GAMA President Challenges Industry
To Stop Rampant Replacement
Saying the life insurance industry is facing a crisis of its own making and needs to make changes if it is to survive, the 2003-4 president of GAMA International called on companies to stop paying new commissions on replacement business.
Speaking at the annual LAMP meeting sponsored by GAMA International, Michael R. White also said the industry must stop offering enhanced financing dollars to recruit agents away from their existing companies.
What Your Peers Are Reading
The crisis facing the business, said White, who is president of Virginia Asset Management, Richmond, Va., is caused by the practices of some in the industry of moving large books of business from company to company in hope of achieving short-term success but at the expense of long-term growth.
As for markets, White said too many insurance companies are looking to acquire business rather than build it. They are re-engineering products rather than innovating, he says.
Companies, White said, are trying to attract each others books of business, a practice that is destructive over the long term.
“If the industry is to thrive, it must position itself to develop new hall of famers,” White says. “We cant continue to tear each others agencies apart in a short-sighted attempt to grow our own businesses.”
To survive and succeed, life insurance professionals must have a calling, he said, but there has been a meltdown in support of new professionals entering the business.
“This is a clarion call,” he says. “We must take control of the industrys future.”