Kathy Carlson

What products does your agency offer and what suggestions do you have for producers to further protect their clients’ financial well being beyond life products?

Nardini:
We present ourselves as a full service insurance brokerage agency serving financial services professionals using a  product lineup that  consists of life, annuity, long term care, and disability income protection plans from the major carriers in the industry. Our staff has more than 150 years of experience collectively and we offer, in addition to competitive products from financially sound insurance companies, a commitment to the financial services industry, the people involved in the industry and the people they serve, to bring the best possible carriers, products and solutions for the need at hand. The client’s best interest is first and foremost the most important thing for Benefits Brokerage Agency, Inc. as we engage in the business of brokerage. We feel it is important to work with agents that think and act along those same lines.

English:
Consolidated Insured Benefits, Inc., offers whole life, indexed UL, term life and a complete suite of medical products.  It’s our opinion that whenever possible all life products sold should include living benefits, chronic condition and critical illness.  Life products sold with living benefits do not increase the cost of the coverage and allow for the death benefit to be accessed while the insured is living.  

Cohen:
We are seeing a trend towards the hybrid life with LTC or CI type riders. The trend is important as we are seeing a shift towards this marketplace. The challenge for the consumer and broker is information overload–there is a lot of product out there!      Many times a deeper analysis of your client is needed to get to the right suite of products. We have trained our brokerage consultants to work with brokers to help them understand the various suites of products and clear through the clutter.

Phillips:
Like most BGAs we offer life insurance.  It’s been a mainstay of ours for ages.  However, we’re probably more diverse in our “front-line” product offerings than many BGAs.   We also offer disability income products; long term care insurance; fixed annuities; and non-health insurance group products: life, STD, LTD, dental.   We’ve also started ramping up our efforts in the worksite life arena. 

When I was young in this business I took for granted that this was the “way things were” in BGA product offerings.   We’ve always offered more than just “cheap term and impaired risk” life products and I thought everyone in our space did.     The multiple product lines allow us to open doors that would remain locked if we were otherwise only a life agency.   We respect relationships that brokers might have with other agencies, but if a broker has a great relationship with another BGA for life products, that’s fine–use us for fixed annuities or DI. Just like a consumer might do the bulk of his grocery shopping at one supermarket, but just loves the corner bakery–we’re fine with a broker getting his French pastries through us while he gets his eggs and milk somewhere else so to speak. 

For those who want to use us as their “primary grocery store” we’ve got the milk and eggs, as well as those French pastries, a great butcher shop, and the freshest produce.  The proverbial “one stop shop” at play.

Likewise, in some unexplainable way it seems there’s a buoyancy to our revenues–if one product line starts to stumble, we’ve seemingly always experienced the dynamic that another fills in that drop off.  And, overall, we’ve been fortunate that  our diversity has led to slow but steady topline growth.  

In a similar fashion I think that’s why a broker should not just be a “life insurance agent”–clients need to consider multiple insurance products and the people they refer an agent to might need a product beyond life insurance.   

Our model has adjusted to this very recognition–not only by life insurance agents, but by benefits producers, property-casualty agents, and investment advisors.   They are looking for education, training and often outright partnership or point-of-sale help in lines outside of their area of comfort.  We are there as a credible and trusted source to help expand their practice beyond their core business and diversify their revenue stream. 

Carlson:
The collection of products we offer is intended to encourage agents to protect their clients beyond the scope of life insurance. Our fundamental product lines include individual life insurance, long term care, disability income, critical illness and annuities. To accompany life insurance coverage, we offer long term care and critical illness riders. Pensions and life settlements are also available.

Our group product line includes life insurance / AD&D, dental, vision, long term disability and short term disability.

We recommend formulating a diverse portfolio of products to promote security for all stages of life; to help cover unexpected accidents or illness, to be prepared with income for retirement, and to support loved ones in the event of death. By doing so, not only will agents provide a more secure future for their clients, they also strengthen their relationship with them.

Much of the traditional training and education of agents has either evaporated or shifted.  What does your agency do to fill this gap and where would you steer agents to find necessary training and education?

English:
At CIB, Inc., we offer extensive concept training.  Concept selling is a much better platform to communicate with potential clients.  Selling from the concept platform allows clients to see life insurance as a solution rather than as a product.  If you ask 10 people if they want to buy life insurance, nine will say no.  One will say yes because he is about to need it.  Selling from a concept like tax-free retirement or college planning allows clients to view the benefits and rewards of the life insurance contract as positives and not view life insurance from the stereotypical negative perspective.

