Heard in the Hallways: NAILBA, Day 3

<p> Question: What is the top threat to the independent life brokerage distribution in the next year or two and why?

“The biggest threat I see is lack of relevance — in the life products, the approach to consumers and to distribution. Independent producers are finding it is harder and harder to sell life insurance. They think that people don’t want it. But I think we’re not presenting life insurance in the way that consumers want and in the way that they want to do business. We need to simplify everything. We need to educate our producers on getting back to basics, so that we are selling people what they need. That means less focus on commoditization. We need to add value for the consumer back into the sales process.”

–Sarah E. Stewart, vice president-life marketing and COO, Financial Brokerage, Omaha, Neb.

“The biggest threat I see is getting more producers into the independent agency system. The career agency system, which was our source of new talent for many years, has been shrinking. It is continuing to shrink, too. I see a lot of local career offices closing down or combining into one office with fewer agents overall. The career carriers do try to replace them, but it doesn’t happen very fast, so their sales are losing momentum. Often, it’s a big revolving door with the producer joining after leaving college, getting trained and then leaving 30 to 90 days later. Many leave the industry completely. This impacts brokerage because there are fewer career agents out there for brokerage firms to bring on. What we are doing is trying to get producers and agents who are looking for guidance. We are seeking people who are already licensed, such as property and casualty producers who want to expand. Another example would be money managers; often they don’t understand insurance but we teach them to use insurance to protect client assets under management — not to replace those assets. It’s challenging, and we're having growing pains, but these recruits are out there. Once we get one, we ask for referrals to others who might be interested. Referrals are always the best source.”

—Raul Blanco, vice president-marketing, Diversified Underwriters Services, Inc. Miami, Fla.

“We are so busy at our office that I’m not seeing any threats. Starting in 2007, we repositioned our firm as a boutique brokerage general agency that is all about the education and training of the producer. It’s not the traditional focus on product and compensation. To do this, we beefed up our technology, and we decided to recruit outside the box — that is, outside of the traditional approach. We developed a sales strategy that focuses on education and support. We offer things as website support, a co-authored book, workshops, a direct mail system, branding material for advisors, information on how to negotiate advertising rates and 56 instructional videos on how clients can pay for long-term-care with an asset-based system. Since June, we’ve added 63 new agents to our training pipeline. They come from other professions, not insurance, and they have their own clients. We’ve had three training sessions with them since the summer, and some are now licensed and on board. One has already earned $70,000. So that’s why I don’t see threats.  You either adapt in this business or you will be left behind.”

—Julie Stratton, vice president, America’s 1^st Financial, St. Peters, Mo.

Linda Koco, MBA, is a contributing editor to InsuranceNewsNet, specializing in life insurance, annuities and income planning. Linda can be reached at [email protected].