Thursday, June 13, 2024
Home Authors Posts by Craig Klenk

Craig Klenk

Craig W. Klenk, CLU, ChFC, MSFS, Vice President Brokerage Sales, American National Insurance Company

American National Insurance Company 2020 Carrier Forecast

Nothing Is More Expensive Than A Missed Opportunity

Was 2019 a flat or down year for you? Not for American National Life Insurance Company which had another stellar year of life insurance production growth. Although complete details are not released yet, I can say we are happy with our continued year over year growth while the industry remains relatively flat. Why are we consistently growing our life business? A lot of credit must be given to an opportunity we seized upon in 2011. This opportunity is the focus of a vast number of agents and agencies as a catalyst to grow their business year over year too. What is that opportunity? First ask yourself the following questions with regards to your production in 2019:

  • Are you increasing your life sales with existing personal clients?
  • Are you increasing your life sales with existing business clients?
  • Are you increasing your life sales with new personal clients?
  • Are you increasing your life sales with new business clients?

If you answered “no” to any question above, don’t continue to miss out on this huge opportunity in 2020. What is the opportunity you are missing? It is as simple as adding living benefits as a core product in 2020. Living benefits offer your clients access to the death benefit while they are still living, assuming an event or trigger has occurred which has dramatically shortened the insured’s life expectancy. Products offering living benefits should include the full suite of chronic illness, critical illness and terminal illness. All three are part of a complete package of protection for your client.

Offering living benefits will increase both personal and business sales enabling you to help your clients be better prepared for the unexpected while living. Here are some examples of how you can make 2020 your year of increased life sales by offering living benefits as a core product.

Existing Personal Clients—Review your book of personal clients. Do any of your clients have the “outdated” type of life insurance or the “updated” type of life insurance? Outdated life insurance does not contain living benefits. Updated life insurance contains all three living benefits. When was the last time you offered your clients a no cost life insurance checkup to make sure they have updated life insurance? Try it. Your clients will respond positively, and your life sales will grow by doing what is right for your clients.

Existing Business Clients—Review your book of business clients. How many have buy/sell coverage in place which is outdated….not containing living benefits? Why should you be concerned with buy/sell coverage where no living benefits are included? Think of it this way. What happens if one of the owners in an outdated buy/sell agreement survives a severe heart attack but can’t return to work due to complications from the heart attack? The business, which the buy/sell was supposed to protect, must continue to operate as normal without one of the business owners. The business will probably lose customers, income or may have to close altogether without two healthy owners. The healthy owner(s) must somehow pick up all the responsibilities no longer covered by the health impaired owner, while continuing to pay the health impaired owner a regular salary. Remember the current outdated buy/sell agreement is triggered at the death of a business owner, not when a business owner has a life shortening illness and cannot return to work. If the health impaired owner’s life expectancy has been dramatically shortened, this is where living benefits may be able to pay a benefit to help the business continue during the health impaired owner’s absence.

New Personal Clients—If you are struggling to develop new clients, begin offering life insurance checkups as part of your practice. Many existing policies do not offer living benefits and therefore leave policyholders exposed to devastating health events. An example may include an insured who was required to have a life insurance policy as collateral for a loan thereby paying off the loan if the insured passes away. But what happens if the insured suffers a life shortening health catastrophe and cannot work? The loan still needs to be paid, yet the insured may not have the income to continue paying the loan. This is where living benefits may be able to assist the insured with much needed cash flow enabling the insured to continue to meet loan obligations.

New Business Clients—Consider offering a no-cost business insurance checkup to potential business clients. Again, does the business owner have the outdated or updated life insurance? Just like the previous buy/sell example, all business insurance should include living benefits. For example, let’s look at key person coverage where there is an existing key person policy for $1,000,000 on a 55-year-old. The key person is the head of operations managing all personnel, plant and equipment allowing the owner to develop marketing plans and focus on sales. This is a very successful team allowing each individual to focus on their strengths while minimizing their weaknesses. When the key person experiences a life-threatening stroke and cannot return to work, the owner now must fulfill the role of operations manager too but cannot afford to allow marketing and sales to suffer. The existence of a simple life insurance policy without living benefits cannot help the owner’s cash flow to assist in hiring the key person’s replacement to continue the business. Nor does the current policy offset lost sales while the owner now is managing both operations and sales. Life insurance with living benefits is the answer.

If you have been missing the opportunity of offering living benefits to existing customers and new customers alike, stop. As I. M. Pei, the great Chinese-American Architect once said, “Stop worrying about missed opportunities and start looking for new ones.” Offering the complete suite of living benefits is your new opportunity. Educating your existing clients about living benefits and offering living benefits to potential clients is your new opportunity for 2020. Don’t offer any life insurance to anyone without first exploring all the benefits of living benefits.

As you can see there is a huge opportunity for you to grow your business by adding living benefits as a core product in all your sales opportunities, personal and business alike. When you decide to move forward with offering living benefits, make sure of the following:

  • All products offered by the carrier should include living benefits. Many carriers offer no living benefits or only offer living benefits on a few products. American National offers all living benefits on all products including term, guaranteed universal life, indexed universal life, universal life and whole life.
  • If purchasing term, make sure the product(s) available for conversion includes living benefits. Some conversion products do not include living benefits or have limited living benefits available.
  • Living benefits should include chronic illness which offers a benefit when an insured cannot perform two of six Activities of Daily Living (ADLs) or experiences a severe cognitive impairment. Be careful where there is a healthcare professional attestation requirement confirming the chronic illness is permanent. Healthcare professionals are very hesitant in providing this attestation.
  • Living benefits should include critical illness which has as many as 16 triggers as with American National’s products. Some companies have branded other names to the same triggers included in the critical illness living benefit offered by American National. The quantity of triggers may vary by state.
  • Living benefits should include terminal illness which offers benefits when the insured’s life expectancy is less than 12 or 24 months depending on the state where the policy is sold.
  • Lastly, check the limits of coverage and waiting periods with all three living benefits. Many carriers promote living benefits while at the same time dramatically limiting the amount available for a claim or require long waiting periods before a living benefit is available.

