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Intermediary Distribution: Steering Through Currents

Author

Erin Bowler, MBA
Senior Analyst, Distribution Research
LIMRA and LOMA
EBowler@limra.com

March 2026

The insurance distribution landscape is no longer a calm harbor. It’s a fast-moving current, reshaping everything from partnerships to product portfolios. Intermediaries are steering toward scale, with many now tethered to national marketing organizations for leverage, technology and negotiating power. This pursuit of size is more than a business strategy; it’s a survival tactic in waters where competition runs deep and consumer expectations shift like tides. As product mixes evolve, brand differentiation sharpens and technology accelerates. The question isn’t whether intermediaries will adapt, it’s how quickly they can chart a course through this transformation.

The Scale Imperative

Intermediary partnerships are evolving, and scale is at the heart of the shift. Eight in 10 intermediaries now report affiliation with a national marketing organization (NMO). For many, it’s about staying competitive: 37% cite this as their primary reason, while another 20% point to better compensation. In today’s marketplace, where size and leverage matter, NMOs deliver access to resources, technology, and negotiating power that smaller firms often struggle to match. This pursuit of scale is shaping not only how intermediaries operate, but also what they sell.

Product mix is changing alongside distribution strategies. Life insurance remains the cornerstone of intermediary revenue, but annuities are steadily gaining ground. Since 2021, annuity sales have grown year over year, and 45% of intermediaries report an increase over last year alone. This shift reflects more than just diversification — it signals rising consumer demand for retirement security and guaranteed income amid economic uncertainty. As intermediaries broaden their portfolios, they’re also rethinking how to stand out in a crowded market.

Brand differentiation is emerging as a critical lever. Nearly two-thirds of intermediaries offer proprietary, white-labeled products, primarily life insurance (82%) and, increasingly, annuities (49%). This trend underscores a strategic push to build loyalty among producers and consumers alike. By controlling product branding, intermediaries create a unique value proposition, an advantage that grows more important as competition intensifies and scale becomes table stakes.

Demographics tell a story of experience yet impending change. Nearly 4 out of 10 producers are 55 or older, and another third are in their late 40s or early 50s. These are seasoned professionals who have weathered storms, built trust, and carried the industry forward. But here’s the reality: Ships don’t sail forever on the same crew. Tenure reinforces the point: Almost 30% have been in the business for two decades or more. That depth of experience is invaluable, but it also signals a looming transition. When these producers retire, they take with them not just relationships, but institutional knowledge that can’t be replaced overnight.

Still, the outlook remains optimistic. Over three-quarters of firms expect their producer networks to grow by an average of 25% over the next three years. This confidence is fueled by a steady stream of new contracts. In fact, over the past 12 months, intermediaries signed a median of 45 new producer agreements, with some reporting numbers in the hundreds and even thousands. The entrepreneurial spirit of this industry is alive and well. More than 9 in 10 of these new producers are independent, reinforcing the DNA that has defined this business for decades. For those who have watched this industry evolve, this surge isn’t just about numbers — it’s about resilience and adaptability. Intermediaries are doubling down on growth because they know the stakes are high. A strong producer network isn’t just a metric; it’s the engine that drives everything else.

Carrier relationships remain a cornerstone of success. When asked why they place business with certain carriers, intermediaries point to product pricing, faster and easier underwriting, and a broad or unique product line. But carriers still have room to improve. Intermediaries want consistently fast underwriting turnaround times, more personal contact from the home office, direct data feeds for seamless communication, and better content from wholesalers. Education on compliance and ethical product use also ranks high. In short, carriers that deliver speed, support, and transparency will win in a market where intermediaries are fighting harder than ever to grow and differentiate.

Building Tomorrow’s Infrastructure

Intermediaries are laser-focused on growth, and their priorities make that clear. At the top of the list is increasing sales of existing products, a goal cited by an overwhelming 85% of respondents. Close behind are those committed to expanding their producer networks, signaling a strong push to broaden distribution reach. Technology is also on their radar. Nearly half aim to improve digital solutions for producers, while roughly the same number are focused on enhancing sales support and service. These priorities underscore a dual mandate: drive revenue today while building the infrastructure for tomorrow. And increasingly, that infrastructure is powered by technology.

Figure 1. Intermediaries’ Top Business Priorities

Source: Inside the Intermediary 5.0: A LIMRA-NAILBA Study

Artificial intelligence (AI) is no longer a future concept — it’s here. Half of intermediaries already use AI tools like ChatGPT, and another 18% plan to adopt them soon. Only 3% say they’re not considering AI at all — a striking indicator of how quickly this technology is becoming mainstream. For an industry historically slow to change, this level of adoption signals a turning point.

The applications are practical and powerful. Current use cases center on marketing, sales enablement, and productivity. From crafting social media campaigns to automating routine tasks, AI is helping intermediaries scale their efforts without scaling their headcount. For firms willing to embrace innovation, AI isn’t just a tool; it’s a growth engine.

Charting the Course Ahead

The currents driving this industry are strong — scale, diversification, technology and demographic shifts — and intermediaries that learn to navigate them will find opportunity beyond the horizon. Growth remains the compass, but the tools to reach it are changing. AI is no longer a distant lighthouse; it’s onboard, powering efficiency and innovation. As seasoned producers prepare to pass the wheel and new networks expand, resilience and adaptability will define the next era of distribution. For those willing to embrace the momentum, the journey ahead isn’t about weathering the storm; It’s about sailing confidently into a future where transformation is the tide, and progress is the destination.

 

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