Two-thirds of life, health and benefits insurance market participants have added revenue to their firms in the past three years by engaging in strategic alliances, according to an industry sample taken by the Inter-Company Marketing Group (ICMG).
Of nearly 70 survey participants, 68 percent said that strategic alliances had added to their revenue, and another four percent said alliances replaced lost revenue. Strategic alliances were defined as partnerships, product distribution agreements, private-label products, third-party administration agreements, joint ventures, and other multiple-company efforts that generate revenue.
Additionally, the October 2010 survey found that nearly nine of 10 stated that strategic alliances will become more important over the next three years. Respondents expect to be involved in strategic alliances in multiple insurance product lines.
The respondents are executives and professionals involved in the development, distribution or manufacturing of life, health, and benefits insurance products. A range of companies is represented in the survey, including carriers, distributors, third party administrators, and other related companies.
ICMG is the leading association devoted to fostering strategic alliances in the insurance and financial services marketplace.
Respondents also pointed to strategic alliances as representing a significant part of revenue. Of those participating in strategic alliances, 35 percent said strategic alliances generate more than 30 percent of their company’s or business unit’s revenue.
“Many in the industry have the intuition that strategic alliances are vitally important, and increasingly so every year,” said ICMG president Ted Williams, who is chief marketing officer and executive vice president of Security Life Insurance Company of America. “But this ICMG survey, while a sample, indicates that insurance strategic alliances are widespread.
“The ICMG survey also points out that there is good financial value in strategic alliances for the many insurance market participants that engage in them,” added Williams. Strategic alliances include distribution firms aligning with insurance product manufacturers, third-party administrators providing services to product manufacturers, and private-label products, among others.
Individual life insurance, group life, Medicare products, and individual dental and vision insurance were the products most cited by respondents for strategic alliances in the next three years. The top products, according to survey respondents, are:
Individual life insurance (cited by 52% of respondents)
Group life insurance (42%)
Medicare products (38%)
Individual dental and vision insurance (38%)
Individual medical (33%)
Individual cancer/critical illness insurance (33%)
Respondents expect to be active in numerous other product types, including: group medical, indemnity, individual and group disability, annuities, group cancer/critical illness insurance, final expense, property and casualty insurance, individual and group long-term care, final expense and non-insurance products (e.g., discount plans). Respondents also mentioned their interest in alliances for mortgage insurance, wellness programs dental plans, travel assistance, identity theft resolution, supplemental health, retiree medical, financial wellness, employee assistance plans, and accidental death and dismemberment.
For complete survey results, contact Audrey Wittenburg, ICMG executive director, at (703) 729-7701 or awittenburg@ICMG.org <mailto:awittenburg@ICMG.org> .
About ICMG: Inter-Company Marketing Group (www.ICMG.org <http://www.icmg.org/> ) is the premier nonprofit association that fosters strategic alliances between insurance and financial services companies, providing targeted networking opportunities, sharing of knowledge and experience, and resources for successful inter-company alliances. Among the 400 members are marketing and business development decision-makers with insurance carriers, distributors, third party administrators, and other related companies. Follow ICMG on Twitter (@ICMG) and find ICMG on LinkedIn.