Although the discussion above centered around reviewing existing policies to update them to include living benefits, replacement of business may not be suitable for every client even if the existing coverage does not contain living benefits. Every client is different thereby every situation needs to be suitable for the individual client.

To all of you, agent and agency alike, who are growing your business with American National Insurance Company, we want to say, “Thank You!” for another great year in 2019. For those of you who have not had the American National experience, we ask that you give us a chance to earn your business in 2020 so we can help you grow your production using living benefits as we have done for so many in the past.

All the best for you in 2020! [CK]

American National Insurance Company 2019 Carrier Forecast

Foundation For Change
I just returned from a doctor’s appointment with my wife, daughter and son-in-law. My daughter was having an ultrasound checkup of her first child and as proud grandparents we wanted to see our sixth grandchild as soon as possible, even though she wouldn’t be born until April. As you can imagine, our new little bundle of joy is still developing and while only weighing 12 ounces it is totally amazing how much detail today’s ultrasound is able to capture. Seeing our new granddaughter took me back 30 years to when my youngest child was born. At that time we thought the ultrasound technology was amazing, but there is no comparison to today’s technology. The extreme detail and analysis available today to make sure our granddaughter, Corinne, is progressing as expected was only dreamed about 30 years ago. Just as medical technology has made dramatic changes over time, American National has made dramatic changes in 2018 with even more positive, customer centric changes planned in 2019.

Artificial Intelligence: Remember when you were able to utilize your first Blackberry handheld device to read emails? While traveling for business I thought it was so cool to deplane, turn on the Blackberry and receive emails that I could respond to while in the airport or while in a taxi headed to a meeting. What none of us realized at the time was how much those handheld devices and eventually emails would control our lives. Managing the huge volume of emails we receive today has become a daily challenge. American National receives thousands of emails every day into the life new business department. Without technology, each email would have to be opened and read by a case manager. The case manager would sort the email by case number, forward the email to be imaged into the correct case file by an imaging clerk and then a case manager would confirm the email was indeed in the correct file. As you can imagine, this extremely manual process is just too long, complicated and expensive. Early in 2018 we implemented an artificial intelligence (AI) platform to read, analyze and route emails directly into the appropriate file without human intervention. Once in the file, the file is automatically “awakened” in the system notifying the case manager or underwriter to an action needed on the case. There is no human touch whatsoever until the file is ready to be acted upon as the next step in the approval process. The AI also determines the tone of the email to determine if the sender is upset so we can be notified if a specific email needs more attention than all the others. Currently the AI platform processes more than 6,000 emails weekly for our life new business area. We have plans underway to expand the AI platform to include annuity new business and policy owner service in the near future. Due to the time savings of this new technology, case managers are able to build stronger relationships with customers and allow case managers to focus more on the larger complicated cases to better serve our customers.

Underwriting: In January of 2018 we implemented our underwriting computer approval process whereby IGO e-applications meeting the Xpress Underwriting Program criteria (Less than $250,000 face), could be approved without any human intervention. Initially we were experiencing a computer approval rate of 16 percent of Xpress e-applications submitted. Although this doesn’t sound like much, when you consider we process in excess of 155,000 applications yearly, 16 percent is substantial. Many of these e-applications were submitted, approved, policy issued and commission paid within 48 hours. All without any manual processing of the case files.

To further enhance the computer approval process, in July we added the Xpress Plus Underwriting Program (less than or equal to $1,000,000 face) and we implemented our SMART application. The SMART application was designed with computer approval as the primary goal. Instead of having open ended or free form areas of the application for the agent to complete with descriptions of impairments or details on medications taken by the applicant, our SMART application utilizes reflexive question technology specifically designed to enable a definitive answer to each question asked. This is achieved via drop down answer menus and check boxes next to answers already furnished on the application. SMART has now increased our computer approval of e-applications to about 38 percent. Again, this technology saves massive amounts of time allowing underwriters to spend more time on relationship development and larger sophisticated cases.

Distribution: This is an area where American National is seeing dramatic change as well. In the past the industry has somewhat frowned on network marketing companies, yet the industry has been struggling to find the next source of new agents coming into the business. Let’s face it. Many existing agents and agency owners are getting closer to retirement with no successors in a position to take over the business. Many are just planning to ease out of the business knowing vested renewals will generate a nice stream of income for many years to come. This is a dilemma we all face. I was very concerned about where our industry was headed until recently. I am less concerned now as there are quality network marketing firms bringing in quality “newbie” agents who will be the future leaders of our industry. Will the “newbies” stay with the network marketing firms forever? Of course some will stay but then again some won’t. Just as with captive agents, some network marketing agents will venture out to do their “own thing” which will continue to move this wonderful industry forward into future generations. Do the network marketing “newbies” have their challenges? Of course they do but all it takes is training similar to when my generation came into the business 30+ years ago. Training focused on placement and persistency generates quality business for the carrier and for the industry. The greatest thing about these “newbies” is the thirst they have for industry knowledge. They are like sponges. They want to learn from you and they absorb everything you share with them. This is the new generation, the new face, the next source of agents to carry on.

Living Benefits: I would be remiss if I didn’t mention living benefits. This important part of planning is becoming more mainstream and will continue to evolve and grow as the norm and not the exception. A growing number of agents realize they could risk litigation if they don’t offer living benefits as an option to their clients when life insurance is needed. Agents are making living benefits a core item and are now asking if their client has “updated insurance” with living benefits or “outdated insurance” without living benefits.

Foundation: Even though there is massive change everywhere in the insurance industry, a solid foundation consisting of basic principles our industry was founded upon is required to continue positive change. The insurance industry still remains a relationship driven business which requires top talent. No matter how advanced an insurance company may become with technology, it still requires human interaction to attract, retain and satisfy customers. American National has been committed to “Doing What’s Right” for its customers since its founding in 1905 and we will continue to do so for decades to come.

