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It's Time To Offer The Mid-Market Simpler Life Products: Thresher

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“We need to get the sales momentum back,” says Nationwide Financial President and Chief Operating Officer Mark R. Thresher.

He is referring to sales of life insurance, particularly sales to the mid-market.

In many cases, the Columbus, Ohio-based executive told National Underwriter in a telephone interview, the mid-market is not even being talked to about life insurance. The agents somehow “didn’t get around to it,” he says.

His view is that the industry needs to make its products simpler and more transparent. Life insurance needs to be easy for the producer to sell and easy for the customer to buy, he says.

This year, Thresher has been taking that message around the country, delivering it, for example, at the April 2007 Life Insurance Conference in Atlanta, which was co-sponsored by LOMA, Atlanta; LIMRA International, Windsor, Conn.; the Society of Actuaries, Schaumburg, Ill.; and American Council of Life Insurers, Washington.

In the April presentation, he showed a chart, drawn from LIMRA’s 2004 Ownership Study, that displayed how life insurance ownership among all households had declined to 78% in 2004, from 83% in both 1960 and 1976.

In that same period, individual sales had risen, but group sales had declined.

At various industry gatherings, there has been a lot of discussion about how to increase sales, especially to the mid-market, Thresher says. However, he says he has concluded there has been more discussion in this area than action.

To serve the market profitably, firms need to develop “mass-customized solutions, supported by low-cost distribution,” he maintains. That includes use of technology-based solution platforms, he says, stressing that he means agent- and consumer-friendly platforms.

His own company is walking the walk: He says it is using a web-based system, called Nationwide Appvantage, that streamlines both sales and underwriting. Two new contracts–a term policy and a whole life policy–are using that system, and policies can be issued in as little as 10 minutes, the company says.

Some contracts the company offers are instant issue, without underwriting, up to face amounts of $100,000, he says. The system requires answers to only a few questions, he explains.

“We want to make it as easy as possible to issue policies,” he stresses.

This approach was designed with property-casualty agents and worksite reps in mind, he indicates.

Some p-c agents in today’s market don’t focus on any financial services at all, he observes. Others, meanwhile, say that if they cross-sell anything, their retention goes up and they are meeting a customer need. In both cases, a simple and easy life sales system should help, he suggests.

By segments, Thresher continues, the company distributes through 2 channels: registered reps/planners and non-registered agents. Significantly, “both segments say they want things [involving life insurance sales] to be easier. They say, ‘If it’s too difficult, I won’t deal with it.’”

This understanding helped fuel the company’s decision to leverage its mid-market base and its distribution channels for simplified life sales.

At the Life Insurance Conference, Thresher reiterated his “easy” point: Insurers can achieve scale advantages through simpler products and transparent pricing.


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