The average age of a life insurance agent today is 57. While it’s reassuring to know that it’s an industry with many experienced salespeople, there’s a downside to that number too. Not enough new advisors are entering, and staying, to replace those who are retiring or leaving. In fact, the total number of agents has decreased 41 percent in the last 30 years. It’s a daunting challenge for the industry.
So Maritz Research teamed with the Life Insurance Marketing Research Association (LIMRA) to explore how to recruit and retain skilled agents. What’s particularly unique about this partnership is it allowed us to work with our colleagues in Maritz Travel and Maritz Motivation Solutions too. As experts in reward and recognition programs, it was important to understand what motivates life insurance agents. Many organizations are reframing and repositioning the way they reward and recognize producers―independent, exclusive or affiliate agents―in order to strengthen business development efforts. The financial services industry, and in particular life insurance companies, need to find ways to better engage and incent agents.
In the study, Engaging Producers Through Improved Incentive Practices, we surveyed more than 5,400 sales representatives from 20 LIMRA companies. Satisfaction among advisors today is high, but evidence shows advisors are considering leaving their current firm as the economy gains strength.
What needs to be done? A value proposition beyond compensation must be provided and must align with advisors’ needs and values. Through segmentation, we identified four groups for the industry to focus on:
Traditionally, we think of the “drivers” as the top sales performers and overlook other segments that may perform if we only knew how to entice and motivate them.
In addition to offering the data from the study, we also provided LIMRA and their member companies with recommendations and next steps.
Working with both LIMRA and its member firms, we are in the process of providing additional insights to them to drive their business.