0
Distribution DynamicsDistribution Dynamics
Patrick Leary
Assistant Vice President
Distribution Research
Today’s Discussion
• The New Rules of Engagement
• Distribution Alignment
• Face-to-Face Channels
• Direct to Consumer
• E...
Today’s Discussion
• The New Rules of Engagement
• Distribution Alignment
• Face-to-face Channels
• Direct to Consumer
• E...
© LL Global, Inc.SM
4
The New Rules of Engagement
“The balance has
shifted…In the world of
information parity, the
new gui...
© LL Global, Inc.SM
Engaging Our Industry
5
-18%
Blank
+39%
Blank
+23%
blank
+50%
Source: Consumer Internet Use for Insura...
© LL Global, Inc.SM
Engaging Our Industry
6
69%
-18%
Blank
61%
+39%
Blank
33%
+23%
blank
33%
+50%
Source: Consumer Interne...
© LL Global, Inc.SM
Engaging Our Industry
7
69%
37%
Blank
61%
25%
Blank
33%
16%
blank
33%
12%
Source: Consumer Internet Us...
Perspectives
“I am actually pretty
technologically literate, but
I would not have done this
online; I did not know what
I ...
© LL Global, Inc.SM
9
How the
industry is
prepared to
engage
consumers
How
consumers
want to
engage
The Engagement Gap
20t...
© LL Global, Inc.SM
The Coverage Gap
10Source: Drivers of Sales, LIMRA, 2012
1965 1970 1975 1980 1985 1990 1995 2000 2005 ...
© LL Global, Inc.SM
The Coverage Gap
Source: Drivers of Sales, LIMRA, 2012
1965 1970 1975 1980 1985 1990 1995 2000 2005 20...
© LL Global, Inc.SM
Life Insurance Ownership
81%
70%
1984 1998 2004 2010
Individual Group Total
Sources: Household Trends ...
13
18,700,000
PEOPLE ARE STUCK
PEOPLE ARE “STUCK SHOPPERS”
56%
49%
42%
Gen Y
Married
With Kids
“Insurance companies might ...
Today’s Discussion
• The New Rules of Engagement
• Distribution Alignment
• Face-to-Face Channels
• Direct to Consumer
• E...
© LL Global, Inc.SM
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Independent Agents Affiliated Agents Other
U.S. Indi...
© LL Global, Inc.SM
Time is Running Out
16
The outlook is positive for
those organizations willing to
embrace change, but ...
© LL Global, Inc.SM
Sales Capacity:
Number of Sales Professionals
195
158158 149
Direct Sales
Force
Independent
Number (00...
© LL Global, Inc.SM
The Aging of the Client Base
10%
22%
35%
32%
Under 35 yrs 35 – 49 yrs 50 – 64 yrs 65+ yrs
Source: The ...
© LL Global, Inc.SM
The Retirement Wave
• 26 percent of IFPs plan to retire or
sell their practice within 10 years.
• 33 p...
© LL Global, Inc.SM
Time is Running Out
20
Productivity Drivers
Numberofadvisors
Sales Capacity
© LL Global, Inc.SM
Productivity Drivers
21
New
Business
Processing
Training &
Education
Marketing
Technology
Support
Sour...
© LL Global, Inc.SM
Productivity Drivers
22
New
Business
Processing
84%
Training &
Education
67%
Marketing
67%
Technology
...
© LL Global, Inc.SM
Productivity Drivers
23
New
Business
Processing
84%
23%
Training &
Education
67%
36%
Marketing
67%
48%...
© LL Global, Inc.SM
Lifetime Value of a
Financial Professional
Talent
Acquisition
Retention Transition
24
Talent Management
© LL Global, Inc.SM
Today’s Discussion
• The New Rules of Engagement
• Distribution Alignment
• Face-to-Face Channels
• Di...
© LL Global, Inc.SM
Direct-to-Consumer
26
“It would be nice if you
could sit in a park, be on
your tablet, and just get
yo...
© LL Global, Inc.SM
Stuck Online
27
Online
searches
Family,
friends
TweetCoworkers
Company
sites
“It makes me
insane when
...
