It’s April Fools’ Day but this is no joke…
Last week’s post listed six takeaways from the A.M. Best “Review and Preview” conference. Here are six more bell-ringers that hit the target for fraternal life insurers…
Define the target – The theme of the conference was “innovation.” As you tackle innovation in your organization, you and your boards may end up wasting valuable time wandering in the wilderness because each of you may have a different definition of what the word means to you. The A.M. Best analysts defined it as “a multi-stage process that results in tangible and measurable improvements to products, processes, service and/or the overall business model.” Not a bad place to start. You can’t reach a common goal if you’re all running in different directions.
Make innovation part of your organization’s corporate culture by incorporating it into your mission statement – No, your society won’t be world class innovators overnight by doing this. But it will enforce to your board and your members that innovation is as much a part of who you are as your common bond.
Ripe for the picking – Why are there so many “Insurtech” start-ups? Simple: they see an opportunity to turn an antiquated business model upside down by redefining the products we offer and the way we distribute them to the next generation of consumers. An executive from Ladder, the on-line insurer, said it best: “Someone told us how you do business and we figured we could fix it.”
Innovation obstacles – According to an on-site poll of executives, the biggest potential obstacle to innovation in our industry is…regulation. And a regulator panel presentation made it clear that the simplified and streamlined underwriting practices that are driving much of the Insurtech innovators in the industry are on regulators’ radar screens. While regulators don’t want to inhibit innovation, they don’t want consumers paying the price years down the line through insolvencies, receiverships, and liquidations.
Opportunities for mutual and fraternals – Best’s reported that stock companies are leaving the life insurance sector due to “low returns.” That opens the door for mutual and fraternal insurers, whose primary interest is serving their members (and in the case of fraternals Building Better Communities) rather than reporting quarterly profits to Wall Street.
DTC Train is Rolling – The “Direct to Consumer” (DTC) train seems to be an unstoppable force in all segments of the industry. Some key quotes on the topic:
Insurers need kitchen table and digital storefront skills. These must work in tandem and shouldn’t be considered mutually exclusive.
The industry has outsourced its brand to its agents for years. DTC is a way for us to recapture it.
Millennials don’t want to do it on their own, they want to do it their own way. And that can take various forms. We must be ready to meet their needs on many platforms.
These topics – and many more – will be covered at the Alliance’s Spring Symposium, May 28-30 in Chicago. If you haven’t already registered, click here to do so and join hundreds of your colleagues for the biggest and best fraternal education and networking conference in the business.