meanwhile, the younger generations make purchases online, use social media to obtain product information, and make use of 24/7 access for sales and service. Going forward, these preferences will have the effect of changing the definition of marketing and trigger a stronger relationship between marketing and distribution at insurance companies, he said.
Marketing commonly is thought of as the business function responsible for promoting products and services to consumers through advertising and other business activities.
Increasingly, though, marketing will be considered the business function that also supports social outreach, he predicted.
Marketing also will focus more on ensuring that there is consistent messaging to the public, from both companies and their agents.
In addition, marketers will place more emphasis on providing content to agents that they can use in their own social outreach efforts, he said.
In fact, “digital outreach is already a marketing function,” Kerley said. What will change is that marketing’s role will gain greater importance as it expands its functions to help attract new customers.
Who finds the customer?
The role of who finds the customer will change, as well, he said. “In the past, it was the agent’s job to go and find the customer. But increasingly, customers will find the insurance company. Some already do this by getting referrals, searching on websites, and communicating with friends and family on social media.”
It will be the marketer’s job to facilitate this, to make it so the company is findable.
To this end, corporate branding has become very important to the younger generations, he said. Generations X and Y “look for companies with a good brand presence.”
This applies to agents as well. Consumers look for agents and advisors who have brand presence in their communities.
In the case of career and captive agents, that brand presence will be established by the insurance company that each agent represents
In the independent agent channel, the branding will be a little more complex because the agents represent several different carriers. Kerley said branding there has two dimensions. On the one hand, the agents will be, and already are, looking to represent carriers with brand recognition. “They want to be proud of the companies they represent,” he said, and brand recognition factors into that.
But the independent agent also will need to develop a brand for the agency that aligns with the multiple companies the agency represents. It will be marketing’s responsibility to help harmonize the messaging.
In this evolving world, the carriers that do not have big advertising budgets or campaigns today will benefit from the expanded role of marketing. Such carriers will be able to compete more efficiently by using social media, Kerley said.
“They can do it (get their message out) smartly and can have dramatic impact on their target markets, which are often the same markets as served by independent agents,” he said.
Old versus new
The “old time agents” who don’t have a brand and who don’t use social media will be able to continue as they have always done — for example, with face-to-face meetings with clients, he said.
But because of all the digital media changes that already have occurred, “the way to building relationships with clients will increasingly be through use of a strong social media presence,” Kerley said.
Customers of all ages already are using digital resources to get information about agents and companies. As a result, “they are better informed, and look to the agent or advisor to help guide their thinking, increase their understanding and provide advice,” he said.
The digital space is becoming the new country club, he said. It’s the place where more and more business connections will be made. The marketers will be the ones who will help customers, agents and companies to meet up.
“We are just beginning to see what insurance companies can do in this area,” he said.
In one LIMRA survey, researchers found that 93 percent of life Insurance companies were already using social media with the public. More than half were actively using social media and, in addition, they had multiple initiatives in place.
InsuranceNewsNet Editor-at-Large Linda Koco, MBA, specializes in life insurance, annuities and income planning. Linda can be reached at [email protected].
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