Just as my new granddaughter Corinne will receive a strong foundation of family support as she grows in life, American National continues to reinforce its strong foundation with quality people, and the highest integrity and unquestionable ethics in all decisions made which impact customers and employees alike. We look forward to building a strong, personal relationship with you, helping you grow your business and earning your business every day. All the best in 2019! [CK]

American National Insurance Company


Do What’s Right
At American National Insurance Company (ANICO) our code of business conduct is simple: “Do What’s Right.”  We apply this philosophy to all aspects of our daily business, including our beliefs about distributor relationships and product offerings, which continues to serve us well.  ANICO had a phenomenal 2017, receiving numerous accolades such as being named to Forbes’ 2017 “Most Trustworthy Financial Companies” list—joining a small group of insurers who have been rated A or higher for more than 75 years by rating agency A.M. Best and surpassing $100 billion of life insurance in force.  Apparently we are doing what’s right.

In addition to the accolades during the year, the Independent Marketing Group at American National Insurance Company had another very successful year.    Not only did we have production success with double digit growth in annuity sales, but we also experienced double digit growth in life sales.  Consistent growth over a number of years has now become the norm, but we do not take that growth for granted as we know we have to earn each and every application we receive in order to continue to receive additional business from our business partners.  

Each year we reassess what constitutes the definition of “success” so we can develop a course of action for the future.  In 2017 success for ANICO wasn’t just based on production growth.  Success also meant reaffirming relationships with existing business partners while growing additional relationships with individuals and groups which share the ANICO philosophy of “Do What’s Right.”  Like many other carriers ANICO is going through an underwriting and systems evolution, implementing programs to decrease turnaround time and pay commissions faster.  Unlike many other carriers, ANICO is not going through an evolution process when it comes to relationships.  Evolution defined is the gradual development of something from a simple to a more complex form.  Although evolution is good in many areas of business, such as underwriting and systems, evolution can be detrimental to other areas of business such as relationships.  Business evolution can take the personal aspect out of relationships.  At ANICO, we keep relationships simple, straightforward and uncomplicated.  Our relationships are not just about production success.  Our relationships are built on mutual respect for our partners and a shared vision of future opportunities while we do what’s right.  Here is what some of our customers are saying:

“ANICO is a relationship company just like I had in the old days but with the technology of today.”  

“We can grow with ANICO because they listen, understand and adapt to what we need as a customer.”

“I appreciate the fact that with ANICO’s full product portfolio I can satisfy the needs of 80 percent of my clients with one carrier.  This means I have a primary carrier so I know one set of forms and get to have a one- on-one relationship with my underwriter.”

You may ask yourself what the statements above have to do with looking forward to 2018 and beyond.  ANICO has a simple three step approach to continuing success in the future all linked to the “Do What’s Right” philosophy:

  1. ANICO will continue on the current path of making relationships a top priority in 2018 and beyond.  We like to do business with partners.  A true partner understands that both sides must win in order for a relationship to withstand the test of time.  An insurance company can solve distribution challenges with the right distribution business partners.  We have proven this with our mix of business and our access to a wide variety of markets including the underserved middle market.  Some would say seeking a partnership relationship is the old way of doing business, but we say it is doing what’s right.   The right relationships are crucial for long term, sustained success.
  2. ANICO will continue to respond to customers’ needs by building customized platforms where necessary to expand market opportunities.  A true partner must adapt to the customer’s way of doing business.  Because our partners asked for it in 2017, we segmented life new business and underwriting teams to match the way our partners process business.  We began paying commissions daily on all products.  We also built an untethered e-app as our partners needed a way of entering an application in front of a client without requiring a connection to the internet.  In 2018 we will introduce drop ticket as an option for submitting applications as our partners need this capability.  We will also make available marketing materials in Spanish as our partners have requested.  We plan to make many more exciting enhancements making it easier to write business with ANICO.
  3. ANICO will continue to promote a complete, consumer oriented product portfolio with living benefits on all life products, term conversion options to all permanent products and fair compensation for our distribution partners.   We don’t restrict consumer benefits by production type and we don’t subject consumers to inadequate conversion options.  ANICO won’t have the cheapest rate on a spreadsheet, but ANICO will have competitive products which anyone would be proud to offer their clients.  We believe that doing what’s right for the consumer is the ethical way to run a business.  Our sustained growth shows that our distribution partners agree with this philosophy.  

ANICO is an insurance company which places a priority on doing what’s right for our distribution partners, agents and policyholders.  ANICO will never be the answer for everyone, but ANICO is and will be a great partner for some who understand the simple three step approach above.  If you feel you share the same values, please reach out to one of our distribution partners or national sales managers for more information.  At ANICO, we are proud of our past, energized by the present and excited about our future.

American National Insurance Company wishes everyone a happy and prosperous 2018. [CK]

American National Insurance Company


2016 was another great year for the Independent Marketing Group at American National Insurance Company (ANICO) with double digit growth in both our life and annuity lines of business.  We are proud of the continued steady growth of both product lines.  We owe a great deal of this success to focusing our efforts on Individual Marketing Organizations (IMOs) and a select few National Marketing Organizations (NMOs) which understand the ANICO value proposition and want to partner with ANICO.

For 2017, ANICO will continue to focus on building partnership relationships with IMOs and a few NMOs.  The reason we continue to focus on IMOs and not brokerage general agencies (BGAs) is the typical BGA offers little value other than access to multiple insurance company product rates through spreadsheets.  The normal IMO deploys a forward looking value proposition which offers independent agents sales ideas, education and access to markets or market access strategies.  The value of being able to spreadsheet a sale will continue to be diminished as virtually every agency on the face of the earth has a similar stable of insurance companies in their portfolio and can produce spreadsheets.  Many NMOs are simply commission aggregation clubs which increase insurance company expenses, reduce margins and bring little more than additional bonus compensation to its members.  In addition to the continued focus on IMOs and NMOs, ANICO will continue the process of reducing the total number of top level contracts across the country, thereby increasing the value the ANICO contract.  ANICO is not a fit for everyone, but those agencies who understand our value proposition are being rewarded with a partner who truly understands what it takes to help the agency grow their business.

