Innovation, Community and Timelessness

For background, fraternal benefit societies are organizations of people who usually share a common ethnic, religious or vocational affiliation and may provide insurance to its members, primarily life insurance. While this model dates back hundreds of years, the dustiness doesn’t come just from age. For starters, the practices and language used by these societies can conjure up outdated or inaccurate images because connotations of words and phrases change over time. More important, for some, there is a decline or weakening of the common bond that drew the group together in the first place, requiring it to be updated.

2. Why is it inspiring?

The insurance industry provides a valuable utility to the public, yet consumers today have a negative impression of the industry. Recent developments in health care don’t help that impression. Fraternals are a special kind of insurance organization that is required to give profits back to their communities; thereby, done right, they shift the focus naturally from what they offer to why they offer it.

3. What do they want to accomplish?

The American Fraternal Alliance members want to reposition the fraternal model into the modern day and help more consumers understand it. However, it’s not an exercise of logos and fonts or sexy models selling something. It’s about finding and extracting what’s timeless and then communicating that in the right way.

4. How did they start?

This group started with a small investment, to determine if there was an opportunity in the first place. What was found was very encouraging. While the awareness levels in the market were quite low as a starting point, when consumers intending to buy life insurance in the next two years were provided a simple description of a fraternal, the overall impression was very positive. Then, by describing them in a new way, overall positive impression went up by another 23 percentage points. Further, the interest level in buying from a fraternal was 70% when they were exposed to a new positioning message.

This is further validated by signals in the market. We see younger consumers favoring brands that give back to communities all around the world. In addition, the disruptors in insurance are leveraging new definitions of community as a selling point for peer-to-peer models.

That’s not to say there isn’t a lot of work still to be done. However, the innovation lesson here for the life insurance industry may be that community is timeless and modernizing it may mean more to the future of insurance than modernizing insurance itself. Extracting what community really means and working hard to deliver on that value is what will ultimately move the needle in a meaningful way. Fraternals, dustiness aside, are in a great position to do that.

Maria Ferrante-Schepis is executive vice president and managing principal of Insurance and Financial Services Innovation at Maddock Douglas, an internationally recognized innovation consulting firm. She is co-author of the book “Flirting With the Uninterested — Innovating in a ‘Sold, Not Bought’ Category.” She can be reached at [email protected]

— Read Priorities for Innovation, Automation and Transformation on ThinkAdvisor.