2013 LIMRA Life Insurance Conference: A New Orleans education
By Paul Wilson
I learned a lot last week at LIMRA's 2013 Life Insurance Conference in New Orleans. For one thing, a co-worker was kind enough to show me some of the finer points of eating raw oysters. I also quickly came to realize that stepping around any corner in the Big Easy is like entering a new country (or sometimes a new world). The city teems with secluded courtyard coffee shops, open air jazz fests and some of the best bookstores in the country. Oh, and there's also this place called Bourbon Street…
But not surprisingly, the majority of new knowledge came directly from the conference host. As always, LIMRA brought a huge amount of fascinating and cutting edge information to the table.
Here's just a few of the highlights from the week (keep an eye out for video interviews soon.)
Technology continues to play an increasingly important role in advisors' practices, according to Patrick Leary, assistant vice president of LIMRA distribution research. Social media, Skype and other tools provide advisors with an amplified voice and are simply assumed to be part of the process by younger advisors and consumers. Although technology will not replace face-to-face conversations, it must supplement it, Leary said.
And there's no denying the technological sea change currently occurring among insurance professionals. Advisor use of Skype and video technology is expected to quadruple in the next three years, while social media usage will more than double, according to LIMRA research.
Technology is also becoming more important for carriers looking to recruit younger advisors. One key area of focus is app and software development for smartphones and tablets which can be used to present and gather information, provide quotes and offer e-signature capabilities. Aging workforce
Attracting younger agents is also become more important every day. In fact, Leary warned that the industry's aging workforce issue is quickly "reaching crisis level." According to LIMRA:
- 69 percent of independent agents are now aged 50+
- 65 percent of IRAs are 50+
- 46 percent of wirehouse reps are 50+
So, how does the industry attract new agents? While money remains important to young advisors, other factors also play a huge role in recruiting upcoming generations. As detailed in LIMRA's "Up Close and Personal" study, "Potential recruits are more open minded about careers they might otherwise have avoided, particularly when it comes to selling insurance. The stigma remains, but is less. Still, whatever financial products they end up selling, they hope to have a job that provides them with four key ingredients:
- Connections — Mentors are welcome. They flourish in team environments.
- Influence — Gen Nexters need to know that what they are doing will have a positive influence on those around them.
- Stability — Many are risk averse in today’s stagnant economic environment, so the idea of living off commissions is scary. Many say that making a lot of money is not a priority; getting a dependable job is.
- Variety — Gen Nexters need to be challenged in many ways. They need flexibility and opportunities for learning and professional growth. They want to have fun while they’re working.
Service delivery models
Robert Baranoff, Senior Vice President and director of LIMRA's reserach, noted that in addition to the issues of aging and recruitment, the industry also faces a serious sale capacity issue. One way to approach this problem is by reevaluating service delivery models. LIMRA has found that advisor are looking for better support in a number of areas, including point-of sale; technology management; development and coaching; remote sales support; marketing service; and new business processing.
Today's consumer is "more elusive and time-starved" than ever before, according to Sean O'Donnell, AVP and director of client services at LIMRA. In a rapidly changing retail environment, the way consumers purchase products and expect to shop is adapting quickly.
Peter F. Ricchiuti, Tulane University, speaking at the conference
The life insurance industry must catch up with other financial services sectors such as banking, investment and P&C when it comes to multichannel distribution.
"Customer service is today's marketing," O'Donnel said. Areas the industry must improve on include social media, auto-lead forms, and more interactive/integrated websites, he added.
To remain relevant and effective, the industry must embrace these changes rather than fearing them. "We need to understand the consumer. Fifty percent of Americans say know they need life insurance, but ownership is at a 50-year low and distribution is flat," said Patrick Leary.
Roy Freiman, Vice President of Life Product Sales at Prudential summed up the issue well during the final session: "How is it possible we have a growing life insurance gap? Do we believe it provides value to society? Why are we failing? How do we become more relevant? We're the problem and the solution."
It was a whirlwind week filled with information, questions, sound bites and, yes, beignets. Clearly, the industry is in transition and possibly even crisis on many levels, and insurance professionals must continue to remain informed and up-to-date if they want to stay relevant and provide the answers to questions that so many Americans are asking. There's no longer any excuses. The tools and information are out there; it's only a matter of being proactive and doing what needs to be done.