Tag Archives: limra

Social Media: Your Top Referral Source

Insurance agents and financial advisers who don’t have a strong social media presence could be missing out on a lot of potential business, according to a new study conducted jointly by Life Happens and LIMRA. The study found:

  • More than a third of Americans (34%) — and more than half of millennials (54%) — are likely to ask for recommendations for an insurance agent or financial adviser on social media.
  • 54% of millennials and 44% of Gen Xers are likely to check an agent’s or adviser’s social-media presence on sites such as Facebook, Twitter and LinkedIn.

“This year’s study reinforces the increasingly important role that social media has on an adviser’s marketing efforts,” said Marvin Feldman, CLU, ChFC, RFC, president and CEO of Life Happens. “Advisers and agents must ensure their profiles are regularly updated and provide consumers with quality content and information.”

At the same time, the study found, most consumers still desire a personal connection with a professional when buying insurance. Millennials are the most likely to want to meet with a financial professional before purchasing life insurance (73%), compared with Gen X (64%) and Boomers (69%).

How should we respond to these findings?

Below are three ways for insurance and financial services firms and their agents and advisers to make the most of these findings.

  • Invest in social media and mobile marketing (especially advertising). With so many consumers turning to social media to evaluate financial products and professionals, it is critical that agents and advisers have an active social media presence. And, with recent changes Facebook made to its News Feed algorithm making it harder for businesses to get into consumers’ News Feeds organically, it’s more important than ever to invest in ads.
  • Take a multi-channel approach. Consumers want to take advantage of both personal networks and professional help, online research and in-person guidance. Agents and advisers must present an “always-on” persona as consumers utilize a multi-channel approach to researching and buying insurance.
  • Connect personally — and locally. Meaningful, human relationships still play a critical role in the insurance and financial services industry. One of the best ways to create these relationships is to connect with people on a local level. Consumers may not have an intrinsic connection with a national brand logo, but they can create a tangible connection with an agent or adviser with an office down the street.

See also: 3 Useful Cases for Social Media  

Collaborating for a Better Blockchain

Blockchain, a distributed ledger technology that offers a secure, incorruptible record of transactions on a decentralized network, is showing extraordinary promise as a means to boost transactional transparency and operational efficiencies across the life insurance and annuities space. The technology has the potential to help insurers lower costs, explore new markets and, more importantly, provide an engaging and integrated service to the end customer. But the insurance industry will realize the biggest benefits only if all industry organizations work together for the greater good.

Currently, there are three large groups in the insurance space working together with peers to look at the blockchain technology to determine how carriers can use blockchain to benefit the industry as a whole. First, P&C carriers and institutes are helping lead the charge. These groups have been working on industry-wide use cases for the P&C industry for nearly two years. Second, B3i, which was initially set up by reinsurance firms primarily based out of Europe, is now expanding globally. And finally, led by LIMRA, life and annuities insurers are coming together as an industry to explore ways to leverage blockchain. LIMRA’s recently established Blockchain Advisory Council is working as one entity to develop collaborative industry solutions.

See also: How Will Blockchain Disrupt Insurance?  

While carriers can leverage blockchain and other technologies like digital; big data and analytics for growth; improved customer experience; and competitive differentiation, the power and promise of blockchain can only be realized if carriers collaborate and work together as a group — and keep the end customer in mind.

This collaborative model will benefit all insurers and ensure that every firm in the blockchain network gets the same information at the same time. In one use case example, carriers can use blockchain to access the data typically available from the Death Master File to provide prompt services to the policyholder as soon as they receive updated information on a death. Having timely updates on a death will enable the carrier to provide the best service at the most critical phase of a policy holder’s or beneficiary’s lifecycle. Every organization can then rely on an information flow that’s consistent throughout the industry, and carriers can then differentiate and develop a competitive edge based on how they handle the information and respond to death claims. However, the collaboration ensures that every organization gets the information at the same time so that they can appropriately meet their customers’ needs.

With smart contracts, contract settlements between a carrier and a reinsurer could be made easier and faster than ever before, because all data will be available in the blockchain as a smart contract. Another use case could be agent/agency fraud identification and sharing.

See also: Blockchain: What’s the Real Story?  

Blockchain may be an enabling technology for several different improvements within the life and annuity industry. For instance, in the near future (we hope), the industry will have the ability to automate the underwriting of more complex life policies and better serve life insurance customers because electronic medical records will be available through the blockchain. The time from application to complex policy issuance will be minimal, delivering a “no touch” experience for the customers.

Blockchain technology is here and is already being implemented collaboratively in the P&C sector. The life and annuities industry is looking to leverage the experience from the other insurance sectors and the financial services sector to jumpstart our own journey. These are just a few use cases, but there are many other possibilities, which expand as we look to a more integrated but decentralized blockchain world.

