How Insurers Can Boost the Productivity of Their Financial Advisors

While growth is important to any business, it has had particular resonance for the life insurance industry in recent years. The penetration rate for life insurance peaked in 2013 at 62% and has steadily fallen to 51% today. Penetration for individual life products, specifically, has been even more anemic—stuck in the high 30s for five years. Given these numbers, life insurance executives cited “growth” as a top priority in BCG’s joint report last year with LIMRA. This year, in our follow-up report based on a survey and interviews with top insurers, we dig deeper into one of the primary strategies they are using to pursue that growth: increasing the productivity of financial advisors (FAs).

Leading insurers have become much better at defining and tracking key performance indicators (KPIs) that further their business goals. These include individual performance KPIs for financial advisors (such as volume and premium) and strategic KPIs (persistency rate and placement rate, for example). One of the most important findings from this year’s research is that the top quartile of FAs is twice as productive as the median FA across all distribution channels. That creates a huge incentive to find ways to replicate their behavior.

To this end, some carriers are creating an integrated ecosystem—a productivity flywheel that starts with developing KPIs to track FA performance, measures and identifies top-producing FAs, creates initiatives to boost productivity of all FAs, and then monitors and continuously iterates tools and tactics based on results. These efforts aim to increase the ease of doing business and improve productivity, and include investing in sales support, FA- and customer-facing technology, and wholesaling. While carriers are also exploring how AI could augment the ability of FAs to serve policyholders, they are cautious about deploying generative AI in advisor-facing activities.

Given the trend toward more FAs in independent channels and fewer in affiliated channels, leading carriers are also looking for ways to help wholesalers boost FA productivity. For example, some carriers use their data to provide wholesalers with a ranked list of the best independent FAs to engage based on a combination of time, channel, and value. They also provide wholesalers with a summarized view of the FAs, including topic recommendations, interaction history, and feedback. And they recommend specific actions for each wholesaler to engage with these top FAs.

These are just some highlights of our 2024 survey. The slideshow below offers more detailed results, providing greater insights into how life insurance leaders are working to improve financial advisor productivity.