This document discusses strategies for increasing the value of distribution in life insurance. It notes several macro trends shaping the insurance industry, including changing competition, shifts in growth markets, increasing risks and regulations, and changing consumer attitudes and behaviors driven by digital technologies. The document also highlights opportunities in the US life insurance market, including among middle-income households, boomer offspring, small businesses, and digital-savvy millennials. It proposes five steps for high-performance distribution: transforming to holistic solutions; embracing team-based models; integrating succession planning; digitizing distribution; and optimizing sales performance.

1. Changing the
Distribution Dynamic
Strategies for increasing the value
of distribution in life insurance

2. Macro trends shaping the future of insurance
Changing face of competition
• Brokers and aggregators changing
the sales arena
• New cooperation models rising
• Differentiation in customer servicing
Shift in growth
• Fast, sustained growth in
emerging markets
• Longer life expectancy impacting
L&H demand
Increasing risk & regulatory pressure
• Increased fiduciary and regulatory
responsibilities
• Increased fraud and social media risks
• Increasing price transparency
and consumer protection
Changing consumer attitudes & behavior
• Less loyal consumers
• Channel preferences shifting to online
• New consumer groups and
individualization in mature market
• Heterogeneous customer base in
emerging markets/segments
Consumerization of IT
• Digital marketing
• Mobile internet and devices
• Analytics
Financial crisis legacy
• Slow, uncertain GDP growth
• Low interest rates
• Volatile capital markets
• Tightening regulations
• Lower RoE

3. An industry grappling with distribution challenges
*Morgan Stanley Global Consumer Survey June, 2014 **Source: LifeHealthPro 2012 “Facing up to an aging producer workforce” ***LIMRA, Life InsuranceAwareness Month, September 2013
Over 85% of customers interact once per month or less – among the lowest across industries*
Low multi-product penetration
Third-party distribution channel owns customer relationship; Insurers have
difficulty differentiating
Sales and service processes not aligned with consumer preferences
• Products are complex
• Consumers looking for personalized advice
• Want access to multiple channels
• Expect to be able to use mobile devices to shop and interact
Sales-force is shrinking (-25% over 30 years), getting older (53% of advisors over 50,
with median age of 56)**
Carriers unable to attract fresh talent; inexperienced hire recruiting declined 1%
from 2012 to 2013, while experienced hires increased 10%***
Business leaves after agents retire, creating need for succession planning
• Only 29% of advisors have a succession plan
• Banks, insurers, traditional advisory firms, and startups are converging on distribution

4. There continues to be substantial, increasing and potentially underserved
income and protection needs across all demographics of the market.
However, the US market has substantial growth potential
• Per capita penetration of life insurance is significantly lower than
other developed economies, including Japan and the United Kingdom
• 44% of American households do not have life insurance
• Of consumers who believe they need life insurance, 86% haven’t
bought it because they think it is too expensive
• Retirement: 82% of consumers are worried about the financial
situation after retirement
• Wealth Transfer: Wealth transfer from the Greatest Generation to Baby
Boomers will see over $12 trillion change hands; and wealth transfer from
Baby Boomers to their heirs is estimated to exceed $30 trillion
World’s largest
Low penetration
Need for protection
Need for solution
• Largest insurance market and projected to grow to $766 billion by 2020

5. The untapped potential is staggering
Despite the current level of household penetration, there are significant opportunities to
increase sales in “untapped markets.”
Insurers that use novel approaches and innovative strategies to cost-effectively bridge the life insurance
coverage gap within the 32- to 47-year-old age bracket can potentially appropriate the lion’s share of
this vastly underpenetrated market.
Estimated total size of
the opportunity
$0.7 trillion
$0.3 trillion
Source: Trillion Dollar Baby – Growing Up: The sales potential of the US underinsured life insurance market, LIMRA, 2011.
Gen Y
(Age: 20-31)
Gen X
(Age: 32-47)
Baby boomers
(Age: 48-66)
Potential opportunity in
the 12-month period
Untapped
market
size ($)
$7.1 trillion
$3.6
trillion
$7.0 trillion
$2.2
trillion

6. Four key ‘white space’ opportunities
• Middle market (~52 million households between $35,000-$100,000 annual income) has a
particularly low Life insurance ownership level at 4%
• The protection gap is estimated to have increased from $6.5 trillion in 2006 to
$10.2 trillion in 2012, indicating a substantial untapped market
• Small businesses (<100 employees) comprise 98% of US firms, with 42 million employees
or about 36% of the workforce.
• Only 41% of small businesses offer life insurance, but when they do, participation is 96%
• More than 70% of small business employees have no retirement plan available from the company
• There are ~80 million digital-savvy Millennials born between 1980 and 2000, with
10,000 turning 21 every day
• Millennials are the most motivated to build and pass along wealth: 40% have a strong
determination to pass along wealth and 43% identify themselves as conservative investors
• 75 million Baby Boomers are on the verge of retirement, and 10,000 people will turn
65 each day for the next 20 years
• Baby Boomers will transfer wealth exceeding $30 trillion to their heirs, but 53% say they
lack the information to prepare for retirement and 86% have little or no awareness of
retirement products offered by insurance companies
Middle
market
Boomer
offspring
Annual market size: premium and fees ($B)
Millenials
Small
business
employees
Sources: US Census; SHRM; Accenture Research
12
5
3
8

7. • Approx. 44% of
US population
• $27 trillion in assets
• Not a homogenous
group, but have
shared
characteristics
• Active investors
with higher levels of
income, education
and assets
The new consumer is also extremely Digital – across generations
Gen D:
75 million active investors with
$27 trillion in assets
A set of consumers that has higher
levels of education, wealth
potential, and positive attitudes
toward technology in their lives.
This group spans generations.
Attributes/ Behaviors
Overview Generation D Use of Technology
Composition
• 26% Millennials
(21-30 yrs)
• 48% Gen Xers
(31-45 yrs)
• 25% Boomers
(46-70 yrs)
• Have a deeply digital
lifestyle
• For the always-
connected
consumers,
technology—online,
mobile, and social—
is deeply woven into
the fabric of their
lives as they strive
to create, maintain
and pass along
wealth

8. Five steps on the path to high performance distribution
1 2 3 4 5
Transform from a
product and channel
constrained model to
provide holistic
solutions that
address customers’
wealth protection,
income and
investment needs
Move to a
solutions-driven
customer-centric
model
Traditional solo
producers need to
join teams that
address customer
needs holistically,
and integrate
recruiting,
on-boarding and
succession planning
into teams
Embrace teaming
Carriers must
address this issue,
both to save
books-of-business
and also to ensure a
long-term customer
experience
Integrate
succession
planning
Comprehensive
end-to-end and
interconnected
digital enablement
with embedded
analytics will
become table stakes
Digitize distribution
Carriers need to
proactively address
sales performance,
leveraging analytics
and aligning
compensation
models to drive
desired behaviors
Optimize sales
performance and
compensation

9. Download the report:
https://www.accenture.com/us-en/insight-changing-life-insurance-
distribution-dynamic