There have been major revolutions in life insurance marketing, most notably with the introduction of soliciting agents in the 1840s, the rise of the debit agent in the 1880s, the advent of group insurance in the 1930s, and the growth of nonexclusive producer companies since the end of World War II. Radical change, therefore, is not unknown in life insurance marketing, and it might happen again. However, evolution seems to be more likely than revolution, and that evolution will be triggered by forces already in place that are sure to have some impact on how life insurance will be marketed in the future.

One of these forces is an increase in competition. Insurance products are no longer just marketed by purely insurance-related entities such as banks and stockbrokers. Government regulations now limit the activities of these noninsurance marketers, but these regulations could change. Any increase by noninsurance organizations, which have a totally different marketing orientation, could alter the ways insurance marketers operate.

Furthermore, the life insurance business is becoming a global business with foreign insurers invading the United States and vice versa. Many foreign insurers also have a different marketing orientation, and their approach, especially their relationship with banks, could force United States insurers to modify their distribution methods.

There is also a major demographic shift going on in the United States. The consequences are that the work force will grow more slowly than at any time since 1930, the average age of the work force will rise, meaning that the pool of younger workers entering the labor market will shrink; more women will continue to enter the work force; minorities will be a larger share of new entrants into the work force; and immigrants will represent the largest percentage increase in the work force since World War I. Such changes are bound to affect how producers are recruited and how they operate.

Another trend is that the focus of the life insurance business is turning more to living benefits than death benefits. The key result of this trend is that the business will be selling more annuities and other retirement and savings-oriented products than life insurance. Since these products have lower margins and pay lower commissions, there is some concern that, as core products, they will not be able to support the cost of existing distribution systems.

Finally, in the difficult financial environment in which the life insurance industry finds itself�a slow economy, the need to increase surplus, and the pressure of competing on the basis of price�companies might make a concerted effort to find the least expensive ways to distribute products. One suggested approach is to pay closer attention to the natural linkage between the market segment, the products serving that segment, and the distribution system serving that market. This approach recognizes that to be in any market that is not economically consistent with the company�s distribution system or product, the company must meet or better the competition�s performance standards in that market. Otherwise market share will decrease and acquisition costs will rise.

In the past companies could live with those inefficiencies because of the margins in place at the time. Those margins are gone and, most likely, will never return. Therefore companies must refine and exploit the market segment-product distribution system linkage. Over time, the distribution systems now in use gravitated to the markets they service without prior planning or direction. It is time now, say proponents of the approach, to attack these markets with planning and direction. This will lead to distribution system pluralism�that is, the many different distribution systems described earlier (and others yet to be developed) will be implemented across companies rather than across the industry.