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The Searchers…

April 11, 2016
In addition to being the title of my all-time favorite John Ford/John Wayne western, “The Searchers” could have easily been the theme for last week’s Life Insurance Marketing and Research Association (LIMRA) conference. Hundreds of life insurance industry executives (including a handful of Alliance members) from a variety of disciplines – senior management, marketing and communications, underwriting, actuarial – gathered in Las Vegas to answer one overarching question: how can we grow our businesses profitably at a time when the percentage of consumers purchasing our products is at an historic low? 100yr_Banner_LIMRA_HomePG There were general sessions and workshops devoted to advancements in technology, development of simplified issue products, efforts to enhance customer experience, and compliance with an increasingly more complex regulatory environment. One session on distribution particularly intrigued me. Executives from two of the nation’s largest life insurers proclaimed they were “all in” on a distribution system almost entirely reliant on agents (either captive/career or independent). Yet, when asked about the need for an omni-channel distribution system (one that allows consumers to access the company from multiple ports, including on-line, telephone, iPhone applications, and agents) by an inquisitive trade association executive, both admitted – a bit sheepishly, I might add – that their companies were investing heavily in alternatives to the traditional “insurance is sold by an agent not bought by a consumer” marketing method. omnichannels We heard plenty of facts and figures about an aging agency force and an aging consumer base (yes, commercial companies are just as worried about this as fraternals are), and some very interesting research on the views of millennials. One of the most fascinating – and incongruous – was that a large percentage of younger consumers would prefer to receive financial advice from a professional, yet they don’t trust insurance agents because “they try to sell you things you don’t need.” (That attitude may be directly related to the Department of Labor’s new fiduciary standard.) Of course, the bigger question is how any insurer meets the needs of this new – and absolutely massive – generation of potential insurance buyers who want to speak to an agent, but are likely to buy lower cost products (at least initially) that make it economically impossible for a traditional commission-based agency force to serve them. The winner is going to be the company that figures out this conundrum in a way provides new consumers unbiased advice in a cost effective manner. And there is no reason that fraternals should not be at the forefront of the solution. Several comments from fraternal executives attending the meeting resonated with me. Among them:
  • “This is my first time at one of these meetings and I didn’t realize how small we really are. We’ve got to figure out how to use this as an advantage, with both agents and prospective members.”
  • “Our society – and fraternals in general – have got to make a big investment in improving our technology platform. It’s almost impossible for small societies to do this individually; so we’ve got to find a way for societies to work cooperatively so we can share the cost of building a system that works for multiple fraternals.”
  • “This is a very good conference. Almost as good as the Alliance’s.”
  • “The companies here have many more resources than we do. But we have a clearly defined set of values that appeal to a very specific sub-set of consumers. By communicating our messages to those individuals, we can attract new members, grow our business profitably, and do more good works in the communities we serve.”
For me, the bottom line is that while they may be late to the party, the vast majority of the “next generation” are going to be life insurance, disability, and annuity purchasers sometime in the near future. The question is, who are they going to purchase from? Fraternal leaders – executives, managers, local chapter leaders, and boards of directors – who are curious about why their society exists and what needs to happen to sustain it; courageous in their willingness to experiment with tradition-defying strategies; and resourceful enough to solve complex problems in unorthodox ways with limited resources will not only grow their organization, but will lift the entire fraternal system with them.