Do banks need more meeting and incentive programs to help jumpstart their life insurance sales? A recent study spearheaded by the American Council of Life Insurers suggests that they do.
For the past five years, since the Gramm-Leach-Bliley Financial Services Modernization Act became law, banks have been permitted to sell life insurance. But, the initial excitement about a new market opportunity never blossomed into robust sales. The ACLI study, "Bridging the Cultural Divide between Banks and Life Insurers," polled both banks and insurance companies to find out why.
Overall, the study says that "banks and insurers are still seeking common ground, particularly in distribution, marketing and sales, product design, risk and profitability, administration and operations, and effectiveness." How can meetings help them do this? Bank respondents cited the need for more life insurance product training. Insurer respondents suggested that banks can improve on their lackluster insurance sales by holding more regular business-planning meetings, as well as setting production goals and implementing sales incentives. "To engage senior management support, insurers increasingly realize the need to integrate insurance into bank goals and reward programs at all levels of management," said an ACLI executive summary of the study.
Study recommendations on how banks can achieve greater insurance sales point to the effectiveness of training meetings, teambuilding meetings, and incentives. Specifically, banks should provide wholesaler training, use incentives to help integrate life insurance sales goals with bank sales goals, and conduct more frequent meetings between the senior staffs of banks and insurers "to build a dynamic sense of partnership."
The study, which was released in October, is based on 76 completed questionnaires: 36 from banks and 40 from life insurance companies. It was co-sponsored by Baker & Daniels, an insurance and financial services company; CF Effron Company LLC, a bank insurance consulting firm; and KPMG LLP, an accounting and tax firm. —Regina Baraban