On the product front, the news will continue to be dominated by indexed universal life (IUL) sales.  More and more advisors will offer this product going forward due to the sales momentum over the last several years and continuing tough market conditions for fixed rate products.  ANICO will continue to focus on a simple, easy to understand, easy to present product design.  The combination of IUL and accelerated benefit riders (ABRs) makes good financial sense for many consumers.  Although ANICO has had ABRs on all of its life products including term for over five years, insurance companies without ABRs will continue to add them to their product portfolios in 2017.  The challenge, to an advisor offering ABRs from multiple insurance companies, is in understanding the huge differences between the riders from one insurer to next.  A chronic illness rider with one insurance company can be vastly different than the chronic illness rider with another insurance company.  It is important to pay close attention to the fine print regarding the benefits of ABRs from each insurance company.  Many ABRs are very restrictive in their application, access and amount available to the consumer.

One continuing industry dilemma is the shrinking advisor population which will continue to have a negative impact on agencies and insurance companies alike.  During the last NAILBA convention in Dallas, there were many side meetings where the primary focus was to find solutions to increase the number of next generation advisors.  It seems no one at this time has the answer, although there are a few marketing organizations which have begun new marketing strategies to increase the number of young advisors.    

Along the same lines is the huge concern regarding successor ownership for independent agencies.   This has been on the minds of every insurance company in independent distribution for many years.  A large portion of NAILBA members have no successor ownership in place and are looking for ways to transition into retirement over the next five years.  

Lastly I hope you have one more space left for a 2017 New Year’s Resolution.  That final resolution would be to make more money by bringing your clients and prospective clients quality products and innovative solutions from ANICO.  ANICO is one of the few insurance companies offering a full portfolio of products where you can place 80 percent or more of your business knowing you have one of the most competitive products with consumer friendly benefits from a company with solid financials since our founding in 1905.  We have the full slate of term products (ART, 10 Year., 15 Year., 20 Year., 30 Year.), an extremely competitive GUL with return of premium, indexed universal life, universal life, whole life, simplified issue, multiple deferred annuities options, a single premium immediate annuity with a cancellation feature and a pension department focused on small businesses’ opportunities which are not impacted by DOL regulation.  There is no need to spread your business among 20 different insurance companies for minimal difference in premium only to be frustrated by different forms for every sale and weak relationships with the insurance companies.  By placing the majority of your business with ANICO, you will save time by knowing the products, forms, people and processes.  This will lessen the hassles of new business processing while generating more income for the agency and advisor.  Hopefully you will experience the value-added relationships, products, processes and people available to you from ANICO in 2017.

Everyone at American National Insurance Company wishes you the best year ever in 2017.  Let us know how we can help make your resolutions come true and how we can earn your business. [CK]

American National Insurance Company


Moving Forward – The American Way
We are truly living in challenging times.  The world is in chaos because of terrorism; who knows what to believe from any of the presidential candidates; and many insurance companies previously owned by European parent companies are being spun off while Chinese and Japanese insurance companies are buying American insurance companies.  As Lee Iacocca once said, “In times of great stress or adversity, it’s always best to keep busy, to plow your anger and your energy into something positive.”  American National Insurance Company continues to plow ahead in a positive direction with over 110 years of conservative American values and financial strength aligned with consistent, innovative leadership.  

2015 was another steady year of growth at American National Insurance Company, experiencing increases in both life and annuity production.  2016 promises to continue that trend with new and repriced products to enhance your opportunities with us. 

On February 1 we are launching our latest product innovation.  Signature Guaranteed Universal Life with a return of premium rider will be an industry leader in competitive guaranteed premium rates for the life of the contract.  The return of premium rider is simply named Cash-Out Rider.  For face amounts exceeding $250,000, at the policy owner’s discretion, the Cash-Out Rider will return up to 65 percent of the premium in year 15, with up to 100 percent return of premium in years 20 and 25.  Plus, the policy will include our extremely valuable chronic, critical and terminal accelerated benefit riders at no extra cost where approved.  For more information, visit our website at or contact your local American National Insurance Company distributor.

Actuarial Guideline 49 (AG 49) was introduced September 1, 2015, implementing guidelines on how indexed universal life (IUL) is illustrated.  There were many in our industry, including me, who had some concerns regarding how illustrated rates were being shown.  Many of us who were concerned lived through the 12 to 14 percent illustrative rates of universal life during the 80s.  Of course we did not want to see that piece of history repeat itself—where typical universal life illustrations were minimally funded and thereby subject to lapse when crediting rates dropped.  However, the vast majority of those illustrating IUL did so with maximum premium funding.  Funding with maximum non-MEC premiums makes a huge difference if and when crediting rates drop.  As is normal, there are always a few outliers in our industry who push the edge of the envelope with illustrated rates on IUL.  The outliers who pushed the extreme created a situation conducive to additional regulation which now penalizes those insurance companies and/or agents who are conservative in their approach.  In my opinion this is what took place and therefore brought about the implementation of AG 49.

Despite the outliers, it was clear the major mutual insurance companies, including one large stock company which has been in the brokerage market for years, were the driving force behind the push for the illustration guidelines.  Why?  The goal was to slow down sales of IUL, thereby preserving sales of dividend driven whole life products.  I don’t believe the AG 49 guideline will curb indexed universal life sales.  IUL has its place in the market and makes complete sense for many who are seeking upside potential with downside protection.  With that said, after the next phase of AG 49 is implemented in March of this year, maybe it is time we take a look at the “black box” called dividends.

No mutual company can now boast, “we have never reduced dividends.”  Dividend based whole life products are not without their own risk of underperforming verses what is illustrated.  As you may recall, the industry faced illustration concerns when mutual insurance companies were illustrating vanishing premiums.  Weren’t the dividends supposed to pay the full premiums after the vanish point as illustrated and explained by agents?

What I am really saying is there seems to be a double standard in the industry.  If we are going to curb so called IUL illustration abuses, let’s look at all illustrations for every type of policy.  The product sold is only as strong as the insurance company supporting the product and the assumptions used by the insurance company in designing the product.  Let’s open the “black box”. 

Loyalty is something we wholeheartedly believe in at American National Insurance Company.  We support those who support us!  We want to partner with those few agencies who want a special relationship with an insurance company.  While recently attending the NAILBA meeting in Orlando, many brokerage agencies were concerned about the lack of loyalty between the agent and the brokerage agency.  Agencies are challenged with agents jumping from agency to agency looking for the best “deal”.

