71% Of BGAs, IMOs Report Success Adding Young Producers

Industry trade groups LIMRA and NAILBA released a multi-component research study to learn more about brokerage general agencies (BGAs) and independent marketing organizations (IMOs) in the United States.

"The goal was to gain a better understanding of the BGA/IMO marketplace, its composition, challenges, and opportunities," the organizations said in the study.

The study provides a revealing snapshot on where producers are two years into the COVID-19 pandemic, how the evolution with BGAs and IMOs is proceeding, and how recruitment of producers is going.

About 40% of producers said they are focused on the middle market -- $100,000 to $249,999 in investable assets:

A majority of BGAs and IMOs said they expect to increase their producer force over the next three years:

In a surprising finding, 71% of BGAs and IMOs reported success recruiting young producers to join their firms. The industry has long struggled to develop new and younger producers.

Only 17% of respondents say their expectations for producers have changed due to the pandemic. That means more virtual selling, more technical skills, or some other additional skill or license.

Extensive Survey

In September 2021, the following studies were conducted:

• A survey of 60 BGAs and IMOs
• A survey of over 400 independent life insurance and health producers
• Eight interviews with senior executives from BGAs and IMOs

The combination of quantitative and qualitative research allowed the trade groups to compare and contrast the perspectives of key stakeholders regarding the current state and future outlook of brokerage distribution.

The report is divided into six sections, covering the following:

1. Organization Profile
2. Producer Network
3. Carrier Relationships
4. Business Operations
5. Future Outlook
6. Shared Comments

Other key findings include:

77% say growing their producer network is top two business priority
67% say increasing product offering is top two business priority
57% expect to grow their producer networks in the next three years by an average of more than 25%
72% say product pricing is the primary reason they place business with a top carrier
87% added a new carrier in the past two years; 57% dropped at least one carrier
69% added a new carrier based on product features offered by that carrier
50% dropped carriers because of their non-competitive product lines
At least 5 in10 BGAs are not satisfied with the level of support provided by carriers
75% agree or strongly agree they need to invest more in IT and technology to be competitive in the future
72% agree or strongly agree M&A of BGAs and IMOs will increase over the next three years
72% agree or strongly agree differentiation among intermediaries is becoming more difficult

This report compiled by InsuranceNewsNet staff.