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2014: The Life-Annuity Distribution & Marketing Annual - 2014 Edition

Life-Annuity insurers are operating in a dynamic, and often confusing, sales and marketing environment. In this study, Conning examines key issues affecting distribution channels and their development. We analyze and highlight current best practices in the life insurance and annuity industry relative to consumer advertising, marketing, social and mobile media, and sales activities. All distribution channels are considered, along with multi-channel approaches.

1. Introduction

2. Executive Summary

3. Key Distribution Trends in 2014

  • Distribution Continues to Rebuild Slowly
  • Distributor Recruitment Increasingly Diverse
  • Recruitment Continues to Move Beyond Compensation
  • Summary
4. Key Insurer Marketing Trends in 2014
  • Social Media Maturing, but Usage Uneven
  • Mobile and Education Support Continues to Develop
  • Summary
5. Advertising Expense Analysis
  • Annuity and Life Company Advertising Expenses Increased in 2013
  • Advertising Expenses by Company Size
  • Multiline Insurer Advertising Expenses Driven by Property-Casualty Products
  • Advertising Expenses by Distribution Channel Strategy
  • Summary
6. Individual Life Insurance Sales by Channel
  • Life Insurance Distribution Review and Forecast
  • Life Insurance Sales Results by Channel
  • Life Insurance Sales Results by Company Size
  • Summary
7. Individual Annuity Sales by Channel
  • Annuity Sales Increase, De-Risking Challenges Remain
  • Distribution Channel Strategy Overview
  • Annuity Sales Results by Channel
  • Annuity Sales Results by Company Size
  • Summary
Introduction

Life and annuity insurers are operating in a dynamic, and often confusing, sales and marketing environment. As with other industries, marketing and distribution are evolving as technology empowers consumers and distributors. Both consumers and distributors are looking to insurers to provide better tools and services that enable them to exercise greater control over their accounts. Beyond tools, both groups are looking to insurers for knowledge that deepens their understanding of their financial needs and how an insurer’s products meet those needs. In some cases, this is leading to disruption of traditional distribution and marketing, leading to further development direct-to-consumer channels. At the same time, some insurers continue to identify ways to tighten their affiliation with distributors, as tools and training become as important as financial compensation. Customers reflect an increasingly diverse nation, creating opportunities to target markets. Reaching those segments may require broadening traditional distribution to reflect that diversity.

Companies have spent considerable time, and human and financial resources, to understand this environment. A key challenge facing managers in developing this understanding is identifying where their company stands in relation to its competitors. Developing a longer-term perspective on sales and marketing patterns helps inform chief executive officers, as well as sales and marketing staffs, of where the industry is heading. At the same time, changes in distribution and marketing shift product and premium mix. Understanding how those shifts are developing provides a broader view of potential changes in a company’s future assets and liabilities that a chief financial officer or chief investment officer will need to manage.

In this study, Conning examines key issues affecting distribution channels and their development. We analyze and highlight current best practices in the life insurance and annuity industry relative to consumer advertising, marketing, social and mobile media, and sales activities.

 

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