I find this interesting, as I, for one, have been expressing my concerns for years about the use of spread sheets for every sale—no matter the type of sale.  I too used spread sheets in my agency, but it was not the only value-add offered.  What happened to “tell me about your client” or “what are you trying to accomplish?”  I don’t see this type of value-added service in many agencies.  These days every agency has 30-plus insurance companies and offers agents some of the most competitive products in the market.  This is not exciting anymore.  This is old news!  Every agency can do this.  We all have heard the old saying, “in the absence of value, price is the only differentiator.”  Times have changed and we must change with them.  The old saying should be modified to, “in the absence of value and the existence of price equality, commission is the only differentiator.”  This is true today and is why agents are looking for the best deal.  Value-added is not bringing 30-plus companies onto a spread sheet showing the best three or four rates.  Value-added is bringing other opportunities to the agent that the agent didn’t realize existed.  When was the last time a simple term sale was turned into a buy-sell with multiple policies or expanded to a key person sale with a non-qualified retirement plan?  This type of value-added assisted planning brings value—thereby increasing loyalty between the agent and agency.

American National Insurance Company is unique and different.  We want to partner with select agencies who want to grow their businesses.  We want to invest in the relationship.  We want to bring value to the relationship.  If you want to differentiate your agency or practice, reach out to us.  We are looking for a few good partners.

All the best with less stress and more opportunity in 2016. [CWK]

American National Insurance Company


“STEADY AS SHE GOES”—A command to the helmsman to observe the compass direction on the present heading and maintain that course. This phrase and definition are the best descriptions for American National Insurance Company (ANICO). Founded in 1905 and paying dividends every year since 1911, ANICO is “steady as she goes.” Based on published results through the third quarter of 2014, total annualized premium continued its steady positive double-digit growth. 2014 was another good year for ANICO despite the low interest rate environment and regulatory challenges to ­consumer-oriented product approvals.

Our focus has been and will continue to be on middle income America. There were numerous accomplishments in 2014, and we are proud of our continuing steady movement forward.

Products: In 2014 we introduced the new Signature Indexed Universal Life (IUL). This new series of IUL products continued the focus on the accumulation market with two new annual point-to-point buckets in addition to the existing, very popular, high cap bucket. Sales results have been outstanding.

Relationships: A unique proprietary IUL product was released for one of our largest distribution clients. This was a promise we made to them due to their commitment to ANICO. The proprietary product was designed in concert with the partner distributor and was released on time for introduction at their annual convention. The product has been a huge success.

Services: We listened to you, our customer. Early in the year, we implemented a state-of-the-art commission advancing system which increases accuracy through easier to understand transaction reconciliation. We also implemented a new contracting workflow system which has decreased the process time dramatically. Both of these system innovations were major investments for ANICO and a huge step forward in making it easier to write business with us.

Challenges: When this article is released in January, I expect the IUL illustration debate will not be settled. ANICO is fully supporting the ACLI proposal and plans to continue this support. Please get involved with this issue by telling the insurance companies you work with and your state’s department of insurance (DOI) where you stand on the issue. We believe the ACLI proposal is in the best interest of the consumer while acknowledging that indexed universal life is different in structure from whole life or current assumption universal life. A personal comment: Isn’t it amazing how an “expert’s” attitudes and opinions change when the entity paying the expert’s salary changes? Based on conversations regarding this subject at the recent NAILBA meeting, many share the same opinion. Another challenge experienced by many insurance companies is with state departments of insurance not applying the same product approval standards to all companies. Just like ANICO, there are many frustrated insurance companies that believe this practice creates unfair competition and is harmful to the very consumers the DOIs are supposed to protect. We continue to be diligent in seeking approvals so we can bring a choice of quality products and features to consumers in every state.

For 2015, ANICO will continue the steady movement forward for the continued success of ANICO and our distribution partners.

Products: We will continue to pursue product innovations. Although I cannot comment in detail on product development at this time, we are looking at many of our products with plans to increase the competitiveness and features for our customers.

Relationships: ANICO will continue to support partnership relationships through enhanced services, product innovation and financial marketing support. We are open to win-win relationships with distributors, including non-traditional BGA distributors who understand our value proposition and do not spreadsheet every case. We will continue to reduce the number of top contracts in the field to add value to the distribution partners who are actively promoting and producing with ANICO. Not everyone is a fit for ANICO; therefore, not everyone should have an ANICO contract.

Services: We made another large investment in our systems which will positively impact our life new business workflow during the year. More information will be released later this year, but our partners will see faster turnaround of pending life applications which will lead to higher placement rates and receipt of commissions sooner.

Challenges: Hopefully the IUL illustration debate will be resolved so the industry can move forward without controversy. Our goal is to provide quality illustrations with reasonable assumptions, giving consumers a way to access quality life insurance while at the same time accumulating value within the contract for supplemental retirement income when desired.

We also are very concerned about the absence of new brokerage agencies and brokerage agencies which are transitioning to the next generation of ownership. The LIMRA brokerage committee is in beginning discussions with NAILBA to develop a program to shine a spotlight on this situation. Our goal is to find a way to assist in the growth of the brokerage market working in concert with agencies. A survey is in progress which should help in determining the direction of this program. More to come on this project.

In summary, if you want to work with people who value relationships and will help you grow your company, then you should consider a win-win relationship with ANICO. We are not a company for everyone; however, we are the company for a select few. We look forward to earning your business in 2015. [CWK]

American National Insurance Company


At American National (ANICO), 2013 was a great year. Based on published results through the end of the third quarter, ANICO experienced a 37 percent aggregate growth in recurring life premium. The brokerage division alone experienced a 270 percent growth in recurring life premium for the same time period in 2013. We owe a great deal of this success to focusing our efforts on those individual marketing organizations (IMOs) and a select few national marketing organizations (NMOs) which understand the ANICO value proposition and want to be a partner with ANICO.