© LL Global, Inc.SM
Stuck Online:Why?
• Consumers accustomed to going
online for everything else
• Countless insurance web...
© LL Global, Inc.SM
The Price Dilemma
29
Complexity
CostofCoverage
Tradeoff to Achieve Efficiency & Scale
Predictive analy...
Contact Centers Take
Center Stage
30
Service Relationship Management
The New Frontier
31
“The days of hiring empty nesters,
retired life agents, and those in their
second career are over. Thi...
Today’s Discussion
• The New Rules of Engagement
• Distribution Alignment
• Face-to-Face Channels
• Direct to Consumer
• E...
© LL Global, Inc.SM
Today’s Consumer Is…
33
EMPOWERED OMNI-CHANNEL EXPECTING MORE
© LL Global, Inc.SM
Will the face-to-face of the future be
the same?
© LL Global, Inc.SM
Same Business, New Tools
35
Sources: Connecting Through Social Media, LIMRA, 2012; Technology Leaders ...
© LL Global, Inc.SM
Why Do Some Lead and
Others Follow?
• Tech leaders…
• See the value of technology in their business
• ...
© LL Global, Inc.SM
Client
An Integrated Service Model
37
Advisor
/ Rep.
Sales Desk
Collaboration
Team
Website & Mobile
Co...
© LL Global, Inc.SM
In An Omni-Channel World
38
Where They Want
How They Want
When They Want
Communication
Strategy
“Insur...
Intent vs. Perception
39Source: Get Real Already: Industry Innovation Through Authentic Language. LIMRA & Maddock Douglas,...
© LL Global, Inc.SM
The Six Elements of
Authenticity
1. Easy to Understand
2. Down to Earth
3. Memorable
4. Positive
5. Cr...
© LL Global, Inc.SM
Authenticity “First Impression”
Scoreboard
41
NEUTRAL
Confusing
Easy to
Understand
Impractical Down to...
© LL Global, Inc.SM
1. Easy to Understand
“Easy to understand” means simple, everyday language.
42
“If they use every day ...
© LL Global, Inc.SM
2. Down to Earth
“Down to earth” means real, human and approachable images.
43
“People just
look too d...
© LL Global, Inc.SM
3. Memorable
“Memorable” means interesting and refreshing.
44
“Somewhere in a sea of
tasteless mediocr...
© LL Global, Inc.SM
4. Positive
“Positive” means warm and comforting.
45
“Maybe a little less harsh…it
sounds so dismal…ma...
© LL Global, Inc.SM
5. Credible
46
“I wish they wouldn’t slide
things in under the radar.”
“Too much verbiage. Makes
me th...
© LL Global, Inc.SM
6. Relevant
“Relevant” means you understand or know me and your
message is for someone like me.
“It di...
They Believe We Can Do Better
48
• believe life insurance products don’t
have to sound so complicated72%
• say there’s no ...
To Sum Up….
• The New Rules of Engagement
• Distribution Alignment
• Face-to-Face Channels
• Direct to Consumer
• Engaging...
