By John Hilton
InsuranceNewsNet October 27, 2019
BOSTON
-- Insurance wholesalers have long been a critical link between insurers on one
side and consumers on the other.
As the
insurance industry goes through a revolution of sorts, the future of
wholesaling is somewhat in doubt. Can those middlemen and women adapt to the
new insurance order, complete with regulatory and technological pressures?
The
industry pressures start with technology integration and regulatory changes,
but how those things shake up the distribution channels is causing further
uncertainty for carriers and executives at the top of the chain.
As a
result, carriers were eager for more information and a status update of sorts,
said Patrick Leary, corporate vice president for LIMRA.
"A
lot of things were coming together and we were getting a lot of requests as we
talked to companies on wholesaling and wholesale models and how trends were
going to be changing as some of these things came together," he explained.
So
LIMRA decided to update a study it had done previously in partnership with
Ernst & Young. The study is sure to come up this week at the LIMRA 2019
Annual Conference.
"This
is a study that we’re doing in across the U.S. and Canada and we’re serving
advisors, we’re serving external wholesalers and we’re also doing one-on-one
interviews with senior distribution executives at both carriers and
distribution firms just to get an understanding on where they see wholesaling
evolving," Leary said.
The
study results are revealing the evolution of a theme researchers saw
"bubble up" in their initial study, Leary said.
"But
it truly is kind of central now and it’s kind of the product moving from being
the differentiator to other things being differentiator, like value-added
services, practice support, new technologies," he said.
That
trend is really being driven by regulators at several different levels rushing
to adopt best-interest sales standards. The National Association of Insurance
Commissioners hopes to present a tentative best-interest model law to its full
committee at an early December national meeting.
The
rush is being fueled by several individual states who are adopting their own
best-interest standards. Likewise, the Securities and Exchange Commission has a
best-interest standard aimed at brokers.
"What
all that does is it means the conversation really needs to change," Leary
said. "It can’t be 'Okay you have to sell my product, it’s the best
product.' It’s got to be more than that.
"The
conversations are more around how the product can help the advisor better meet
the needs of the client – how what the wholesaler is offering can help an
advisor grow their practice and better serve their clients."
Identifying
Advisors
In
addition, leveraging new technology for the same ends remains a growing
influence on wholesalers. And it's already being felt on the ground, Leary
said.
"Companies
are starting to use data analytics and predictive analytics to help map
territories and identify advisors that they should be visiting," he said.
In the
past, companies had very imprecise data to try and identify the advisor
population. People working the phones would then try to schedule visits. It was
an inefficient system, Leary said.
All of
the trends and changes are leading to the same place, Leary said. That place is
part of the larger theme of the conference.
"It’s
about relationships, and sales management and communication technology,"
he said. "It’s moving away from a product-centric discussion model towards
more of a relationship-based model that leverages technology."
InsuranceNewsNet
Senior Editor John Hilton has covered business and other beats in more than 20
years of daily journalism. John may be reached at john.hilton@innfeedback.com.
Follow him on Twitter @INNJohnH.
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