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Life Health > Life Insurance

Dearth of a Salesman

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I recently got to watch a tremendous documentary entitled Salesman, from 1969. I read about it on a film blog as one of those films every cinemaphile ought to see, and for a long time, I had the most difficulty tracking it down. How grateful I was, then, to see that you can currently watch the movie for free on Hulu.

Salesman is a really important movie because it was one of the first true examples of what they call cinema verite, or direct cinema. Prior to this, documentaries always had that “voice of God” narration because camera equipment just did not have the sound synching that we take for granted today. By the late 60s, though film sound gear got small enough that a two-man filming crew could be anywhere with their cameras and film as if they were flies on the wall. From this simple tech innovation, the modern documentary was born. And one of its first children was Salesman, a film that a number of critics consider one of the best American films ever made, and in 1992, was selected by the Library of Congress for preservation in the United States National Film Registry as having particular cultural, historic or aesthetic significance.  It is easy to see why.

If you have not seen this movie, it’s really compelling stuff. The film follows a team of four Boston-based bible salesmen as they pitch a fairly overpriced product door-to-door. it is the kind of mirthless grind that makes Glengarry Glen Ross seem like a sitcom in comparison. And it is also an interesting look into a bygone age when the notion of work ethic was much different than it is today. One gets the feeling that these guys, who probably all served in WWII, simply took that militaristic mindset from their war days and applied it to work. The job was the job, and they had to get ti done, whatever the cost. Add to it a commissions-only gig with zero meaningful support from the home office, hard sells to people who don’t really need (or can afford) your product, and long stretches away from home and you suddenly see how bleak this kind of life can be.

For a lot of people today, Salesman would be the grim underbelly of the age already romanticized by the hit show Mad Men. But more importantly, it offers a glimpse into the business of selling that has formed our modern disdain of being sold to. Bible salesmen were always on the fringe of door-to-door selling, so perhaps they never quite reached the cliche status that encyclopedia salesmen achieved. But even that has nothing on the cliche of the door-to-door insurance salesman, which has become a metaphor for “sales transaction you really want no part of.”

One of the first things I learned when I joined National Underwriter, and having come over to cover the life & health world from the property & casualty world is this: P&C insurance is bought. L&H insurance is sold. It sounds like a little thing, but boy, it sure isn’t. Life and health insurance is no less important a product to securing people’s long-term well-being as any other kind of insurance. In fact, it is probably quite a bit more important. And somehow, the process of actually buying these things is still seen as a necessary evil. The people who sell it are seen as intrusions.

Not everybody thinks this way, of course. There are millions of satisfied L&H customers all over the world who get the product and get why they need it and are appreciative that they have somebody they trust who can sell it to them. But for those to whom insurance remains arcane, or who already have some mistrust of the business (the unfolding investigations into claims payments is sure to exacerbate that), or who simply can’t extrapolate their needs enough to understand why life and health insurance is so important, to be sold to on this front is a most unwelcome thing.

This is just one of the things that makes selling L&H a really tough job, and I have a great deal of admiration for those who do it. It is not easy work. But it is important work. And it is why, as a point of editorial interest, I am so intrigued/concerned with what appears to be a coming shortage of professionals in the distribution channel.

On more than a few occasions, I have had the opportunity to speak with sales directors and executives for major insurers, as well as more middle- and low-level people, and the news I get is always the same. There just are not as many people selling life and health as there used to be. And those who are selling it can no longer expect to do well specializing in single products; they must hybridize themselves and become more holistic providers for one’s financial needs. Those who have already made this change are currently enjoying a competitive advantage. Those who have not, might be living on borrowed time.

But more importantly, the average age of the L&H agent is increasing in step with the Baby Boom. As the first Boomer turned 65 this year, we are going to see the beginning of all of the Boomer-era sales pros transition out of the business, whether it’s because of age or because of changing market conditions (especially regulation-driven things such as health care exchanges, medical loss ratios and the broker-dealer fiduciary standard). This change has synched with the industry’s general trend away from training affiliated sales forces and relying on independent sales forces.

But according to a new publication put forth by LIMRA – Increasing Sales Capacity – that might be starting to change. For starters, it notes that overall, the actual level in sales force across the industry hasn’t really changed in the last 10 years, as carriers have focused on improving efficiency over increasing the number of actual sales people. At long last, however, it might be time for all of that to change. LIMRA points out that efficiencies have hit their limit for the time being, and the more sustainable avenue to growing sales is to grow sales forces. Which might be why, for the first time in some 20 years, the levels of affiliated sales personnel (i.e., recruited by, trained by and dedicated to a single carrier) is rising above that of independent sales personnel. At least part of this can be chalked up to heavy recruitment drives — especially in the mutual world — of young sales professionals as part of an effort to recharge the distribution channel. (Recruiting fresh talent also gives the industry a leg up on how to make use of things like social media, which is a plus.)

If you can, definitely check out Increasing Sales Capacity – which is a members-only publication. If you are not a member of LIMRA, you might want to consider it. These folks put out some of the best research in the business, and if you are interested in where sales trends in this industry are heading (and ought to head), then I think you’ll find this report to be pretty helpful.

After all, life and health sales is a good business. It is something to be proud of. And it certainly doesn’t have to be the kind of life sentence that the poor fellas in Salesman are living out. But as the production notes to that movie attest, the company these guys all slaved for folded shortly after the movie wrapped production. These guys were using unsustainable methods to prop up an unsustainable business. Life and health, on the other hand, can be super-sustainable. It just needs to never stop fine-tuning how it sells.


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