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Transcript of "8 13-pat leary-430pm"

  1. 1. Distribution DynamicsDistribution Dynamics Patrick Leary Assistant Vice President Distribution Research
  2. 2. Today’s Discussion • The New Rules of Engagement • Distribution Alignment • Face-to-Face Channels • Direct to Consumer • Engaging Today’s Consumers 2
  3. 3. Today’s Discussion • The New Rules of Engagement • Distribution Alignment • Face-to-face Channels • Direct to Consumer • Engaging Today’s Consumers 3
  4. 4. © LL Global, Inc.SM 4 The New Rules of Engagement “The balance has shifted…In the world of information parity, the new guiding principle is caveat venditor— seller beware.” To Sell is Human Daniel H. Pink
  5. 5. © LL Global, Inc.SM Engaging Our Industry 5 -18% Blank +39% Blank +23% blank +50% Source: Consumer Internet Use for Insurance, LIMRA, 2012
  6. 6. © LL Global, Inc.SM Engaging Our Industry 6 69% -18% Blank 61% +39% Blank 33% +23% blank 33% +50% Source: Consumer Internet Use for Insurance, LIMRA, 2012
  7. 7. © LL Global, Inc.SM Engaging Our Industry 7 69% 37% Blank 61% 25% Blank 33% 16% blank 33% 12% Source: Consumer Internet Use for Insurance, LIMRA, 2012
  8. 8. Perspectives “I am actually pretty technologically literate, but I would not have done this online; I did not know what I wanted and I wanted someone to explain all the options to me.” “I’d like a hybrid. I want to start the process based off of information I just learned about online…then I want to talk to someone in person.” “Online, absolutely. You have kids…you are at a baseball game…who has time to set up for two hours in the evening to sit with an agent?” 8 Source: Consumer Internet Use for Insurance, LIMRA, 2012
  9. 9. © LL Global, Inc.SM 9 How the industry is prepared to engage consumers How consumers want to engage The Engagement Gap 20th Century Today
  10. 10. © LL Global, Inc.SM The Coverage Gap 10Source: Drivers of Sales, LIMRA, 2012 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 Life Policies (000) Age 25 - 34
  11. 11. © LL Global, Inc.SM The Coverage Gap Source: Drivers of Sales, LIMRA, 2012 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 Life Policies Age 25 - 34 11
  12. 12. © LL Global, Inc.SM Life Insurance Ownership 81% 70% 1984 1998 2004 2010 Individual Group Total Sources: Household Trends in US Life Insurance Ownership, LIMRA, 2011 12
  13. 13. 13 18,700,000 PEOPLE ARE STUCK PEOPLE ARE “STUCK SHOPPERS” 56% 49% 42% Gen Y Married With Kids “Insurance companies might as well be speaking in a foreign language...and they talk about life insurance in a way that makes it seem unattainable.”
  14. 14. Today’s Discussion • The New Rules of Engagement • Distribution Alignment • Face-to-Face Channels • Direct to Consumer • Engaging Today’s Consumers 14
  15. 15. © LL Global, Inc.SM 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Independent Agents Affiliated Agents Other U.S. Individual Life Insurance Annualized Premium Sales Source: LIMRA’s U.S. Individual Life Insurance Sales Survey and LIMRA estimates Affiliated includes Agency-Building, MLEA and Home Service; Independent includes Brokerage, PPGA and Stockbroker/Wirehouse; Other includes Financial Institutions, Worksite and channels other than those included in the previous categories. 49% 41% 10%
  16. 16. © LL Global, Inc.SM Time is Running Out 16 The outlook is positive for those organizations willing to embrace change, but time is running out to address some critical industry issues. Productivity Drivers Numberofadvisors Sales Capacity
  17. 17. © LL Global, Inc.SM Sales Capacity: Number of Sales Professionals 195 158158 149 Direct Sales Force Independent Number (000) 1998 2010 Source: Census of U.S. Sales Personnel, LIMRA, 2012 17 26% 6% 45% 34% 29% 60% Career Independent Age Less than 35 35 to 54 55 or older
  18. 18. © LL Global, Inc.SM The Aging of the Client Base 10% 22% 35% 32% Under 35 yrs 35 – 49 yrs 50 – 64 yrs 65+ yrs Source: The Independent Financial Professional, Fitting Into an Ever-Changing Environment, LIMRA and National Underwriter, 2014
  19. 19. © LL Global, Inc.SM The Retirement Wave • 26 percent of IFPs plan to retire or sell their practice within 10 years. • 33 percent don’t plan to ever retire or sell their practice. • Of FPs age 70 and older, planning to retire within the next 10 years, only 17 percent have a formal, written succession plan. Source: The Independent Financial Professional, Fitting Into an Ever-Changing Environment, LIMRA and National Underwriter, 2014