Cohen:
Brokers need to take the time to expand their education and knowledge of not only the products, but the underwriting programs and the advanced technology that is available in the marketplace. There is “product” and then there is “process.” Today’s modern insurance broker needs to understand both to move ahead. There may be very little difference in product and a huge difference in process–and that edge can win you a case. Then again, you don’t want to sacrifice products of better value for just an easier process. There’s a fine line and our brokerage consultants are trained to help brokers identify both areas. We teach and run programs daily.  We are very consumer driven and attract brokers that are like minded.

Phillips:
We offer many educational opportunities for agents and brokers.  We market many carrier or marketing group webinars and presentations.  We direct brokers digitally to the endless array of training resources on carrier websites and industry websites. But we’ve taken more of a back-to-the-future approach after feeling many of these methods have fallen short:  we see brokers.  We call brokers.  We have face-to-face meetings and workshops with brokers to provide information, product training and education.  

There’s a manic chase for the millennials in our space–and every consumer space that’s out there.  I get it.   But I think too often an agency or broker assumes that their  current constituents are those that will consume the trendy opportunities that are out there.   We’re constantly bombarded by the fact that the average age of an independent producer is in his/her 50s.   We can bemoan the fact that our future is bleak and we can wring our hands that the industry is not reaching younger consumers, but while we’re angsting away, we’ve got to make a living.  We need to provide training and educational opportunities to the constituents who are here right now.  

While those 50-somethings (like me!) have come light years in their understanding and grasp of digital opportunities, for the time being the old fashioned way is the way most want to be interacted with in my opinion.  Don’t get me wrong, even the most primitive of agent or consumer is “jiggy” with current technology and it is a fact that more and more education and training is moving to a digital platform.   It will, someday, be all-digital, all-the-time.  But for now, I think the time tested methods of educating, training and marketing to an agent, or them marketing to a consumer, hold true.  

Plowing through with accepted methods to one’s constituents while laying the groundwork, understanding systems and knowledge is the trick.   I think we’re doing a good job with that. 

Carlson:
While we continue to organize webinars and seminars for agents to learn about specific products or processes, our emphasis is on a personal, hands-on approach. Whether over the phone or face-to-face, we consistently coach them every step of the way. We recommend prospecting methods and provide customized materials, teach them sales ideas and how to recognize cross-selling opportunities, walk them through contracting and application processes, and hold their hand through underwriting. At the core, we provide a complete backroom support system.

The Brokerage Business Is Dynamic,The Potential For Success Unlimited

What do you find most exciting about the insurance business?

Kathy Carlson: Most of all, the camaraderie! Our industry has advanced over the past 25 years. The products we offer have improved, the means to apply for insurance have multiplied, the underwriting processes have progressed, and communications are instantaneous. While these changes in and of themselves are exciting, it is our propensity to share ideas and experiences with each other that has allowed the insurance industry to evolve in such positive ways.

I have established so many meaningful relationships and friendships. It’s uplifting to know the entire industry works together to continually improve in order to reach one common goal—that consumers get the best possible solutions for their needs.

William Cason: We have huge opportunities for writing more life insurance. All of the LIMRA surveys talk about how vastly underinsured and uninsured Americans are. Many people don’t have agents calling on them, perhaps an effect of the decline in home service agents. I think the use of technology and simplified applications/underwriting will help us reach the grossly underinsured as well as the often uninsured, middle market.

Michael Gorlick: Insurance, in its best form, is a creative process—combining one’s creative knowledge with a vast palette of products and resources—that is exciting and satisfying when it results in the best solution for a client’s important financial need. Being in the position to be “heard” regarding product development, product improvement and product distribution makes every day open to possibilities.

The brokerage marketplace is always dynamic. The sophistication of available products coupled with the depth of broker knowledge continues to grow. The markets we cater to will change dramatically over the next decade. I believe there is no better business to be in and the potential for success is truly unlimited.

On the producer front, the average brokerage producer is in his late fifties—in other words, an aging group of producers. However, we are seeing more business coming from independent broker/dealers, banks, and property and casualty firms. Providing back-office case management and marketing expertise to these groups, while exposing them to new lines of business, is where the brokerage industry’s future growth will be found. Exciting times lie ahead!

