2015: The Life-Annuity Distribution & Marketing Annual - 2015 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 2015
- Increasing Competition for Advisors
- Insurers Confront Shifting Distribution Landscape
- Insurer Owned Broker-Dealer Landscape
- Summary
4. Key Insurer Marketing Trends in 2015
- Social Media Maturing, Mobile Usage Uneven
- Knowledge as Marketing Differentiation
- Summary
5. Advertising Expense Analysis
- Annuity and Life Company Advertising Expenses Increased in 2014
- 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
Appendix—Advisor Landscape
Introduction
Life and annuity marketing and distribution is evolving as technology empowers consumers and distributors. At the same time, traditional distributors continue to “move upstream” and focus on high net worth investors. This is creating an advice gap for middle income and affluent investors. In 2015, several alternatives are emerging to address this advice gap.
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.
Companies have spent considerable time, and human and financial resources, to understand this environment. Developing a longer-term perspective on sales and marketing patterns helps inform chief executive officers, as well as sales and marketing staffs, as to where the industry is heading.
Since 2013, we have reviewed key trends and developments in life and annuity distribution and marketing. In this 2015 study, we build on prior analyses and data to highlight current best practices in the life insurance and annuity industry.
Distribution Channel Trends and Issues
Insurers rely heavily on independent distribution to generate sales, market products, and service accounts. Trends and issues affecting these distributors, therefore, often have a significant ripple effect on insurer products and strategies. How is the distribution landscape changing in 2015 and into 2016, and how are some insurers and distributors responding? We look at some of these issues and trends, as well as insurer responses to them.
Advertising and Marketing Review and Analysis
While print and television advertising remain the major areas of industry marketing efforts, digital marketing is a growing area of interest. At the same time, mobile applications are an increasing necessity among consumers and distributors. We update our analysis of the digital marketing efforts of the 75 largest life insurance and annuity companies. With insurers maintaining a continued focus on cost management, we use statutory data to identify and analyze advertising and agency expenses, and expense ratios.
Sales Analysis by Product, and Channel
Sales information at the product and channel level provides a useful benchmark to understand an insurer’s strategic position in the market. Shifts in product mix and channel use provide indications of where new opportunities might arise or challenges loom. Using statutory data and Conning’s proprietary analysis, we analyze individual life and annuity sales by product and channel from 2010 through 2014. In addition, while a current sales analysis is useful, understanding how product-level sales might develop helps managers plan future strategy. Toward that end, we provide an abbreviated product-level sales forecast through 2017.
Broader Focus, Generating Deeper Insights, Based on Size
We recognize that company resources and strategies vary by size. Therefore, a useful analysis of distribution and marketing needs to provide both an industry-level overview as well as a comparative analysis based on company size. In this study, we try to focus on more than just the largest insurers and, when appropriate, categorize companies into large, midsized, or small groups.