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Life Health > Life Insurance

Always Be Closing

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I know it’s an old saw, but I can’t think of insurance sales without thinking of Alec Baldwin’s immortal sales meeting scene from Glengarry, Glen Ross, which might just be one of the bleakest portrayals of a life in sales as ever hit the silver screen. I thought of this scene, perhaps a bit morbidly, right before a neighbor of mine and I took our sons around the neighborhood to sell tickets for their upcoming Cub Scout car wash. My son is a natural at this, and utterly fearless, so he just charges in and makes the most genuine, heartfelt pitch you ever saw. The fact that he looks great in a Scout uniform and is hitting a neighborhood of old-school Scouting enthusiasts helps to take the edge off. But still, as my son and his friend went door to door, my neighbor remarked to me how courageous she thought they were. Selling something cold? Something she could never do.

The brutality of Glengarry, Glen Ross and the innocent ethic of the Scouts are on the opposite ends of the sales spectrum, but they both underscore the same fundamental truth: whether you’re trying to meet a tyrannical quote or just drum up some cash for your next Pack camping trip, sales is a tough business.

So when I come across industry sales statistics, especially for things like individual life, I tend to brace for impact. Last year, LIMRA published what are now infamous figures on how individual life had hit its lowest levels since World War II, and anecdotally, I hear from our readers that life sales simply are not what they used to be. One look at industry data proves it, too. According to the Insurance Information Institute last year, total revenue for the life/health industry was between 50% and 60% annuities, around 30% life and around 20% health. And those numbers are continuing to skew toward annuities, especially as exchanges drive more health agents out of business.

However, it’s not all bad news for everybody. I received from New York Life just yesterday a notice that the company was the largest seller of new life insurance for 1Q 2011, increasing its market share to just over 12%. The real success story here is in their individual life area, where they increased sales by a whopping 24%. While my first thought upon reading this was “I’ll have whatever they’re having for breakfast,” the real reason, I suspect that the real for reason for this success is New York Life’s dedication to recruiting, training and retaining its own agents, something that Mark Pfaff, executive vice president in charge of U.S. Life and Agency Operations, is very passionate about. I met with him shortly after coming to National Underwriter last year, and he was completely serious when he said that he felt a wholesale return to the captive agency sales force was the best hope for the industry’s individual life sales. I did not doubt him them, and I definitely don’t now. The proof, as the say, is in the pudding. Lest any doubt remain, consider this: for as long as LIMRA has been keeping records on market share, no single life insurer has ever held more than a 10% market share until now. Pretty impressive.

Speaking of LIMRA, they have also issued a recent release that mentions how new premium sales of individual life combination products (namely UL combination products with an LTCi component) went up some 62% in 2010, to $1.2 billion. As impressive as this is, it is not that surprising, however. Combination life products have been touted as the Next Big Thing (TM) in this industry for well before I showed up in it, and it would seem that LIMRA’s numbers bear this out, too. It makes sense, especially since it takes a product with pretty clear intrinsic value — long-term care insurance — that has never quite found its market, and pairs it with something more saleable. It makes me wonder, as I have read and heard so often that tomorrow’s successful agents will be those who blend their practices into a more Swiss Army knife-like financial planning service, so too might tomorrow’s most successful insurance products be those that can fit more than one need at once. We shall see.

Here’s that clip from Glengarry, Glen Ross, by the way. Just make sure to listen to it on headphones, in case you’re not familiar with it, as it’s one of the most profane scenes in movie history, barring any given five minutes out of Pulp Fiction. if you don’t like coarse language, steer clear. Otherwise, enjoy Alec Baldwin at his finest.


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