Banks That Establish Life Insurance Sales Goals Are More Successful, Finds LIMRA and Kehrer-LIMRA
WINDSOR, Conn., Oct. 11, 2010 — Banks that have established life insurance sales goals obtain substantially higher insurance productivity from their sales representatives than banks without goals according to the 2009/2010 Bank Life Insurance Study conducted jointly by LIMRA and Kehrer-LIMRA.
“Historically, life insurance sales within banks have not reached industry expectations but recently we have noted an impressive uptick in life insurance sales and wanted to explore why,” said Patrick Leary, assistant vice president of LIMRA’s Distribution research. “While other factors are at play, our study found that the simple act of setting and managing life insurance-specific sales goals (as opposed to overall investment product sales goals) can help create a significant increase in success as measured by new life insurance revenue. It’s amazing how often the most basic business practices have the highest impact.”
The study found that 60 percent of banks had an overall institutional goal for their life insurance sales program. In these banks, total revenue penetration was almost a quarter higher than in those without established goals. Life insurance sales programs in banks and credit unions are gaining momentum. There has been five straight quarters of significant life insurance sales growth through the bank channel. Also, for those participating institutions with life-specific goals just one-third did not meet their goals in 2009 compared to the one-half that missed their goals in 2008.
While an institutional sales goal is important, it is trumped by sales goals at the rep level. Researchers found that life insurance productivity is significantly higher for both financial consultants and platform reps in programs that have established insurance goals at the sales rep level. Average productivity of financial consultants with a goal is almost 68 percent higher; platform reps’ productivity is 63 percent higher.
In order for a life insurance program to succeed, it needs to be embraced by all levels of the institution, from senior management, to sales managers, to the branches. Without goals, life insurance will be hard-pressed to gain attention, especially when sales goals for other product lines exist.
To help make life insurance part of the culture within a bank, some institutions make insurance sales a job requirement. However, only 59 percent of the programs in this year’s study have life insurance sales as a job requirement for any sales or management staff and most importantly few have it as a job requirement for financial consultants or platform reps, the channels of choice for life insurance distribution.
“The affect of setting and managing goals on the rep level is undeniable,” said Scott Stathis, managing director of Kehrer-LIMRA. “Life insurance is increasing in importance in bank programs, especially since the rate-sensitive ‘go-to’ annuity product have been less desirable lately. As an advisor you are not doing your job if you are not talking to your clients about their life insurance needs. As more bank investment program managers realize the importance of this aspect of sales practice management we will continue to see an increase in the setting of specific goals around life insurance sales. This is a true win-win since it’s good for the banks and good for the bank’s clients” added Stathis.
LIMRA is a worldwide research, consulting and professional development organization that helps more than 850 insurance and financial services companies in 73 countries increase their marketing and distribution effectiveness. Visit LIMRA at www.limra.com.
Kehrer-LIMRA is a LIMRA subsidiary, which provides research and consulting services on bank sales of life insurance, annuities, investments and wealth management services. The firm also works with financial institutions and product providers to improve their distribution of annuities, mutual funds, securities brokerage, life insurance, and wealth management services.