Why Customer Focus Isn’t Enough

It’s supremely intuitive that customer focus is the key to business success. It is also something that industries that have typically focused on products or distribution are now aware they need to change. Bravo!

However, how many leaders are really harnessing the full power of customer focus? If after reading that question you immediately thought “big data,” please stop, put your smartphone down and back away from the table. This is not the kind of power I am talking about.

The type of customer focus that I am talking about is better referred to as customer care — not just caring for customers, but caring about them. Maybe a good way to describe this would be customer indebtedness. These are companies that truly live, breathe and feel grateful for their customers, and put them above all else. Very few companies actually do this. They may say it, but being it is completely different.

See also: How to Bottle Great Customer Experience  

I was inspired while attending a recent LIMRA conference in Barcelona. One of the speakers, Artemis Pantelidou, general manager from EuroLife, owned by the Bank of Cyprus, humbly told the story of how her company was on the brink of collapse during the economic crisis in 2013 when Cyprus faced an EU and IMF bailout.

EuroLife was damaged by these market conditions. People were panicked. They wanted (and oftentimes needed) their money, and the company faced the risk of losing a significant amount of its customers, thereby jeopardizing its financial position for those who stayed.

However, it weathered the storm by staying focused on the customer and doing everything it could to make sure its customers were taken care of. It was in constant, open, honest dialogue with its customers, employees, agents and regulators. The company asked for all constituents to stay focused on customers and find new and different ways to satisfy as many as it possibly could. While some suggested it shut down to prevent a “run,” the way banks and stock markets do, Pantelidou insisted that EuroLife stay open for business and deal with each situation one customer at a time. After all, an insurance company is there to help with risk, not run away from it. Once customers understood the situation and how it could hurt so many people, they were even more grateful the company did so much to help them. And the storm passed.

When it was time for the Q&A segment of the presentation and attendees were looking for the magic bullet that helped EuroLife persevere, Pantelidou repeated that there was no more to success than doing what’s right for the customer — each customer. She gave credit to her leadership team and to everyone who worked together, but that was it. Without saying these words specifically, the sentiment was that the company owed a debt of gratitude to its customers, whether they stayed or didn’t stay.

They emerged stronger than ever, with advantages in the following areas:

  1. Leadership team’s trust and respect for each other
  2. Employee respect for leadership
  3. Customer loyalty
  4. Confidence in team’s abilities to handle volatility and uncertainty
  5. Regulators’ trust
  6. Public image
  7. Ability to innovate solutions

While nobody wishes to have an experience like EuroLife’s to achieve a competitive advantage, what lesson can be learned in the chaos of the everyday?

See also: How to Get Broader View of Customers  

If your company seems to be wrestling with any of the seven issues above, running around frustrated with leadership alignment, uncertainty or business barriers to innovation, perhaps adopting an attitude of customer indebtedness now could help your culture overcome those issues sooner rather than later. If you are longing for the everyday chaos to calm down before you can adopt this attitude, you’ll need a real crisis to break the cycle. Why wait?

RIP to the Idea of ‘Sold, not Bought’

Let’s have a moment of silence for the “sold, not bought” paradigm. Before anyone gets panicky, we’re not laying agents to rest, but rather recognizing that sold, not bought is about a mindset that served our industry in the past and that holding on to it for too long is now hurting us.

It’s not about favoring a particular distribution method. Agents can live without this paradigm — and likely be better off for it.

Learning from other paradigms

If people in your company are still having arguments internally about this, let’s first look at what we can learn from other arguments that have died over time. These include:

  • “the Earth is flat;”
  • “the four-minute mile is impossible;”
  • “HIV is a death sentence;” and
  • “Pluto is a planet.”

What’s common about all these arguments? New capability. Somewhere along the line, a scientific breakthrough, a person with new knowledge or a separate discovery caused us to see the argument in a new way. Then we eventually agree on the new truth. It’s time to do the same for the sold, not bought paradigm.

What’s changed?

There is new capability in the hands of consumers that did not exist when the paradigm was created. The modern consumer has so much new capability that the term “prosumer” was invented by Alvin Toffler in his 1980 book “The Third Wave.”

A prosumer is a very active consumer who blurs the lines between professional and amateur and controls information flow, the experience and, even, the sale. Modern companies like Amazon, Apple and Google have done a great job, both leaning into this trend and shaping it.