On the marketing front, a clear opportunity exists in the rapidly growing market for retirement products. The industry will be clearly defining its role in this large, fast-growing and profitable financial segment. According to LIMRA, over the next five years, nearly $1 trillion of retirement savings assets will enter the retail market.

Capitalizing on this emerging opportunity will require a better understanding of the needs of the customers approaching retirement as well as those customers already retired. Nearly one out of every two customers, age 55 to 80, expresses an interest in a guaranteed income product. This represents a market potential of nearly $250 billion, according to LIMRA.

There is no other industry that can guarantee lifetime income when it is needed most. Our industry is the only industry that can guarantee wealth transfer, income replacement, and income at any time. In an era when guarantees and security are so important to customers, we can play a starring role.

Mark Rosen: The insurance business may be thought of as staid and conservative, but it is really very dynamic with developments encompassing product changes, underwriting opportunities and sales ideas that relate to the current as well as anticipated tax environment. From the planner’s perspective, insurance provides a wide range of solutions to their clients’ needs from income replacement to business succession to retirement and tax planning.

What about the life insurance business keeps you up at night?

Cason: Not enough good training and an increase in the average age of the agent population. In years past, people went to work for career agency systems. Now everyone can sell life insurance, but apart from the mutual companies, no one focuses on it (money managers, financial planners, CPAs, banks, health insurance agents, senior market specialists, P&C agents, Internet marketing, etc.). As a result there are more and more Americans who are uninsured. While there has been a rise in worksite sales of life insurance, the usual results are that individuals are not being adequately insured, as no one is doing a needs analysis with them.

Training about the importance of cash-value products seems to be lacking. There are many agents who are caught up in the spreadsheet mentality (selling the cheapest product out there) instead of explaining and selling the value of products that might cost the consumer a bit extra but are a better fit.

I also worry that we don’t have enough young people entering the industry so distribution will look much different 10 to 15 years from now than it currently does. In addition to that, there are not enough advisors to sit down and do planning for people, so a large number of them either do not have life insurance or don’t have nearly enough.

Our country’s national debt is also somewhat concerning. As the government looks for alternative revenue sources, life insurance policies could get caught in the cross hairs. The possibility that we could lose the tax-favored treatment of cash value buildup in life insurance and also the tax-free status of the death benefit is a real possibility.

Gorlick: What keeps me up at night are the things that can’t be controlled—government regulations. We fought last year against fixed indexed annuities being regulated by the Securities and Exchange Commission and won. We constantly fight to retain the tax-free buildup in life insurance contracts. We are continually presented with new regulations describing how to conduct our business.

While I believe that government regulation is good when it truly protects the consumer, we appear to be constantly under attack as an industry. Was the financial meltdown in September of 2008 really caused by insurance carriers, as many in Congress would have you believe, or the failure of mortgage giants Fannie and Freddie (which, as of late February, received more than $150 billion in bailout funds with no end in sight)?

We know from LIMRA research that Americans in retirement have the following top four priorities: health care, inflation, volatility and longevity. We have strong consumer-friendly products—with guarantees—that can address every concern a customer may present. What other industry can provide all the financial solutions that individuals truly need?

We have products that will address health care (medical supplemental policies, traditional long term care, linked benefit life or annuities with LTC); inflation (a number of wealth transfer strategies); volatility (policies that absolutely guarantee tax-free benefits or other forms of payouts); and longevity (products that outlive the customer).

Nothing Wall Street offers has the guarantees and security that our industry can provide. It is interesting to note that the insurance industry is always regarded as being one rung below the upper tier of the financial services industry. Yet we can offer products for pennies on the dollar that can provide the solution that allows a family to be spared from financial devastation.

Rosen: I try not to let the things that I can’t control, like the pending legislative issues, keep me up at night. However, I certainly want to be aware and involved in the process and try to understand potential changes and their implications. So, at this stage of my career it isn’t so much the insurance business issues that cause me heartburn. Instead, many of the major issues and concerns revolve more around actually running a business such as staffing, technology, benefits, management and sales. While I am very proud of what our organization has accomplished, we have to work every day on the non-insurance aspects to keep things running right.

Carlson: I am concerned about the future. Where will brokerage general agencies fit into the marketplace in five years? As the insurance companies allow more direct contracts, from where will our business originate?

Another concern is that technology has changed consumer buying habits so they are more apt to gather information online. I observe so many agents focusing on selling insurance based on price quotes rather than uncovering their clients’ true needs. My fear is that the traditional relationship between agent and client is diminishing. Statistics from LIMRA show that the average household is underinsured. I’m eager to find a way to serve those potential customers.

