More than one third of the time an advisor stops placing business with a carrier, the reason is service related, according to a new LIMRA and EY study.
While product features and competitive costs will initially get an advisor’s attention, ongoing service and support will keep it.
In the last two years, 20% of advisors dropped a life or annuity carrier. Poor customer service and advisor support were the top two reasons for carrier attrition, according to the study.
When looking just at life insurance, 46% of advisors cited strong customer service and client experience as why they placed so much business with their top carrier. While advisors typically place business with three to five carriers, they place almost 60% of their insurance sales with their top life and annuity carrier, which is why it is critical for providers to stay near the top of advisor rankings.
The LIMRA-EY study shows all types of advisors now offer a wide selection of products and services. To be successful, carriers must effectively align their service models to engage with desired advisor segments. Carriers need to continually reevaluate their business model and their value proposition to remain relevant in the market.
Carriers and distribution firms must fortify current distribution arrangements where they are strong and develop new capabilities in areas and channels where they are lacking. LIMRA SRI research suggests a differentiated and dynamic approach aligned to a specific practice model and advisor segment is necessary to remain relevant. Insurers that can help advisors continue the growth trend of the last few years will enhance their own ability to grow.
Carriers must determine if their go-to-market strategies are ready for the future. What worked in the past may no longer be viable as advisors adapt and evolve their practices to reflect market realities. Product design and cost structure will remain critically important but product and service quality for both advisors and consumers are increasingly important differentiators.