Has the life insurance business changed fundamentally over the 20 years since Serge Therrien founded “The Insurance and Investment Journal” in 1996 or, are we just kidding ourselves?
It’s easy to say that the life insurance agent world is entirely different than it was in 1996. Technology, demographics, big data regulation, taxation and family lifestyles have a major impact on life today. The world does look a great deal different than it did 20 years ago.
But, does this observation permit us to flaunt fundamentals and abandon success formulae that provided many generations of consumers with lifestyle security and legacy guarantees that supports today’s world? The important question for the industry and its regulators is whether our impression of change is window dressing or a sign of fundamental business change over a generation?
A closer look, informed by a broad, historical perspective, can make you think twice. With a better understanding, we can work more effectively, helpfully and profitably. We can also appreciate the unique value that true, professional, life insurance agents provide to consumers and why those ideas need to be preserved and propagated.
The need has not diminished
Sure, few advisors still hold themselves out as “Life Insurance Agents” anymore (ironically, except some of the most successful ones), despite licensing regulations often requiring it. But, the need for life insurance has not diminished in 20 years. In fact, with increasing incomes, lifestyle expectations and historically low interest rates, the actual need for life insurance protection has soared. People need to protect their families, business and financial independence more than ever. Still, the US Department of Labor reports a $16 trillion life insurance gap for Americans. That’s the difference between what they calculate consumers should have and what they do have. That means at least a $1.6 trillion gap for Canadians. We still need agents to help consumers pick their way through the increasing complexity that confounds even professionals and prevents protection.
People may be more technologically savvy and equipped but they are still the same behind the keyboard. They have the same aspirations, dreams and fears. Personal contact may be filtered through technology but personal contact is still king. What else is social media? Personal relationships still rule most decisions keeping agents squarely in focus. Face to face is still the best way to help people. Especially with life insurance.
People still need to be sold on life insurance and other life insurance products because they go to the heart of our greatest fears – death and disability. Technology gives access to simple product with limited value but “life insurance programming” takes insight and expertise not effectively delivered by “robos”. That takes relationship, caring and intuition. For the record, personifying a spreadsheet and formula with a name like “robo-advisor” does not mean that there are, or will ever be, little “Insurance C3POs” flying over to your house to help you with your estate. Robos are just spreadsheets people… created by folks who likely never sold much or any insurance either. Do people truly want to trust their family or business to something that Wiki-leaks can hack?
Perhaps you think that compliance has added a whole new level of complexity to the agent role and that’s how life is different. Sorry to burst your bubble. The only real difference today is that independent advisors now have the responsibility career companies used to bear for them. They’ve exchanged a compliance umbrella for bonus money. Veteran agents will remember locked gates to new business processing, locked file cabinets and office doors to protect client confidentiality. Prohibition of copying non-medicals. Internal Audit departments sanctioning agents. Money laundering concerns, if, for different reasons. Agent title concerns. “Licensed with Your Career Company” on agent cards and stationery. Today’s rules are similar except they burden the agent more directly. Compliance requirements are directly related to the level of agent independence. Compliance management is the price of independence.
In a world of Four Pillars – Banks, Stockbrokers, Trusts and Insurers, financial practitioners were specialists by default. There wasn’t much cross over from pillar to pillar. That made advice more focused and advisors more competent… like what’s expected today. The toppling of the pillars was supposed provide better service and better advisors. That conclusion is arguable. Today’s compliance regime suggests that a return to specialty is a way to improve consumer advice and protect advisors. We are returning from a “Dr. of All the Ologies” approach to picking a pillar and working together to build strong financial supports for consumers.
While business tools are amazingly different than they were in 1977 when I first walked into an agency, they remain tools, not advisors no managers. Productivity and prospecting are still huge agent concerns despite all the productivity and prospecting tools and technology at our disposal. Business fundamentals remain the same even if the tools are different. What remains pivotal is the advisor capacity and interest to use the tool, whether the cold call or LinkedIn. Human nature remains.
Some things are different: How advisors contact clients. How advisors see clients – Skype? How advisors engage clients. How we track and service clients with software. Underwriting and new business processing is different too and will continue to evolve. But this is all window dressing.
Moses Springer rode on horseback around Ontario to sell 500 policies so The Ontario Mutual Life Assurance Company, now, through Mutual Life and Clarica, Sun Life in 1871 could get its charter. We don’t use horses today but getting and getting to clients remains a staple of the business. Different but the same.
What hasn’t changed is the heart of the business. Personal relationships are still vital to helping people. And when you help more you sell more. Prospecting and connecting with people is still critical because people don’t line up for a product that reminds them they can get sick and die. They need help.
The “What” and the “How”
The “What” in the business is the same. It’s the “How” that’s different. You hold the match so ignite your how. Agents will continue to provide the extraordinary value consumers still need, despite all the scenery changes.
The maxim is true for this business, “The more things change, the more they stay the same.”
And, for those who wonder, I’m not a luddite. I see the obvious. But, I also see that despite all the appearance and tool changes, the fundamentals of the business remain the same and strong. That means we will still be talking about agents when Serge and I toast the 40th anniversary of the magazine.