Life insurers in the US still rely heavily on
intermediaries, tied and independent, to distribute their products.
Deloitte’s Rick Berry provides Charles Davis insight into what
producers expect from insurers and the areas where he believes
delivery is falling short of expectations.
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Insurance producers remain the most vital cog in the US
life distribution channel, but many are not getting the resources
and support needed to maximise their businesses, according to a new
study by professional services firm Deloitte Consulting.
To gain insights into what carriers
can do to better meet the needs and preferences of producers,
Deloitte’s
Voice of the Producer: Life and Annuity Producer
Survey talked to almost 650 US-based life and
annuity producers on a variety of issues.
These issues included the outlook
for their business, their level of satisfaction with the support
they receive from carriers, and the factors that drive their
selection of a carrier when placing new business.
Deloitte director Rick Berry, one
of the authors of the study, tells LII that sales support,
speed of underwriting and policy issue, and carrier brand are the
top factors influencing a producer’s decision to place business
with a specific carrier.
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By GlobalData“On issues they believe are most
important to sales, 40% of producers aren’t satisfied with the
support they currently receive,” Berry says.
“To be in the game with an agent,
your products need to be competitive, your compensation needs to be
competitive, and then you can begin to differentiate between your
level of support.
“Through the research, we see
meaningful differences between producers – the agent who cares
about speed of underwriting is a different agent than the one who
cares most about lead production.”
Favoured
carriers
With more than 80% of their total
compensation coming from two favoured carriers, there is room for
improved producer loyalty and sales through better support, Berry
says.
The survey details several
opportunities for carriers to create new relationships with
producers 
since
many are seeking stronger support or are looking to add or drop
carriers.
Roughly two-thirds of producers
surveyed expect to change carriers within the next 12 months.
Twenty-nine percent plan to add
carriers and one-third expect to both add and drop carriers. As a
result, carriers must develop strategies to attract producers
seeking new carriers while retaining current ones, Berry says.
“If they want to retain current
producers and attract new ones, carriers should develop a strategy
that targets them according to their sales priorities and growth
potential while offering practical solutions aligned with their
market approach and client base,” Berry adds.
Four personas
From its study Deloitte identified
four common producer personas – Speed Merchants, Consummate
Sellers, Volume Sellers and Brand Aficionados.
Getting to know which type of
persona carriers are dealing with is one way that companies can
better segment the agent market to deliver competitive support
aligned with producer priorities.
The personas – based upon account
producer demographics, practice characteristics, career stage,
attitudes, intermediary relationships and business attributes –
differ in every respect, and can be seen as one way to slice a
diverse market.
“Historically, insurers have looked
at and managed their agents with particular emphasis on
relationship building and management,” Berry explains.
“This is still really important,
but that emotional relationship needs to be complemented by a more
disciplined approach to understanding agent differences and how to
approach them with what they need, from their point of view, from
where they are in their career.”
Speed Merchants, not surprisingly,
rate speed of underwriting and policy issue as a top placement
factor and value a carrier’s ability to issue a policy quickly as a
selling point with clients.
Speed Merchants base their business
on producing large numbers of policies with smaller premiums and
therefore value an easy process for new business and rapid
turnaround in policy issuance.
Consummate Sellers place a premium
on carriers that offer strong sales support in proposals, advanced
underwriting, and assisted wholesaling.
Consummate Sellers tend to have
more complex sales processes because they sell primarily investment
products to older, more affluent clients.
Carriers targeting Consummate
Sellers should consider upgrading call centres with better
technology, increased staffing, and expanded hours of operation to
enhance producer support, the study said.
Volume Sellers are relatively new
to the insurance business and are focused on building their book,
and so they have a keen interest in teaming with carriers that can
send them high quality leads.
Carriers targeting this producer
segment should invest in predictive analytics and data mining
applied to demographic and financial data.
Brand Aficionados, finally, are
producers who place high importance on the brand when choosing a
carrier. They demand significant investment in marketing and
advertising to increase the likelihood that their brand messages
are widely and effectively communicated to consumers.
When designing incentives for Brand
Aficionados, carriers may consider rewarding producers for driving
potential customers to marketing and sales events held by the
carrier, which will help sustain brand awareness.
Focus is vital
Berry says the need for focus on
the producer has never been more urgent, given changes in the US
insurance market.
“History says that, in the US, this
is a slow-growth, stable industry, in terms of premium, but in the
last 20 years, the shift in business coming from independents has
really grown,” Berry says.
“So, the competition for producer
attention is stepping up, and you must tailor support to what is
really valuable to the individual producer.”
Success ultimately depends less on
simply having contracts and far more on becoming one of the
favoured carriers that receive the bulk of a producer’s new
business.
In the survey, 60% of producers
said they have appointments/contracts with six or more carriers but
said they place 61% of new business with their top carrier and 21%
with their second carrier.
Carriers not in the number one or
two spots tend to receive little or no production.
“It begs the question, at what
point is a producer ‘your’ producer, especially when they are
individual agents being targeted by wholesale intermediaries,”
Berry says.
“If they have just signed a contract but never brought you a
policy, then there is real potential there.”
