Product and Fees are Important, but Service is the Differentiator
LIMRA and EY recently did a study that shows more than one third of the time an advisor stops placing business with a carrier the reason is service related. While product features and competitive costs will initially get an advisors attention, ongoing service and support will keep it.
In the last two years, 20 percent of advisors dropped a life or annuity carrier. Poor customer service and advisor support were the top two reasons for carrier attrition.
When looking just at life insurance, 46 percent of advisors cited strong customer service and client experience as why they placed so much business with their top carrier. While advisors typically place business with three to five carriers, they place almost 60 percent of their insurance sales with their top life and annuity carrier, which is why it is critical for providers to stay near the top of advisor rankings.
The LIMRA-EY study shows all types of advisors now offer a wide selection of products and services. To be successful, carriers must effectively align their service models to engage with desired advisor segments. Carriers need to continually reevaluate their business model and their value proposition to remain relevant in the market.
Fortify Distribution Arrangements
Carriers and distribution firms must fortify current distribution arrangements where they are strong and develop new capabilities in areas and channels where they are lacking. LIMRA SRI research suggests a differentiated and dynamic approach aligned to a specific practice model and advisor segment is necessary to remain relevant. Insurers that can help advisors continue the growth trend of the last few years will enhance their own ability to grow.
Carriers must determine if their go-to-market strategies are ready for the future. What worked in the past may no longer be viable as advisors adapt and evolve their practices to reflect market realities. Product design and cost structure will remain critically important but product and service quality for both advisors and consumers are increasingly important differentiators.
Serving the industry since 1916, LIMRA, a worldwide research, consulting and professional development organization, is the trusted source of industry knowledge, helping more than 600 insurance and financial services companies in 64 countries. Visit LIMRA at www.limra.com. @LIMRANewsCenter