  20. 20. © LL Global, Inc.SM Time is Running Out 20 Productivity Drivers Numberofadvisors Sales Capacity
  21. 21. © LL Global, Inc.SM Productivity Drivers 21 New Business Processing Training & Education Marketing Technology Support Source: The Independent Financial Professional, Fitting Into an Ever-Changing Environment, LIMRA and National Underwriter, 2014
  22. 22. © LL Global, Inc.SM Productivity Drivers 22 New Business Processing 84% Training & Education 67% Marketing 67% Technology Support 63% Source: The Independent Financial Professional, Fitting Into an Ever-Changing Environment, LIMRA and National Underwriter, 2014
  23. 23. © LL Global, Inc.SM Productivity Drivers 23 New Business Processing 84% 23% Training & Education 67% 36% Marketing 67% 48% Technology Support 63% 39% Source: The Independent Financial Professional, Fitting Into an Ever-Changing Environment, LIMRA and National Underwriter, 2014
  24. 24. © LL Global, Inc.SM Lifetime Value of a Financial Professional Talent Acquisition Retention Transition 24 Talent Management
  25. 25. © LL Global, Inc.SM Today’s Discussion • The New Rules of Engagement • Distribution Alignment • Face-to-Face Channels • Direct to Consumer • Engaging Today’s Consumers 25
  26. 26. © LL Global, Inc.SM Direct-to-Consumer 26 “It would be nice if you could sit in a park, be on your tablet, and just get your life insurance….” Seeking the Ideal Experience: How Gen X and Y Want to Buy Life Insurance LIMRA, 2014
  27. 27. © LL Global, Inc.SM Stuck Online 27 Online searches Family, friends TweetCoworkers Company sites “It makes me insane when I can’t find the contact information.”
  28. 28. © LL Global, Inc.SM Stuck Online:Why? • Consumers accustomed to going online for everything else • Countless insurance web sites • Few places to transact online • Life insurance is a complex product • Confusing terminology 28
  29. 29. © LL Global, Inc.SM The Price Dilemma 29 Complexity CostofCoverage Tradeoff to Achieve Efficiency & Scale Predictive analytics Straight through processing
  30. 30. Contact Centers Take Center Stage 30 Service Relationship Management
  31. 31. The New Frontier 31 “The days of hiring empty nesters, retired life agents, and those in their second career are over. This is the new frontier of the life insurance industry – competitive, talented, confident, knowledgeable, alert and driven individuals are required to maximize the investment and generate returns.” Contact Center Director Source: LIMRA Contact Center Market Study, LIMRA, 2014
  32. 32. Today’s Discussion • The New Rules of Engagement • Distribution Alignment • Face-to-Face Channels • Direct to Consumer • Engaging Today’s Consumers 32
  33. 33. © LL Global, Inc.SM Today’s Consumer Is… 33 EMPOWERED OMNI-CHANNEL EXPECTING MORE
  34. 34. © LL Global, Inc.SM Will the face-to-face of the future be the same?
  35. 35. © LL Global, Inc.SM Same Business, New Tools 35 Sources: Connecting Through Social Media, LIMRA, 2012; Technology Leaders Study, LIMRA, 2013 I use LinkedIn to broaden my network. Using social media builds credibility. Social media is a retention tool. Social media is just the car you drive. 43% 40% 35% 31% 31% 24% 17% 15% 9% Marketing/ Advertising Prospecting Communication Brand management Networking/ Education Events/ Community Customer service Sales Recruiting Uses of Social Media
  36. 36. © LL Global, Inc.SM Why Do Some Lead and Others Follow? • Tech leaders… • See the value of technology in their business • Have a better vision for how technology fits into the traditional sales model • Actively strive to reduce barriers 36 Technology helps me stay on top of my business. The bigger your book, the harder that is … I want every client to feel as if they are my only client, and technology helps me accomplish this. — Financial professional, interview
  37. 37. © LL Global, Inc.SM Client An Integrated Service Model 37 Advisor / Rep. Sales Desk Collaboration Team Website & Mobile Contact Center Local Office Web & Mobile Portal Sales Leadership & Practice Management
  38. 38. © LL Global, Inc.SM In An Omni-Channel World 38 Where They Want How They Want When They Want Communication Strategy “Insurance companies might as well be speaking in a foreign language...and they talk about life insurance in a way that makes it seem unattainable.”