For 2014, ANICO will continue to focus on building partnership relationships with IMOs and a few NMOs. The reason we continue to focus on IMOs and not brokerage general agencies (BGAs) is the typical BGA offers little value other than access to multiple insurance company product rates through spreadsheets, while a true IMO deploys a forward-looking value proposition that offers independent agents sales ideas, education and access to markets or market access strategies. The value of being able to spreadsheet a sale will continue to be diminished as virtually every agency on the face of the earth has a similar stable of insurance companies in their portfolio. Few NMOs offer value propositions to their members such as sales ideas, education and market access strategies. Many are simply commission aggregation clubs which increase insurance company expenses, reduce margins and bring little more than additional bonus compensation to its members.

In addition to the continued focus on IMOs and NMOs, ANICO will continue the process of reducing the total number of top level contracts across the country, thereby increasing the value of having an ANICO contract. ANICO is not a fit for everyone, but those agencies that understand our value proposition are being rewarded with a partner who truly understands what it takes to grow their businesses.

On the product front, the news will continue to be dominated by indexed universal life (IUL) sales. Advisors cannot ignore this product going forward due to the sales momentum over the last several years and continuing tough market conditions for fixed rate products.

ANICO will continue to focus on a simple, easy to understand, easy to present product design with minor competitive modifications in 2014. The combination of IUL and accelerated benefit riders (ABRs) makes good financial sense for many consumers. ANICO has had ABRs on all of its life products, including term, for more than two years, and you should expect to see those insurance companies without ABRs to begin adding them to their products in 2014.

The challenge to anyone offering ABRs from multiple insurance companies is understanding the vast differences between the riders from insurer to insurer. A chronic illness rider with one insurance company can be vastly different from the chronic illness rider with another insurance company. It is important to pay special attention to the fine print regarding the true benefits of ABRs from each insurance company. Many ABRs are very restrictive in their application, access and amount available to the consumer.

Speaking of ABRs, it looks like the debacle in California is not over. As many of you know, California has allowed only a handful of insurance companies to have ABRs approved for sale, while declining access to the majority of insurance companies wanting to add ABRs to their products.

The ACLI has done an excellent job of pushing through a new bill that should allow all insurance companies to add ABRs to their products while complying with California DOI’s requirements. After all, allowing additional insurance companies to offer ABRs to California consumers is what is in the best interest of California consumers. As I am preparing this article, the word on the street is that California has backtracked in allowing the admission of new ABRs for all carriers and will favor those few carriers that were already approved. If this is true, this will penalize the consumers in California by continuing to limit a consumer’s choice as to insurance company and coverage options. We can only hope California will move forward with allowing their consumers a choice.

One industry dilemma is the shrinking advisor population, which will continue to have a negative impact on agencies and insurance companies alike. During the last NAILBA convention in Dallas, there were many side meetings regarding recruiting the next generation of advisors.

A working group of several insurance executives was established at the LIMRA brokerage committee meeting while at NAILBA. I am honored to represent ANICO on this work group. We hope to develop and implement strategies that will begin the process of stabilizing the number of advisors in our industry. The working group will begin brainstorming in January 2014 and will work closely with the NAILBA task force assigned to this issue. It is clear that the industry does not have a comprehensive answer at this time for solving the shrinking number of advisors dilemma.

Along the same lines is a huge concern regarding successor ownership for independent agencies. This is on the minds of every insurance company that is in independent distribution. Many NAILBA members have no successor ownership in place and are looking for ways to transition into retirement over the next five years. I am thrilled to see that NAILBA has established a “next generation” group to share ideas and strategies for successful agency succession. Congratulations to NAILBA for continuing to tackle the tough issues facing our industry.

Last, I hope you have one more space left for a 2014 New Year’s resolution. That would be to make more money by bringing your clients and prospective clients quality products and innovative solutions from ANICO. Whether it is our ART term product, which can be converted to a 20-year level term (both with ABRs—except California); our simple-to-present IUL, a simplified issue opportunity for as few as five lives; or our retirement plan review program for updating existing 401(k) plans in the small business owner market. Hopefully you will experience the value-added relationships, product and sales concepts available to you from ANICO in 2014.

Everyone at American National Insurance Company wishes you the best year ever in 2014. Let us know how we can help make your resolutions come true. [CWK]

American National Insurance Company


Business as usual, but not in unusual times. As we enter another year in a very tough economy, agents, brokerage general agencies and insurance companies face unprecedented challenges to maintain margins and market share. The following article is a representation of what we at American National Insurance Company (ANICO) are seeing and believe we will see going forward into 2013.

Actuarial Guideline 38. AG38 is a differentiator for those insurance companies that practiced aggressive pricing strategies tied to inadequate reserves. These companies are now scrambling to make up reserve deficiencies and modify or pull existing products to comply with AG38’s clearly defined reserve requirements. Conservative insurance companies such as American National, which may have not been as competitive in the past due to meeting the full AG38 reserving requirements, are excited about the opportunities of a level playing field.

Product Development. Term product rates will continue to be tweaked throughout the year as insurance companies continue to balance the need for market share while maintaining acceptable margins. As stated previously, certain insurance companies such as American National have been reserving to what we believe has always been the spirit of regulation AG38 and we are well positioned to increase market share due to a leveling of reserving requirements which others have not done until recently. More term products will include accelerated benefit riders (chronic, critical, terminal) as agents and consumers demand these benefits.

Permanent life: A continued shift to indexed life will be seen as more companies introduce IUL products. However, an increased level of agent and consumer education is needed to avoid potential lawsuits claiming IUL products were sold as investments instead of as life insurance. As a result, illustration disclosures will become more lengthy and informational. Agents will look to brokerage general agencies to explain the differences in products and help in accessing the market opportunities of IUL. This will require BGAs to change from the status quo spreadsheet presentation to one that fully outlines each product’s nuances. The IUL market will continue to be the largest life growth segment for 2013.

Annuities: As with IUL, we will see more indexed annuity products introduced during the year as agents and consumers seek downside protection with upside potential. Additional options for premium allocation buckets will continue to be the trend, yet the concern is at what point does the indexed product become too similar to a variable product. At what point do we become too aggressive with the premium allocation options and therefore subject these wonderful products to FINRA regulation? Gold, silver and other exotic premium allocation options will eventually bring the regulators to the table again to challenge who can sell this product and how this product should be sold.

