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October 04, 2009 at 08:00 PM
Following President Obama’s recent address to the joint session of Congress, I listened to several analyses on three different TV channels. One segment was of particular interest to people in the insurance business. This was an exchange between Sean Hannity and focus group expert Frank Luntz. I will have to paraphrase their comments because I was unable to write down their exact words. Hannity asked Luntz about the President demonizing insurance companies and laying much of the blame for health care problems on them. Luntz replied that he may have succeeded in that part of his speech because the public does not like insurance companies.
As I listened to this my mind wandered back to the fall of 1992. At that time, American Council of Life Insurers’ research indicated that public opinion of life insurance, its products and agents, was moving to an all-time low. Favorable attitudes towards agents in 1975 were 59% and were projected to fall to 24%. Likewise, insurance products in 1975 were at 64% and projected to fall to 23%. The research also revealed that the necessity of owning life insurance in the minds of the public over a similar period would drop from 68% to 36%.
Independent research at the same time corroborated these findings. One marketing researcher went on to say that even when people agreed insurance was necessary, they could not articulate exactly why. This, according to the researcher, made the industry “precarious.”
None of this was news to the people in the field selling insurance. They were battling these attitudes on a daily basis and were well aware of th problems and the need to take action to reverse these trends.
The concern of the field force came to a head at an annual meeting of the joint executive committees of the field organizations. These groups were unanimous in their belief that by virtue of their members’ face-to-face contact with the public, they represented an early warning detection network and that it was urgent that their concerns be conveyed to the company organization.
Pursuant to that request, the National Association of Life Underwriters (now the National Association of Insurance and Financial Advisors) prepared a report to be presented to the board of the ACLI titled, “Remember Pearl Harbor–A Study in Unpreparedness.” The report drew a parallel between the lack of military preparedness of the U.S. prior to World War II and the lack of preparedness of the insurance business to respond to its critics.
The report contained the following letter: “Each August the executive committees of all the field organizations meet to discuss current issues of mutual concern. For the past three years this group has been expressing alarm over the deterioration of the public’s attitude toward our business and its products. Indicia of this deterioration is painfully obvious and troublesome not only in the marketplace, but in the legislative arena as well. Our perception is that the drop is steady and pervasive.
“NALU is making a presentation to you in the hope that a strategy for reversing this trend can be developed. Please know that all of us join in this appeal and hope that you will give this issue your highest priority.”
