Independent Distributors Emerging as the Workhorses for Life Insurance, Captives Losing Ground and Internet Has Not Lived Up to Its Promise, Says Conning & Company Study

Insurers Looking To Banks and Other Financial Services Firms To Distribute Their Products;
Internet Relegated To Support Role For A Product That Is Sold Face To Face

2001– Captive insurance agents, long the key distribution channel for the vast majority
of traditional life insurance policies, now account for less than half the premiums paid.
But the big winner in the distribution sweepstakes has not been the Internet. It has been
independent producers, and their control over life distribution looks like it will
continue to grow enormously in the foreseeable future. This is the finding of a new
Conning & Company strategic study on the distribution of life insurance.

The Conning study, “Life Distribution
Goes Independent: Succeeding in the Post-GLBA Environment,” reports that not only have
the independents captured the lion’s share of sales in the life insurance world, insurers
now are scrambling to distribute their products through agreements with entities that only
a few years ago were viewed as competitors: banks. “If you had told me a decade ago
that traditional life insurers would be wooing the wire houses and banks as principal
distribution channels, I would have said you’re crazy,” said George McKeon, Assistant
Vice President at Conning and author of the study. “In spite of the millions of
dollars spent on developing the internet as a distribution channel, actual sales have been
elusive, largely because the age-old wisdom that life insurance is sold not bought
continues to be proven true. The big change has been that consumers want an advisor who
isn’t tied to one carrier. They want an advisor who can understand their issues and can
select from a variety of solutions. You might say that in life insurance, manufacturing is
finally listening to sales, rather than the other way around.” The Conning study examines
the distribution of life insurance in an era in which the Depression-inspired barriers
between banks, brokerages and insurers have largely fallen away (at least in part because
of the Gramm-Leach-Bliley Act).

The Conning Study, “Life Distribution
Goes Independent: Succeeding in the Post-GLBA Environment” is available from Conning
& Company for $575 by calling toll free (888) 707-1177 or (860) 520-1521. A complete
listing of all Conning Strategic Studies can also be found by visiting the company’s Web
site at