Single premium immediate annuity sales will continue to increase because consumers want guaranteed income without market risk. The comfort of knowing the income generated from an SPIA is guaranteed offsets the lack of receiving larger payouts as seen in previous years. Add to the guaranteed payout the ability to surrender the contract if a consumer needs access to funds and you have a winning combination from the American National SPIA product.

Multi-year guarantee annuity sales will continue to slide due to the current investment environment. Consumers will not lock up their funds for numerous years, due to the general consensus that the economy will begin to improve in the near future.

Distribution. Many agencies have seen flat to declining sales in 2012, and this will continue to be the trend for 2013. Why? Agencies refuse to change their methods of acquiring new business and ignore the fact that there are fewer producers remaining in the business each year.

As I stated in last year’s article, far too many brokerage general agencies rely heavily on product spreadsheeting rather than adding value to their relationship with agents. Today, everyone can offer multiple products and companies; however, the successful, growing agencies are those which are agent relationship focused. These agencies bring value by providing agents with point-of-sale assistance, product education, marketing techniques and new sales opportunities.

While an agency can use a spreadsheet to illustrate the differences in premium required or loan distribution amounts, does that truly give the full story? The answer is a resounding no. What about accelerated benefit riders—does a client pay for the benefits or are these benefits part of the policy without an additional cost? How many triggers does the critical illness rider include? Is the variable loan rate set at an arbitrarily low rate which subjects the policy to higher volatility? Successful agencies must know the differences in the products, communicate those differences to agents, and assist with selecting the appropriate product for each client.

A challenge faced by every insurance company due to shrinking margins is the ability to continue to pay large fees to agency aggregators in order to be part of a “preferred” insurance company list. As with the relationship between an agency and an agent, the necessity of having a value-added relationship with an aggregator’s management and members is the key to continued support of the aggregator by the insurance company. Lack of any such relationship makes it an easy decision for the insurance company to change its focus to individual agencies and away from the aggregators. Being a part of a preferred list is not enough; loyalty must be a two-way street going forward to sustain continued support.

While 2013 will continue to be a challenging year for agents, agencies and insurance companies, there is a silver lining in every dark cloud for those who realize business cannot be conducted as usual in the unusual times we are facing.

Everyone at American National Insurance Company wishes you the best year ever in 2013. Hopefully you will experience the value-added relationships, products and sales concepts available to you from ANICO. [CWK]

American National Insurance Company


It’s Time to Rotate the Crops. My father passed away recently, during which time I reflected on my childhood and the wonderful times I had growing up in a small community where my grandparents were vegetable farmers. During planting season, I remembered the previous year we planted corn where we were now planting potatoes, and where we planted potatoes last year, we were planting another crop. It then hit me that we did not plant the same crop in the same place more than two years in a row. When I inquired as to why we did not plant crops in the same place each year, my grandfather educated me on the need to rotate crops in order to keep the soil fertile and, thereby, ensuring a successful harvest, assuming  Mother Nature cooperated.

At this point you are probably asking yourself what this has to do with the future of the brokerage insurance industry. To put it bluntly, a majority of advisors and brokerage agencies are planting the same crop in the same place year after year and now are seeing diminishing returns on their efforts. The soil is not fertile. Let’s take a look at several examples.

Life policy review has been the only “crop” for many advisors and agencies for more than 10 years. Why are we not seeing the results previously generated? Let’s face it, the market is shrinking. The vast majority of high-end consumers have already been offered a life policy review. Also, clients are growing older, which naturally means health challenges will make it more difficult to replace a policy originally issued at a preferred classification with a standard or substandard classification.

Another reason for the diminishing returns is that many advisors and agencies have become lazy, utilizing a spreadsheet of rates as a solution for every client problem. Look at your last 10 sales. Were all made using a spreadsheet as a solution to your clients’ needs? Did you truly solve your clients needs, or just offer to reduce premium and/or increase coverage for the same amount of premium paid currently? If you said “yes” to these questions, it is time to expand into other opportunities before it is too late.

What happened to the days when developing a customized solution to solve a client’s needs was the first and foremost priority? After the client’s needs were met, product competitiveness was then considered. Using a spreadsheet is easy, but does it solve the client’s needs?

If an advisor or brokerage agency is to survive going forward, expansion into new, value-added marketing niches is a critical ingredient to increase sales opportunities with existing and new clients.

If you want to grow, you must change. Many brokerage agencies and advisors are concerned about the future because they have relied far too long on the ability to replace existing coverage and spreadsheet everything without placing thought behind the sale to determine which products and features are the best solution for the client. An example of this is buy/sell planning.

When faced with a client needing a solution for buy/sell planning, many just spreadsheet term and sell the cheapest rate. Is that the best solution for the client? Was value added other than “I shopped the market to find one of the lowest premiums”?

In many instances a permanent product with an accelerated benefit rider (ABR) is a much better solution for the buy/sell client. The contract value can assist in the buyout or supplement retirement while the ABR covers chronic, critical and terminal illnesses. What happens if your client/business owner has a heart attack or stroke while actively at work? This is “living death” for a business owner who needs cash flow to keep the business running during the illness. Does a term policy offer the benefit of accessing the death benefit prior to death if such an illness occurs?

The bigger question is, are you liable as an advisor for not offering the ABR solution as an option? Is the brokerage agency liable for not educating the advisor on the ability to cover such illnesses with ABRs? This is a solution which should be offered and explained to the client. A solution such as this will not be found on a spreadsheet of rates. Going forward, advisors and agencies must offer solutions like ABRs to fully meet clients’ needs.

Advisors and agencies must change their methods or risk losing existing clients and thereby dramatically reduce the ability to maintain their current standard of living. Here are other examples of profit center niche opportunities which should be considered now.

Would you like to access the largest single employer in the United States? If so, why are you ignoring the federal employee market? Many companies like American National Insurance Company (ANICO) offer a turnkey package to access this lucrative market.

If you work with small business owners, would you like to increase your income by six figures each year from existing clients? You should offer a pension plan review. At ANICO, we call this concept Retirement Plan Review (RPR). RPR is a “life policy review” opportunity for pension plans. This is a huge, untapped market.

Have you considered simplified issue for your business clients? Did you realize your business clients with 10 or more employees may qualify for up to $250,000 in life insurance on each employee with only three health questions?

