‘Bullish’ On The Future Of Independent Distribution

Luke Kaplan is "bullish" on the 10-year outlook for independent distribution in the life and annuity space. But there are hurdles that need to be cleared.

Kaplan was part of a panel discussion Thursday on succession planning, mergers and acquisitions during the virtual annual conference of the National Association of Independent Life Brokerage Agencies.

Three hurdles, in particular, said Kaplan, president of life and annuity brokerage for Gallagher:

• Succession planning. The industry is great at doing succession plans for others, but very poor at doing their own planning, Kaplan said. That planning is related to the need to identify the next generation of talent to lead independent distribution, he added.

“What are we going to do to play our role in the war for talent?” Kaplan asked. “I think there’s a real talent void. We all talk about bringing the future into the business. But I don't think as an industry on a macro level we’ve done a very good job.”

• Technology. A bigger commitment to technology is needed to maintain profitable balance sheets and to meet prospects and clients in a manner they are used to, Kaplan said.

• New business opportunity. Alternative forms of distribution are key to survival and staying ahead of the curve, Kaplan said.

‘A Continued Avenue’

The COVID-19 pandemic has ratcheted up use of technology in everything from meeting prospects to skipping medical exams to doing e-signatures. It’s unleashed the technology genie from the bottle, panelists agreed.

“Technology is going to be a continued avenue where the expectations of both our carrier partners and our agent partners are going to increase and ultimately that brings a benefit to the consumer,” said Bruce Donaldson, chief executive officer or Simplicity Group Holdings.

Panelists agreed that consolidation through mergers and acquisitions will pick up as carriers and others along the distribution chain seek efficiencies through scale. The life and annuity business is likely to follow the path of the property/casualty industry in terms of M&A activity, said Scott Perry, chairman and CEO of AmeriLife Group.

Kaplan agreed.

“All of us on the this panel who we're active in acquiring agencies agree that we're doubling down,” Kaplan said, “and we'll continue to do so as long as it’s proven to be a good investment. And there's a lot of demand for it.”

The nation's largest independent distributor of life and health insurance products, Integrity Marketing Group has been in an acquisition mode for some time. Integrity is home to more than 1,700 employees, who work with over 275,000 independent agents who service more than six million clients annually. In 2020, Integrity has said it expects to place $3 billion in new premium.

“At Integrity, we don't run companies,” said Bryan W. Adams, co-founder and CEO of the company. “We partner with great people. We give them additional resources and we try to provide them with additional support and services, so that they can grow faster. So we look for underlying organic growth.”

He echoed the predictions of the panel on the powerful influence independent distribution will continue to wield in the industry.

"I really believe that the independent model that we reflect here, and we're part of, is the most efficient and effective model to bring the important life and health insurance and annuity products to Americans," Adams said. "And we're incredibly excited about the future."

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.

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InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.