Growing life insurance through the fusion of advice-based selling models and digital

1. Voice of the Advisor
Executive Summary:
Growing life insurance through
the fusion of advice-based selling
models and digital

2. 2
A growing number of consumers are adopting
online channels to purchase or service their
life insurance or retirement products. However,
given the personal and advice-based nature
of these products, the advisor model remains
a critical component for insurers’ sales and
distribution plans—and will continue to play a
significant role in a digitally enabled future.
That said, the ground is shifting beneath life
insurers’ feet. In a survey of 300 financial
advisors in North America, Accenture uncovered
foundational changes to what customers—
and advisors—expect from their insurers. In
particular, the Accenture North American
Insurance Financial Advisors Study identified
six factors that are pressuring insurers to make
material changes to how they conduct business.
1. Digital is essential to advice—and insurers
are not providing sufficient digital support
for advisors
Accenture research reveals a disconnect
between strong demand for digital—from both
clients and advisors—and the tools that insurers
provide to their advisors. When asked which
types of digital tools, platforms or channels that
are requested by clients but not offered by their
firm, four capabilities came out on top:
• Financial planning, such as portfolio
monitoring, asset accumulation or goals-
based investing tools (52 percent)
• Portfolio management, such as asset allocation
and 360-degree account views (51 percent)
• Personal financial management, such as
budgeting tools and calculators (48 percent)
• Scenario analysis and testing, especially
retirement planning tools (45 percent)
We believe that robo-advice or digital advice-
based models will also become part of the
ecosystem of solutions that insurers need to
provide. This could take the shape of a hybrid
advice platform that combines digital and
advisor relationships, which can better support
evolving client expectations about how they
learn about and buy financial products.
2. Clients are better informed, more involved in
decision-making and seek more transparency
Ninety percent of survey respondents believe
clients are better informed today than they
were in the past. In addition, 43 percent of
less-tenured advisors (less than 10 years of
experience) and 52 percent of more-tenured
advisors (10 or more years’ experience) reported
an increase in demand for financial advice.
Advisors agree that this demand for financial
advice is due to a pull from the customer, rather
than a push from the industry. This demand
crossed demographic segments. It’s not only the
growing number of boomer retirees, but also
millennials with a strong interest in savings and
protection as they saw and felt the uncertainties
of the economic crisis from 2008 to 2010.
There is a clear opportunity for insurers to offer
an advisor-led experience that not only engages
customers but also satisfies their desire for
more transparency and enhanced knowledge.
3. Insurance agents are increasingly moving
to a holistic advice model—and those
with an equal focus on insurance and
investment products report higher Assets
Under Management (AUM)
Accenture research found that 58 percent of
advisors consider themselves planning- and
advice-focused. Importantly, advisors that
adopt a holistic approach—focusing on both
insurance and investment products—report the
highest levels of AUM. Additionally, demand for
advice is highest within the mass market and
mass affluent market, with greater demand for
insurance products as client wealth increases.
4. Performance management, customer
retention and digital tools are the primary
drivers of advisor satisfaction and loyalty
Advisors are generally satisfied with their current
careers and positions, but there is significant
disparity within and across firms—in some cases,
the gap was as large as 39 percentage points.
In particular, five key measures drive loyalty
and satisfaction:

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• Effective performance measurement
Providing clear and accurate performance
metrics has the greatest impact on advisors’
loyalty and satisfaction
• Performance-based incentives
While incentives matter, they must be
accompanied by clear and effective metrics
• Provision of digital tools
Every time the right tool is provided, employee
satisfaction increases
• Providing competitive technology and tools
Having a competitive advantage promotes
worker satisfaction
• Supporting heir retention efforts
Firms that focus on heir retention have higher
AUM, less customer churn, and a more loyal
and satisfied financial advisor workforce
5. Over $210 billion in AUM could be at risk of
leaving the industry through wealth transfer
The growing ranks of the baby boomers means
there are significant assets in play in the retirement
space. However, many insurers have not invested in
a broader relationship with their clients’ households
or families. If status quo persists, the industry stands
to lose its clients’ heirs—approximately 79 percent
of their client relationship value, and an estimated
$210 billion in AUM.
6. Women advisors are younger, more
connected with clients and reflect the
industry’s changing dynamics
Women are increasingly involved in influencing
their family’s retirement and savings decisions,
and are also changing the dynamics of the
advisor workforce.
Women advisors tend to be younger—77 percent
are under the age of 46, compared with 19
percent of men advisors. They may also be better
connected to their clients’ needs, with 96 percent
reporting their clients are more engaged in their
investments, compared with 87 percent of men.
They also place significantly greater importance
on the support and training provided by the
insurer when evaluating their likelihood of
staying with a firm.
Recommendations
To help insurers adjust to the shifting landscape,
Accenture recommends focusing on five
strategic priorities.
• Develop a financial planning-focused advisory
channel—one that takes a holistic approach
to helping clients meet their investment and
insurance needs, and empowers advisors to
deliver a solution-based client experience
• Provide more sophisticated planning and
monitoring digital tools for advisors and clients
• Deliver clear performance management and
robust customer retention programs, and
leverage digital tools to drive advisor
satisfaction and loyalty
• Establish go-to-market strategies to capture
heirs now, such as tools for self-directed
investors, providing advisors for heirs and
enabling family estate planning at scale
• Enable women financial advisors to focus on
client development, and provide appropriate
training, support and teaming structures to
help them succeed
An industry in transition
The Accenture North American Insurance
Financial Advisors Study confirms what many
have suspected: the life insurance industry is in
transition, and evolving to become more focused
on advice and planning.
Many insurers will find it advantageous to
partner with digital advisors to acquire or
integrate new capabilities, which can attract
younger investors and smaller accounts, as well
as help advisors better connect with clients’
children to foster heir retention. Above all, a shift
toward a holistic, advice-led model is critical—
and advisors and insurers who do not make the
shift are leaving money on the table.

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Patrick Lyons is a Managing Director with
Accenture’s Insurance Client Services Group, and
leads Accenture’s North America Life Insurance
Transformation Practice. He has more than 25
years of experience advising global insurers in
developing and implementing comprehensive
business and technology strategies. Contact him
at patrick.m.lyons@accenture.com
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