Our core agent base is aging. Attracting new, younger agents must be a top priority for the industry.

What new product twists or legislation do you believe producers should be aware of?

Gorlick: On the annuity side: As more states adopt the NAIC model annuity suitability rule, each carrier must develop specific product training that must be completed before a producer can solicit any annuity business. Producers have been used to soliciting and then being appointed by the carrier; this will no longer work in many states, and producers need to be aware of this significant change in how they conduct business.

At Zenith Marketing, we track the state-specific regulations, which we constantly update. We are actively looking at creating our own four-hour CE approved course following NAIC guidelines. We are striving to make the annuity sale as easy as possible for our producers while providing them “real value” to help them grow their business.

On the life side: There is much to talk about because sometimes the easiest sale is the one that’s made instead of the challenging sale which may be more suitable.

For instance, product features such as return of premium riders on all products—including term—are under-presented. There are a multitude of valuable riders that should always be reviewed and considered. As an industry we have fallen in love with the spreadsheet. There is so much more we can do “beyond the spreadsheet!” Consider:

• In some situations, an individual life policy on the spouse is a better deal than survivorship universal life with one uninsurable.

• Sometimes 1035 money rolled into an immediate annuity can generate a net income that will purchase more insurance than the traditional 1035 exchange.

• Sometimes a term sale is the best solution instead of selling a “stripped down” universal life policy.

A professional insurance producer should know all the product options that are available and utilize his quiver of financial solutions and resources to present the best product for each client’s individual needs.

Rosen: Ask questions, understand your clients’ objectives, learn your product, including unique features and riders that can bring incredible value. Be sure to network and add value to every relationship. Also, recognize your primary role and then strategically partner for areas of the business that should not be allowed to sap your time and energy. These include shopping the market for underwriting and product support. There are brokerage agencies that have spent decades honing their expertise in these areas, and you can better serve your clientele by taking advantage of these resources.

Cason: There is potential for many business-owned policies to be written after implementation of the pension protection act that leaves policies subject to income taxation. Many agents don’t know about the law and many carriers don’t include a consent form with their application packet, therefore leaving many policies potentially exposed. Also, life/LTC hybrid products are very attractive.

What advice about building an insurance business do you have for producers?

Rosen: Ask questions, understand your clients’ objectives, learn your product, including unique features and riders that can bring incredible value. Be sure to network and add value to every relationship. Also, recognize your primary role and then strategically partner for areas of the business that should not be allowed to sap your time and energy. These include shopping the market for underwriting and product support. There are brokerage agencies that have spent decades honing their expertise in these areas, and you can better serve your clientele by taking advantage of these resources. [MR]

Carlson: Don’t just sell insurance, build relationships. Listen to your clients and ask the necessary questions, regardless of how difficult. Many agents are apprehensive about asking the personal questions essential to underwriting insurance—or afraid to return to their clients with undesirable news. Don’t walk away from the tough cases. Be up-front and honest. Build client relationships on trust and knowledge. Clients’ needs are always changing. If the relationship is there, you will have a client for life. And in turn, also gain additional potential for referral business. [KC]

Cason: Ask every client about life insurance. Brokers with multi-line agencies have a great opportunity to approach their clients about life insurance. Hiring the right support staff and investing in technology is also important. [WC]

Gorlick: If you as a producer “do the right thing,” you’ll be in business for a long time. And if that is your modus operandi, there is no better time to be a producer in this business. With current unstable economic events and changing demographics, the ability to provide guarantees, security and flexibility in the products we offer is unbeatable!

Producers need to partner with a brokerage general agency (BGA) that can get the business processed as quickly as possible with the least hassle, while achieving the desired result. They should leave that “back office” function to the expert—the BGA!

With one out of two households recognizing the need for more life insurance and 25 percent saying they are likely to buy in the next year, 2011 should be a banner year for the independent producer.

Undoubtedly the producer of tomorrow needs to be a generalist—providing a full variety of life, annuity, linked life/annuity with long term care, medical supplement, disability insurance, critical illness and traditional long term care solutions. Clearly, there are many different needs that must be addressed.

Consumers must understand that the government will not be able to provide an adequate safety net. Luckily, the insurance industry has the will and the way to protect their financial integrity. What a wonderful time to be in this business! [MG]