Heard in the Halls: BLOG
February 27, 2015 by Linda Koco, linda.koco@innfeedback.com
[Linda Koco Interviews LIMRA Conference Attendees]
Question: Will the independent agency system grow, stay where it is now, or decline in life and annuity production over the next five years?
I think it will grow, but it will look different. The independent agent of yesterday came from the career companies. Some of that is still happening, but others are coming from other sources, such as property/casualty agencies, accounting firms and registered reps expanding into insurance. There are also some who are coming into the independent system as a result of a complete career change, though not from any particular industry. The career-changers tend to have a sales background and they’ve decided to take a turn at insurance. The ones who are successful will be those with a pool of prospects to talk to from a previous relationship. I am seeing brokerage agencies like ours going to these people and saying, ‘Come into insurance and we’ll help you.’ These other sources don’t come to us. We have to go to them. We have to find the new people and help them to sell insurance.”
— Christi Daughenbaugh, president and COO, Borden Hamman Insurance Marketing, Dallas
I think the independent agents will decline. My reason is, it is an aging field force, and lot of younger people are not looking to come into insurance or, if they do, they go into the financial side, not to the insurance side. The younger people are not thinking about protection vehicles; they are thinking more about investment vehicles. My company is an exclusive agency insurance company. We are looking toward developing alternative distribution models, but not independent agents.”
— Nate Korhonen, sales external manager-life company, American Family Insurance, Madison, Wis.
I think the opportunity is there. We’re not doing this now, but we are looking into using independent advisors to expand into remote areas where we are less accessible. Right now, we have a captive agency force, but we are expanding with a call center, which is not yet fully operational. In addition, we are building an online presence. We expect we won’t be moving into distribution through independent agents for two years at the earliest. That’s when initial testing will begin. The primary reason we are interested is from a cost standpoint; we think it would cost us less to use independent distribution to reach those remote areas as compared to establishing captive distribution there. Another reason is, we want the increased exposure to the market that independent agents could give us. We plan to test it first because we want to experience it to see if we need to rule it out or not.”
— Steve Halajian, senior director and COO, Ontario Medical Association Insurance Agency, Toronto
