WINDSOR, Conn., Sept. 27, 2011 — A new LIMRA study finds that a more than a quarter of producers (26%) consider the financial strength of an insurer one of the two most important factors in 2011, compared to just 16 percent in 2008 and 2003 (when prior surveys were taken).
“While awareness of insurers’ financial strength has increased for producers, a competitive product line remains by far the number one consideration for producers (4 in 10) when choosing a company with which to place their traditional fixed life insurance business,” said Denise Marvel, assistant research director, LIMRA Distribution Research. “Our study also took a close look at how other items affecting the day-to-day business flow influenced producers’ opinions.”
The study, What Producers Value: From Companies and Independent Intermediaries in 2011, examined the types of service and support provided by insurers that producers said they valued. Overall, training was the number one choice, with 32 percent of producers selecting an aspect of training as most important. Not surprisingly, more producers felt product training was the most critical; fewer chose sales training and one-on-one coaching/mentoring as most important to their success.
Technological support was second — 20 percent of producers identified a technology-based support service as most important. This included things like online access to client records, new business application status and commission reporting, as well as consolidated client statement reporting and electronic submission of new applications. The good news is that 6 in 10 producers felt carriers provided very good or excellent support in these areas.
Other areas of value to producers include point-of-sale support (17%), business development support (16%) and operational support (15%). While these individually don’t represent a large portion of producers, collectively, an element within these categories are “most important” to half of all producers surveyed. The dilemma for companies becomes how to correctly allocate limited resources to meet the needs of the producers writing business with them. Companies need to consider their distributors’ typical business models and develop ways to determine how that affects their support. This will help them know which programs to develop to meet producer needs.
Another factor that plays an important role in producers’ decisions to do business with companies is the relationship they have with them. LIMRA’s decade-long research in this area consistently shows that beyond satisfying producers’ business needs, companies must still work hard to attract and retain producers. In this study, about half of producers who place business with an independent intermediary, such as a BGA or IMO, said they prefer working with a local firm so they can develop a close personal relationship, allowing them to work with staff face-to-face. For almost one quarter, receiving personal attention and good communication from a local firm is the most important reason. Another 21 percent value the local support and access to knowledge afforded by frequent contact. Having additional resources, being flexible and otherwise being easy to do business with is most important to another 10 percent.
“In short, many things can bring producers and companies together,” noted Marvel. “The relationships that develop can determine whether a company will get only one or two cases, or a constant flow of business. Producers value a carrier that they can proudly represent to their clients, and companies value good partners in the field who write quality business.”
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.