  39. 39. Intent vs. Perception 39Source: Get Real Already: Industry Innovation Through Authentic Language. LIMRA & Maddock Douglas, 2014 What We Say Premium Protection Universal life Death benefit Elite; expensive Birth control Coverage good anywhere! “I just can’t think of any benefit to death” What They Think
  40. 40. © LL Global, Inc.SM The Six Elements of Authenticity 1. Easy to Understand 2. Down to Earth 3. Memorable 4. Positive 5. Credible 6. Relevant 40 Source: Get Real Already: Industry Innovation Through Authentic Language. LIMRA & Maddock Douglas, 2014
  41. 41. © LL Global, Inc.SM Authenticity “First Impression” Scoreboard 41 NEUTRAL Confusing Easy to Understand Impractical Down to Earth Forgettable Memorable Negative Positive Unreliable Credible Irrelevant Relevant Retirement Life Insurance Source: Get Real Already: Industry Innovation Through Authentic Language. LIMRA & Maddock Douglas, 2014
  42. 42. © LL Global, Inc.SM 1. Easy to Understand “Easy to understand” means simple, everyday language. 42 “If they use every day kind of language and stay away from buzz words that define their business, it might be easier to understand.” “They send me brochures and I have no idea what it means…I don’t understand a word of it.” “The confusion is indescribable — It makes me want to stop reading.” “Put it in a way normal people can understand.” Source: Get Real Already: Industry Innovation Through Authentic Language. LIMRA & Maddock Douglas, 2014
  43. 43. © LL Global, Inc.SM 2. Down to Earth “Down to earth” means real, human and approachable images. 43 “People just look too damn happy and healthy.” “…they promise we can have this lifestyle once we retire and I don’t think that’s realistic.” Source: Get Real Already: Industry Innovation Through Authentic Language. LIMRA & Maddock Douglas, 2014
  44. 44. © LL Global, Inc.SM 3. Memorable “Memorable” means interesting and refreshing. 44 “Somewhere in a sea of tasteless mediocrity lies a ripened gem just for me. I just need to find it.” “When you started reading deep into it, it got a little like ‘what are they talking about?’…when you got into stuff it just kind of bored you.” Source: Get Real Already: Industry Innovation Through Authentic Language. LIMRA & Maddock Douglas, 2014
  45. 45. © LL Global, Inc.SM 4. Positive “Positive” means warm and comforting. 45 “Maybe a little less harsh…it sounds so dismal…maybe a little humor in it, make it easier to digest.” “Offer a little bit of sunshine with it — it doesn’t have to be a scary thing.” “We’re talking about something ending, we already know how bad that is. Maybe not use such heavy words with it.” Source: Get Real Already: Industry Innovation Through Authentic Language. LIMRA & Maddock Douglas, 2014
  46. 46. © LL Global, Inc.SM 5. Credible 46 “I wish they wouldn’t slide things in under the radar.” “Too much verbiage. Makes me think they’re trying to hide something from the public.” “I need to talk to someone who knows insurance inside and out.” “Credible” means trustworthy and unbiased. Source: Get Real Already: Industry Innovation Through Authentic Language. LIMRA & Maddock Douglas, 2014
  47. 47. © LL Global, Inc.SM 6. Relevant “Relevant” means you understand or know me and your message is for someone like me. “It didn’t seem like it was identifying me personally…I didn’t think they were talking to me. Did they do that on purpose?” “It’s not clear for me what my best option is…so I didn’t choose anything.” Source: Get Real Already: Industry Innovation Through Authentic Language. LIMRA & Maddock Douglas, 2014
  48. 48. They Believe We Can Do Better 48 • believe life insurance products don’t have to sound so complicated72% • say there’s no reason why a life insurance company can’t offer the same high quality customer experience as other types of companies 80% Source: Get Real Already: Industry Innovation Through Authentic Language. LIMRA & Maddock Douglas, 2014
  49. 49. To Sum Up…. • The New Rules of Engagement • Distribution Alignment • Face-to-Face Channels • Direct to Consumer • Engaging Today’s Consumers 49
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