The life insurance agency distribution model
on the cusp of significant change.
There's a lot of reasons for this,
none more important than the fact
that we're dealing with global-economic headwinds,
low-interest rates,
disinterested consumers, low-growth rates overall.
What we are really excited about when it comes
to thinking about transforming agency distribution globally
is the fact that operating margins could actually
be enhanced by 75% our research suggests,
and today the average insurance company
in the life space deals with about
a 6.5% operating margin.
We think that they could get
to about an 11.5% operating margin.
As we think about the economics of our industry,
there's actually a fair amount of compensation
that's paid to agents by customers
for them to sell them life insurance,
and so we think there's a lot of opportunity
to transform the way that life insurance is sold
to customers, as well as change the economics,
the underlying economics of the overall value chain,
to actually allow various stakeholders
including investors and carriers, carriers,
agents, as well as customers, to actually realize
a much more valuable and efficient and effective way
of interacting with the industry.
The agency model of the future is gonna be different
in several ways.
First of all, we don't believe the agent that we have today,
the human-to-human interaction
of an agent is going to change.
The question becomes, how do we think about making
that agent much more productive,
and surrounding the agent with a set of tools
that enable that productivity.
And in the world today I believe China is
the most advanced marketplace when we think about
sort of a digitally enabled, face-to-face agency model.
In that marketplace the agent is
the celebrity in the system.
They're fully enabled with a digital experience,
not only from a prospecting perspective,
but from a recruiting perspective,
that is agent-recruiting perspective
to a training perspective,
and then when you think about interacting with customers
from a lead management and lead-scoring perspective,
and then the online-submission capabilities,
as well as service capabilities, are second to none.
In China they're using AI in a number
of different parts of the value chain,
and so let's talk about agent recruitment for a second,
and you know agent recruitment and artificial intelligence,
as well as analytics there,
I think what the Chinese insurers have been able to perfect
is looking at their productive agents of today,
finding out what attributes those agents actually have
and then use that not only in the recruiting process,
but also in the training and development process
for new agents so that they have the benefit
of what has made others successful,
and then can employee that into their practice
of being an agent in the marketplace.
We believe it's important for incumbent-insurance companies
to take action now.
There's a lot of disruption in the marketplace.
There's continuing macroeconomic headwinds.
There's a constant threat
of a global slowdown in the economy,
and so the time to invest
in transforming distribution is now.
A really good first step for carriers would be
to think about the first step of our framework,
which is reinvigorating the agencies,
so thinking about developing a roadmap,
as well as a targeted investments
that actually help agents move
the needle around serving their customers,
and so thinking about lead scoring and lead management,
prospecting management, customer segmentation,
needs analysis, new-value propositions,
all the things that are in
the reinvigorate the agency dimensions of our research
are a really important first step
in thinking about investments
for transforming agency distribution overall
when it comes to carriers.
The ability to actually effect
the agent experience and the customer experience
through transforming of distribution
is really critical to the industry going forward
and the overall relevance of the industry going forward.