11-Group Task Force Deals
With Threats To Industry
In what is being called an unprecedented show of unity, 11 industry groups have formed a Task Force for the Future to identify ways of solving the major challenges facing the life insurance industry.
Charles A. Smith, chairman of GAMA International, says the task force will focus on the 2 major threats to the life insurance industry–the shrinking pool of agents and the underserved middle market.
Smith spoke during a press briefing at GAMA Internationals annual LAMP meeting. “We think this is the first time in the history of the industry that all the groups came together to address the problems that face the industry.”
The task force, he said, will identify what is responsible for the current state of the industry and what the industry can do about it. “There is real reason for hope,” Smith said.
The task force, he says, already has appointed a working group to study the issues and present a matrix of options. The goal, Smith said, is to have a “white paper” developed by August.
Michael R. White, president of Virginia Asset Management, Richmond, Va., and 2003-4 president of GAMA, says there is plenty of income available in the middle market.
It is a volume business and agents must serve more customers, he said, but there are plenty of opportunities to grow. Moreover, he added, almost all the successful life insurance agents started in the middle market.
Asked about predictions in the late 1970s that life insurance agents would no longer serve the middle market because the premiums would not be large enough to justify expenses, Smith noted that these predictions were based on a certain business model. Companies that operate on that business model probably cannot serve the middle market, Smith said, but there are other models.
There is strong evidence, he said, that the things the industry took for granted 20 years ago are not true, and he believes there is a great opportunity to serve the middle market.
That is what the task force will address, Smith said, and the short-term goal is to produce a document the industry cant ignore.
The groups involved in the task force are the American Council of Life Insurers, the Association for Advanced Life Underwriting, the Association of Health Insurance Agents, the Life Insurance Marketing and Research Association, the American College, the Life and Health Insurance Foundation for Education, GAMA, the National Association of Insurance and Financial Advisors, the National Association of Independent Life Brokerage Agencies, the Million Dollar Round Table and the Society of Financial Service Professionals.
Reproduced from National Underwriter Life & Health/Financial Services Edition, March 25, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.