See also: Paradigm Shift on Cyber Security

As an industry, we have convinced ourselves that nobody wakes up in the morning and wants to buy insurance unless someone makes her do it. This drove the sold, not bought paradigm. It had truth to it in the days when consumers did not have access to information like they do today. However, the prosumer found this concept disrespectful and, perhaps, even arrogant. Hanging onto this notion has caused the industry to lose focus on the end consumer and shift the focus to the agent as customer. We then end up with:

  • Complex products that please a few key sellers but damage the customer experience;
  • A heavy push in marketing strategies that result in expensive incentives and margin pressures; and
  • Compensation models that provide incentives for the wrong behavior and lead to onerous regulations, such as the DOL fiduciary rule.

Opportunity to relearn

There’s a lesson here, but we need to revisit the nature of demand. Economics lessons tell us that there are several nuanced styles of demand, dictated by the nature of a product.

It’s the manufacturer’s job to cultivate demand, manage demand or both. Historically, creating demand was in the hands of the agent and was fused with the sales process. Because of the prosumer’s new capability, the role of demand creation and the sale are now decoupled.

See also: Taking the ‘I’ Out of Insurance Distribution  

For those who think nobody wants life insurance, think again. While it isn’t as highly sought after as beer or shoes, the 2014 study by LIMRA and Maddock Douglas indicated there are almost 19 million “stuck shoppers” (people who intend to buy but the current experience causes them to get stuck along the way) for life insurance. In addition, if you talk to some of the new startups/disruptors in the insurance space, they believe insurance is a bought product, and it is simply their job to cultivate more demand and create a superior experience.

So if we replace the paradigm of “sold, not bought” with “bought, not sought,” we can put the responsibility back into the manufacturer’s hands to cultivate demand, deliver better on the experience and, most importantly, ask ourselves what role advice plays in the new world. Many are pointing to robots as the answer.

But can an industry so deeply rooted in social purpose really operate without humans helping humans? If not, we have an opportunity to reinvent the agent role in a profound way.

Navigating a Path to ‘Jubilescence’

LIMRA and Maddock Douglas embarked on a study that unveils significant findings among mass-market consumers and their attitudes about “retirement.”

Retirement is in quotes because the notion of traditional retirement, that is, the stoppage of work at a set age, and saving up enough in advance to prepare for it is likely passé, perhaps even irrelevant.

There is significant opportunity for providers who can crack the code in the mass market, also known as the “middle class.” This study aims to learn about the middle class, not from a demographic point of view but from an attitudinal one. Some significant findings include: Middle class is a state of mind, not an asset or income level.

Interestingly, 36% of people in lower income ranges and 81%of people in upper income ranges consider themselves middle class. So that state of mind is quite widespread, and 74% agree middle class values are worth protecting.

We found out only 25 % of the people who define themselves as middle class are thinking of retirement in the traditional sense (stopping their current work at the age of 65). Another 22% are thinking retirement will be after the age of 70, and 39% think it will be by age 64 or earlier. A full one-third say they very well may not retire at all.

See also: 75% of People Not on Track for Retirement

In addition, the notion of retreating on beaches and sailboats is also passé, as many report they aspire to a lifestyle that is more down to earth, that makes more time for family, or even for pursuing modest hobbies, health and faith.

And the notion of retirement in general is being replaced by the notion of a lifestyle change, but one that is firmly rooted within a middle-class mindset. It’s not about a life of leisure; it is about being active with a different purpose. And this can happen in any timeframe and with many different catalysts.

We should stop thinking about retirement as a bright line goal and be more fluid in our ways of helping people navigate their path to “jubilescence,” a new word coined by combining the Spanish translation of retirement (jubilación) and the idea of adolescence, a transition to a future self. Some people may have several jubilescence phases in their lives; some may have one. Some may be brought on in a positive and proactive way; some may be thrust upon people unexpectedly. Either way, the opportunity for professional advice is abundant. And perhaps the planning time horizon should be shorter and make room for more than one transition.

In addition, jubilescence is highly individual; we cannot use demographics as an indicator of what people need or want. In an analysis of individuals in the same demographic class and circumstance, we found high degrees of individuality, even uniqueness, in terms of priorities and needs. One size does not fit all.

See also: Why People Don’t Save for Retirement

About one-third admit they don’t have an advisor and believe that’s appropriate. This suggests that we have a lot of work ahead of us to change the model and change the outcomes for consumers and ultimately the industry. If the current incumbents of the industry don’t, then disruptors will because the new Department of Labor rule will force some players out of the game, making opportunity for others.

Finally, this study opens up spaces for new kinds of expertise beyond current products. We should be thinking about developing and delivering expertise that addresses needs that go beyond saving, investing and insurance, and assist in skilling up for new work opportunities, maximizing the value of living spaces and managing crises. This could be a transition opportunity for the advisors of today or a recruiting opportunity for the advisors of tomorrow.

So the question is … Can this industry commit to serving the middle class in a way that is attractive, unbiased and also profitable? With the right work, analysis and innovation, the answer is yes.