As technological, regulatory and demographic trends reshape the wealth management industry, distributors and product manufacturers face an uncertain future. Central to the intersection of these external forces, are profound changes at the client level. In tomorrow’s wealth management environment, the client is set to have more power in terms of product and service offerings and as such, businesses models across the wealth management spectrum may need to change to meet this new standard.
In such a scenario, distribution is more important than ever as the gateway to the client. Distribution, however, is undergoing a revolution of its own, transitioning from a transactional to a relationship-based client-model—a notable shift that has already been witnessed in the banking industry. The transformation by the Big Six of their bank branches over the past decade and the development of cradle-to-grave client strategies speaks to what might lie ahead for insurers.
Insurance, in most cases, remains a transactional and volume-driven business. Economic incentives for distributors of life and living benefits policies were largely built to attract new business, not to retain existing relationships. But are current business practices the way of the future? While the path insurance distribution will take remains uncertain, to understand the possible roads ahead, we must understand the state of the industry today.
In this month’s special feature, Welcome to the In-between State: Insurance Distribution and the Undiscovered Country, we examine the industry’s renewed focus on the client and how insurance carriers will need to develop strategies to meet this customer-centric environment. We begin by examining the strong life insurance sales in 2016 and the recent experience of the current distribution model. This special feature further evaluates 2016 results and provides channel by channel analysis of the challenges and opportunities for insurance carriers, exploring how the transformation in the insurance distribution front might unfold.