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The life insurance agency distribution model

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on the cusp of significant change.

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There's a lot of reasons for this,

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none more important than the fact

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that we're dealing with global-economic headwinds,

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low-interest rates,

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disinterested consumers, low-growth rates overall.

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What we are really excited about when it comes

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to thinking about transforming agency distribution globally

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is the fact that operating margins could actually

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be enhanced by 75% our research suggests,

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and today the average insurance company

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in the life space deals with about

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a 6.5% operating margin.

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We think that they could get

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to about an 11.5% operating margin.

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As we think about the economics of our industry,

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there's actually a fair amount of compensation

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that's paid to agents by customers

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for them to sell them life insurance,

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and so we think there's a lot of opportunity

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to transform the way that life insurance is sold

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to customers, as well as change the economics,

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the underlying economics of the overall value chain,

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to actually allow various stakeholders

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including investors and carriers, carriers,

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agents, as well as customers, to actually realize

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a much more valuable and efficient and effective way

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of interacting with the industry.

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The agency model of the future is gonna be different

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in several ways.

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First of all, we don't believe the agent that we have today,

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the human-to-human interaction

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of an agent is going to change.

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The question becomes, how do we think about making

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that agent much more productive,

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and surrounding the agent with a set of tools

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that enable that productivity.

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And in the world today I believe China is

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the most advanced marketplace when we think about

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sort of a digitally enabled, face-to-face agency model.

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In that marketplace the agent is

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the celebrity in the system.

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They're fully enabled with a digital experience,

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not only from a prospecting perspective,

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but from a recruiting perspective,

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that is agent-recruiting perspective

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to a training perspective,

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and then when you think about interacting with customers

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from a lead management and lead-scoring perspective,

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and then the online-submission capabilities,

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as well as service capabilities, are second to none.

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In China they're using AI in a number

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of different parts of the value chain,

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and so let's talk about agent recruitment for a second,

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and you know agent recruitment and artificial intelligence,

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as well as analytics there,

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I think what the Chinese insurers have been able to perfect

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is looking at their productive agents of today,

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finding out what attributes those agents actually have

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and then use that not only in the recruiting process,

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but also in the training and development process

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for new agents so that they have the benefit

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of what has made others successful,

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and then can employee that into their practice

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of being an agent in the marketplace.

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We believe it's important for incumbent-insurance companies

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to take action now.

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There's a lot of disruption in the marketplace.

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There's continuing macroeconomic headwinds.

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There's a constant threat

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of a global slowdown in the economy,

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and so the time to invest

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in transforming distribution is now.

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A really good first step for carriers would be

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to think about the first step of our framework,

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which is reinvigorating the agencies,

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so thinking about developing a roadmap,

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as well as a targeted investments

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that actually help agents move

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the needle around serving their customers,

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and so thinking about lead scoring and lead management,

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prospecting management, customer segmentation,

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needs analysis, new-value propositions,

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all the things that are in

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the reinvigorate the agency dimensions of our research

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are a really important first step

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in thinking about investments

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for transforming agency distribution overall

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when it comes to carriers.

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The ability to actually effect

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the agent experience and the customer experience

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through transforming of distribution

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is really critical to the industry going forward

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and the overall relevance of the industry going forward.