Most insurance company CFOs consider distribution to be a key business issue, according to a survey by Tillinghast-Towers Perrin. Out of the 30 respondents, 87% thought distribution of high importance, and nearly a quarter cited it as the top concern.
"The majority of CFOs are looking to grow their business across all distribution channels, and the pressure to boost sales figures is more intense than ever," said Richard K. Berry, principal at Tillinghast. In response, many insurers are engaged in active recruiting programs and are looking for other ways to expand distribution.
Experienced agents play a key role in this effort; within the companies that are looking to expand life and annuity distribution, 62% of CFOs said they are planning on aggressively recruiting experienced producers. Ironically, the number of producers overall has decreased 30% from 1993, when Tillinghast estimates there were 250,000 producers, to today, when it estimates a population of 175,000.
In addition to recruiting efforts, insurers are looking at acquisition and alliance strategies; the top three objectives are growth in production (87%), profitability (57%), and an increase in number of producers (39%).