Are your margins too thin on small case permanent applications? Why are you sending smaller applications through antiquated new business processes which take 45 to 60 days to issue and 90 days to receive your commission? Utilize express underwriting programs available which can issue in good order applications within three days without requiring a medical exam, blood or urine. An express underwriting program leads to shorter cycle times, less overhead expense, higher client satisfaction and greater profit margins.

The sales opportunities previously mentioned are being ignored daily but would have a dramatic impact on bottom line profitability. In 2012, growth-oriented advisors and brokerage agencies will begin to “rotate crops” by looking for non-spreadsheet, value-added niche marketing opportunities which mesh seamlessly into their existing practices, driving additional sales with existing clients while attracting new clients. Those who do not adapt will continue to see diminishing sales and revenue. Time to rotate crops! [CWK]

Looking For A Profit Center Opportunity From Your Existing Clients?


Although times are tough for many in the industry, there is always opportunity just around the corner—if you look hard enough.

Often overlooked are retirement plan reviews (RPRs), which can be a source from which to generate substantial current and residual income. In order to fully understand the potential of RPRs, we must first look at life policy reviews, which many advisors offer as part of their service to clients. Why?

First and foremost, life policy reviews are good for your clients. In many instances, premiums can be reduced or coverage can be increased for the same amount of premiums your client is currently paying.

Second, existing clients have a level of trust and confidence because they have worked with you. This makes the sales process much easier because they already have confidence in your knowledge of products.

Third, life policy reviews encourage referrals.

Fourth, offering a review leads to additional sales opportunities such as buy/sell and business succession planning.

Last, life policy reviews are a valuable source of revenue.

Offering life policy reviews as part of your practice just makes good business sense—whether you are a retail advisor or a brokerage general agency.

If you are offering life policy reviews as part of your practice, you owe it to yourself and your clients to offer retirement plan reviews as well!

What Is a Retirement Plan Review?
With RPRs you use the identical approach as with life policy reviews except you are reviewing qualified retirement plans (401(k)s and defined benefit plans) instead of life policies.

If your client has a 401(k) or defined benefit plan, you should offer a review to make sure your client has the optimal plan available. It may be costing your client money if he doesn’t have the proper plan design.

Enactment of the Pension Protection Act has enabled many small business owners to receive as much as 85 percent (or more) of their total annual profit sharing deposit for their own benefit. A comparison of the profit sharing allocations in Table 1 illustrates the power of the new law changes. (The business owner can receive almost $20,000 more into his account each year at no additional cost to the business!)

                                        Table 1
            Profit Sharing Allocation Comparison
                                        Percent                      Percent
                       Before    of Salary        After    of Salary

Owner         $29,400       15%       $49,000    25%
Employee       6,900       15               2,300       5
Employee       7,050       15               2,350       5
Employee       5,850       15              1,950        5
Employee       5,250       15              1,750        5
Employee       4,350       15              1,450        5
                     $58,800                     $58,800
Owner’s share:   50%                            83%

How Big Is the Market?
There are more than 27 million businesses in the United States with fewer than 20 employees (this comprises 98 percent of all businesses in the United States). There is $68 billion in existing 401(k) plans with firms of 25 or fewer employees. Ninety-one percent of Americans indicated they have not yet achieved their financial goals for a comfortable retirement. Plus, there are 70 million baby boomers desperately needing to accelerate their savings if they are to retire comfortably.1,2

Networking opportunities abound with RPRs: Property and casualty agencies with commercial accounts would benefit from this service. Employee benefit firms are a natural source of referrals. Health producers have access to business owners. Most estate planning clients are owners of small businesses and know other small business owners.

Do you need to be an expert in qualified retirement plans? Absolutely not! When you entered the insurance business, were you an expert in estate planning, business succession planning, non-qualified deferred compensation plans or employee benefits? The lack of expertise did not stop you from becoming successful.

So how did you become an expert? You asked your clients for the business and then you had a mentor or expert assist you in developing the appropriate solution for your client. Insurance companies in the qualified plan market have experienced professionals on staff to analyze your client’s existing plan, walk you through the process, and conference call with you and your client to help ensure you make the sale. Rely on the insurance companies’ pension experts to be your “mentors” when entering this lucrative market.

Start with your existing small business clients who have 25 or fewer employees. After working with existing client plans, transition to existing clients without a plan, then to prospects with plans, and eventually to prospects without plans. This approach increases your knowledge and confidence at every level. In addition to generating sales from RPRs, you will gain access to top executives of these businesses for estate planning, business continuation and personal planning opportunities.

How Do You Get Started?
Determine which of your existing clients have a plan in place. Ask your client: “When was the last time you had your 401(k) reviewed?” The vast majority of your clients will state they have never had their plan reviewed and were not aware a review was needed.

Your response should be: “The enactment of the Pension Protection Act dramatically increased the benefits available to owners and top executives like you. If your plan has not been reviewed recently, you owe it to yourself to have this done. There is no cost for the review. If we find that your current plan is the best available, at least you have the peace of mind knowing this fact.”

At this point, request a copy of your client’s plan documents; the most recent Form 5500, which is filed every year; and a copy of the employee census. Submit these documents to your company’s pension department for an analysis of the existing plan. It is truly that simple.

Is a special license required? For years, many insurance companies have offered non-registered group variable annuities as funding vehicles for pension plans. The vast majority of the states require only a regular life insurance license to offer this product. For complete information, contact your insurance company representative to determine any state exceptions.

A standard non-registered, group variable annuity allows clients access to numerous funds from multiple fund families. If you are securities licensed, selling agreements should be in place with your broker/dealer prior to initiating the review process.

Why should you offer RPRs? They are a valuable service to existing clients, they will generate referrals and open doors to new clients, they will increase ancillary sales such as estate and business planning, plus they are a valuable source of income.

What Does the Future Hold?
Once you become comfortable with the various plans and the process to install them, the real opportunity lies in the fact that 85 percent of small businesses do not have a retirement in place!

1. Statistics of U.S. Businesses, U.S. Census Bureau, 2007.
2. LIMRA Study: Is There Magic in the Middle Market, 2008.