agents and advisors

Consumer (desire for customization as driver) + Innovation by manufacturer/distributor (seeking growth through differentiation) + Technological advances (as enabler)

In other words, the continual desire by customers for greater personalization (which continues to be a force today) intersecting with the innovations by the manufacturer (life insurer) and distributors (agents and advisors) in their attempt to gain competitive advantage gave rise to the changes which would lead to the demise (in Australia) of traditional products and distribution channels. These changes were only possible because of the technological advances of the day, which enabled the administration of these unbundled contracts. It is interesting to note that despite having common roots, the subsequent evolution of distribution has turned out differently in Australia from say her Asian neighbours. This may perhaps be attributed to differences in culture, which itself is often shaped by surrounding environmental factors and government regulation. ‘Buy term invest the rest’ did not take root in either the USA nor Asian markets, where more traditional products with their bundled savings elements have continued to dominate. Why is this so? A few possible reasons come to mind: • The lack of investment choices in Asian markets making the ‘buy term invest the rest’ unattractive as a proposition • The desire to ‘get something back’ hence the savings component which is probably a cultural aspect. We will look at the US story in its own section later in this paper.