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Let me see if Ive got this right:

As a population, the people in the United States are enjoying greater longevity.

As participants in the technology revolution, many people here can now do all kinds of things quicker, better and cheaperfrom personal communications through building major projects.

And, as the U.S. moves out of recession and war, many citizens are trying to learn exactly how to live longer; do things better, faster and cheaper; and adjust to slowly recovering financials and new economic/international challenges.

This can be a baffling exercise. Some organizational-level adjustments already have occurred (e.g., corporate belt-tightening, implementing Sarbanes-Oxley, etc.). But the impact on everyday life is making itself felt in various and surprising ways.

For instance, one friend told me her bank now charges for transactions at the teller windowsomething that “always” had been a free service. Social Security recipients still go there on first Mondays, she says, but younger folk are “out of there.” So, the living-longer crowd is paying the freight on the banks “expense adjustment.”

A very elderly man recently told me that a new medical office he had visited asked him to sign a statement swearing that hethe elderly patientis not engaged in criminal activities. He figured this was a reflection of national security concerns, but he was taken aback all the same.

Speaking of medical, the April 27, 2004, Executive Order 13335 signed by President Bush put in motion plans to develop a national health-data system that will allow electronic sharing of patients personal health information. The U.S Department of Health and Human Services is already setting up a panel to cost this out. The better-faster-cheaper camp loves the idea but privacy advocates dont.

Where do life and health insurance products fit into any or all of this? After reviewing the current scene, Ive concluded that some “fits” are emerging, but there is room to grow.

Living Longer. Here is where the fit is most evident. Annuity companies, and now life insurers, have been devising all sorts of product features that aim to keep step with those who live many years, even beyond age 100. These developments have been subjects of many previous articles, so Ill just reference a few examples here.

Some examples include the innovations in income annuities that are starting to pop upmore liquidity, guarantees on minimum payouts, etc.and extended maturity features in universal life policies, and now also variable universal life. Increasingly, marketers are coming out with strategies and programs that help guide clients on what products to draw on first for income plans and also how much to take.

(Not insignificantly, “stochastic modeling” is slowly becoming a word that most everyone in the industry can pronounceand understand!)

The “room to grow” part of this development has to do with those old friends, training and education. The industry needs to ramp up here, so financial advisors all across the country can learn about the newer products and strategies. Right now, availability of such programs is uneven.

That is easier said than done, of course, because many advisors are now “independent”not “career”and so do not always have access to company-provided education programs. This suggests that the industrys third-party providers will need to fill the void, and some are doing so.

Technology. The better-faster-cheaper folks have plenty of new toys out there for advisors and consumers to use. But not everyone on Main Street owns the toys or software to benefit from the innovations.

Also, although access to high-speed bandwidth (via DSL or cable) is increasing and the costs are dropping, many people are still on dial-up and have no plans to change anytime soon. (A good number of hold-backs tell me their chief reason is worry about security/privacy issues.)

Ergo, kudos to those providing online data entry, streamlined back-end systems, and other initiatives that enable customers to do the better-faster-cheaper thing. But, remember to provide paper alternatives for the non-techies, no-graphics options for people still on dial-up, and strong incentives and protections for those wanting to sample your new Web-based policy services but who fear intrusive outcomes.

Learning how to adjust to the changes. This is a tough one. In the name of cost control, privacy, or new risk exposuresoften brought about by the trends listed aboveyour firm may institute practices that rankle customers. Benefit cutbacks, post-issue rate increases, and extensive disclosure and sign-off forms are common examples.

If you move in that direction, why not do so in a way that provides consumers with viable alternatives and/or incentives? Some firms do offer value-added options when making such changes but many dont. How about instituting a loyalty program or perhaps an online demo of something? Provide something meaningful at the same time.

Consumer surveys show people are struggling with many shifts that are occurring. This suggests that if industry players have any “consumer-centric” products, programs or processes on tap, this might be a good time to roll them out.


Reproduced from National Underwriter Edition, July 29, 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.