Report Is Latest in Ongoing Series of Research
Focused on Insurance Distribution Issues
NEEDHAM, MA, March 9, 2004 � With the number of career life insurance agents on the decline, new research from TowerGroup urges insurers to explore nontraditional distribution outlets as a means to mitigate potential future losses. These channels include banks and wirehouses, where life insurance premium sales have traditionally been elusive.
�It�s imperative that insurers approach this market with a fresh perspective relative to products, distribution and operations,� said Cindy Saccocia, senior analyst in the Insurance practice at TowerGroup and author of the research. �The distribution of life insurance through nontraditional channels is an area of growth for those insurers willing to invest in long-term opportunities.�
Highlights of the research include:
Life insurance distribution remains concentrated with independent and �captive� agents, which means insurers with strong market share in these two areas will continue to drive life sales in the near term. However, with the number of career agents on the decline, insurers must begin to penetrate other distribution channels and reach new advisors to increase sales.
To promote sales through other channels and grow this area of the business, insurers must concentrate on education, wholesaling and sales support � as well as address the increased operational complexities that accompany each new distributor added to their networks.
TowerGroup estimates that 50-75% of financial planners and independent agents associated with insurance do business with multiple carriers. The ease of �defection� among agents and advisors underscores the need for insurers to advance their operations and offer a compelling range of services. The strategic use of technology to strengthen these distributor relationships can provide a significant competitive weapon.
Just as insurers must reach out through nontraditional channels, financial institutions looking to expand their product suite to meet customer demands for asset protection and retirement income should consider forging partnerships with insurers to offer insurance products such as life, income annuities and traditional property insurance.
�Current US demographics portend pent-up demand for insurance products,� Saccocia added. �An investment today by carriers in technology to streamline and further automate operations will pay hefty dividends in terms of competitive differentiation.�
TowerGroup’s report, “Life Insurance Distribution: Turn Up the Volume, Turn Down the Costs,” is available. Additional research recently published by TowerGroup on the insurance distribution topic include �Improving Distribution Profit Margins with Modern Technology,� �Life Insurance Distribution: Differentiate with Partner Relationship Management Tools,� and �Advice Delivery Models: Where High Tech Meets High Touch.�
Those interested in purchasing a copy of any of these reports may contact TowerGroup at +1.781.292.5200 or email@example.com.
About TowerGroup: TowerGroup is the leading research and consulting firm focused on the global financial services industry. A respected source for trusted information and advice, TowerGroup brings many of the world�s largest financial services, technology and professional services firms a deeper understanding of the business and technology issues impacting their organizations. Headquartered near Boston in Needham, Massachusetts, and with offices in New York, London, and Kuala Lumpur, TowerGroup serves a global client base. Visit TowerGroup online at www.towergroup.com.