To kick off the annual NAILBA 33 conference in Hollywood, Florida this year, a panel of industry experts joined together to discuss the changing landscape of the insurance industry, including evolvement of technology, changing consumer behavior and the new generation of brokers and agents.
Speaking on those matters were:
- Garth Garlock from North American Company for Life and Health Insurance
- Jim Kerley of LIMRA
- Melinda Meyer from ValMark Securities, Inc.
- Kent Sluyter with Prudential
- Michael Tessler from Brokerage Unlimited, Inc.
- Gene Koster of DCG Corporation (moderator for the panel)
Koster: Ok Jim, there is a lot going on right now, between consumers, buyers and general agents. Can you start us off with some of your thoughts on the matters?
Kerley: We are talking about two important factors in our business: families and needs. There are 70 million households in the U.S. that are underinsured. Life sales are down 1 percent — we just announced 3rd quarter results. Thankfully, the independent channel was the largest writer of life insurance measured by premium in 2013.
All of that said, there are two or three factors that we ought to consider as we think about this channel — maybe warning signs. First, buyers can buy life insurance pretty much anywhere today. The studies we do at LIMRA show they want to buy in different ways. Still, 60 percent say they want to work with a professional to get the recommendations they need. Your role is critically important in what you do.
Second, the agent population is getting older and we’re not bringing in new agents.
Third, there is a huge opportunity to garner more business. It’s just too big to ignore. Our research tells us that, on average, about 39 percent of brokers place 1 policy per year. There’s a huge growth opportunity to get more business.
Further, 41 percent of the advisors working with us today are over the age of 60. We need to replace the machinery that drives our production — that is the advisor and the agent. We need to do it for the future generation.
Another point, there are 600 million individuals nationwide that earn more than $100,000 a year. Those people seek advice from family and friends more so than advisors. There’s a huge market opportunity out there for that as well.
The question is, what is your role in the future? What’s your value add? Now is the time to face the issues and get change going.
Koster: A lot of info there — not all new — but is seems some pictures are becoming a bit clearer.
Tessler: When you first listen to that data, you can go one of two directions. You can ask where the bar is because it was pretty depressing. On the other side, you can say, there’s a huge, huge opportunity here. The question is, how will we seize that opportunity? In the past there’s been an awful lot of entrepreneurial spirit in the room. But you can’t help but look at this and say, this is such a global situation. Maybe it’s time we start to consider that maybe there’s a different way to deliver what we deliver.
Maybe it’s time to shake up the whole system and approach it differently from ways we’ve done in the past.
Sluyter: I truly do believe we are at a point in this industry where we have the opportunity and the need. Distribution is NOT the issue. Yes, we need to grow it, but it’s not the fundamental problem. If we fix the relevance issue, the distribution will come.
Kerley: The retirement industry has done a great job of getting the message out. Where do our products for retirement fit into our message?
Garlock: I think back to the early 80s and in that time, NAILBA was in its infancy and the brokerage business just seized the opportunity in the business where we could facilitate sales that weren’t going to the primary carriers at that time. I just sense that we’re at that kind of a crossroads right now. I think it’s time that we spent more energy towards CREATING the sale. Our job is to create business, not wait and hope that business comes our way. That’s the beauty of our business. I think this organization in particular is uniquely positioned to seize the high ground. Now’s the time.
Meyer: There’s also diversity — we have many generations we are serving. We need to be more aware of what’s relevant to each type of consumer. What certain semantics should we use for certain situations? Maddock Douglas and LIMRA did a study on just that. All of us in the room have to educate ourselves a little better. It’s so important for us to be relevant and address each age group. We can’t sell the same way to the same people all the time.
Sluyter: We need to come together with some deep strategic partnerships to drive this forward in terms of centralized investments. We have to think differently around investments.
Koster: It used to be, you’ve got your independent distribution coming in and everything works, but now, as Melinda says, you’ve got to market to various consumers. Let’s touch on market – the middle market.
Garlock: One of the things I think is that everyone should read “To Sell is Human” by Daniel Pink. In there, the basic premise of the book is that selling has changed. We used to use “ABC” to mean “Always Be Closing.” The author takes that and, as consumers have changed, there becomes information parody. The consumer comes prepared with information now. The “ABC” has changed to “Attunement, Buoyancy and Clarity.” The attunement is understanding the other side and being in service to that client. At the end of the day, if we can adjust to the new era of consumers, that is the point where our knowledge and expertise intersects with them so we can help guide them.
Kerley: The philosophy is great. The Maddock Douglas and LIMRA study focus on, among other things, the idea of collaboration. We’re collaborating with commercial organizations to help spread the word. The agent is still the center of the focus for the right markets. But some want to buy at the worksite. But the agent is still important to our business. Our ability to embrace what the consumer wants and to build up new models instead of protecting old models is the key to our success.
Tessler: There’s no way the consumer would say, “Oh, let’s devise the most complicated product and buy it from a guy who can’t explain it to me, that involves an accountant and an attorney and an actuarial person.” There is no way Mr. Consumer woke up one morning and said, “Give me that, give me a product that is so unforgiving that if I pay my premium 15 minutes late, it completely deteriorates the product.”
We have to listen to these people and figure out how to develop what they’re actually looking for.
This isn’t working that well, it’s time to change.
Sluyter: We talk about the middle market being a challenge and I think that’s true, but, like Michael said, the consumers are demanding simplification. And that is not what we’re offering today. We can solve that.
Kerley: You can be informed but you still may not understand. Advisors help you understand.
Meyer: Maybe we give control to the consumer and try to not sell anything. At our company, we’ve changed from a sales-oriented firm to a coaching and advising firm. We want to help the client get to the answer. We’ve seen an uptick in our sales of over 30 percent. It’s doing the same thing, just in a different way.