Windsor, Connecticut and New York, NY, March 3, 2009 - A multi-faceted approach is the best way to improve the performance advisor, according to a new study of the distribution industry in the life insurance recently published by Limra and McKinsey & Company.
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The study, conducted in the fall of 2008, the survey, more than 1,200 advisors across a wide range of distribution channels to identify the challenges facing the industry and practical measures that carriers can take to improve productivity and retention.

The researchers found that life insurance companies to recruit well-trained counselors, the launch team-based practices to tailor support services to maximize their value, to realign the role of sales managers to better meet the needs advisor, migration and the experience of many advisors to advise the teams advising significantly improve performance.

Counselor distribution is under stress, "said Vivek Agrawal McKinsey, a member of the team that conducted the study. "The number of counselors has remained stagnant and their average age is rising. Although advise Revenue has increased over the past four years, stagnant sales and a shift towards investment products, with their low margins, have put pressure on carriers

"Our research in McKinsey identifies a number of concrete steps that companies can take to overcome these challenges and to enhance the success of their board of distribution," said Pat Leary, Limra analyst and member of the research team. "Companies can use this information to improve productivity and loyalty among financial advisors."

The Limra / McKinsey study has identified five critical areas:

(1) education and experience in recruitment consulting. According to the study, counselors with higher education (at least a bachelor's or master's) earned about 40 percent more than those without. In addition, advisors with previous experience earn 40 percent more than those without experience in the first seven years of occupation. However, after seven years, those without prior experience (ie recruited from college) to fill this gap and earn a comparable amount. Interestingly, the junior officers of experience selling on average less than their peers.

(2) Launch consulting team based on practices is by far the most important factor in their success. The Limra / McKinsey study found that counselors placed in a team-based practices are 10 times more likely to succeed. This factor was most important predictor of success advisor, eclipsing even the impact of his attitude.

(3) Adapt the services they offer can help counselors desks to achieve improved productivity and retention, and significant savings. The study identified areas where there is a gap between the support services provided by carriers and service advisors more value. Carriers should focus on enhancing their services to the ease of doing business, which have a high value of mutual aid, and continue to provide specialist support for free. Right-sizing training and realign management support will help companies capture significant savings.

(4) Ensure that managers provide field support services that most advisors value improves the supply of a carrier. According to the study, field managers are investing their time in support services that advisers worth less. In addition, land managers are under-used, providing support to more than 40 percent of advisors they serve. Carriers can improve the efficiency of their field managers and improve retention to advise managers by helping them prioritize their time, drop under-valued services and focus on high quality services.

(5) The migration of experienced consultants who have been exploited as a soloist with many practitioners advise teams can significantly increase the likelihood of their success. There are two main factors that drive the success of advisers: the amount of leverage in their practice and the number of clients they serve. The study shows that top-quartile producers earn two to three times by their peers, and advisors are much more likely to be in this quartile if they adapt their operating model along these two dimensions. In particular, the probability of success increases with the increase in leverage, either by the addition of personnel or the formation of multi-advisor practices. Survey data reveals that the multi-advisor practices are three to four times more likely to succeed than in solo practices. These practices create value sales by improving productivity and by creating economies of scale.

Limra International is a global research, consultation and professional development that contributes more than 850 insurance and financial services companies in 73 countries increase their marketing efficiency and distribution.

McKinsey & Company is a management consulting firm that helps large companies and organizations make distinctive, substantial improvements and sustained performance. With over 7,500 consultants deployed from 90 offices in nearly 50 countries, McKinsey advises companies on strategic, operational, organizational and technological. In addition, the company contributes to a wide range of government institutions, government and nonprofit organizations with their management problems.

Contacts:

Catherine Theroux, Limra, 860-285-7787, ctheroux@limra.com
Allison Cooke Kellogg, McKinsey, 212-351-0746, allison_kellogg@mckinsey.com