Steven Sanders

The old football adage states that blocking and tackling is what really wins games. It seems that this applies to other sports as well: Performing the basics with a high level of proficiency is often the real difference between winning and losing games. From that standpoint, our industry is really no different. We can get focused on new problems (i.e., new industry regulations) or get caught chasing the hot new technology or platform, but performing the basics with a high level of proficiency is often what really makes the difference between long-term sustainable success and failure.

Take a key statistic as a case in point for Columbus Life. Over the past six years, we have enjoyed a highly successful run. During this period, our new life target premium has grown at an annual compounded rate of over 22 percent per year; this is in contrast to industry growth of approximately two percent per year over the same time period. Our policy growth has exceeded 13 percent per year, which also stands in stark contrast to industry trends of just over one percent annual growth. What’s interesting is that this policy growth rate is nearly identical to our growth in the number of productive producers, which has grown at 14 percent per year during the same time period. The easy conclusion is that growing distribution has a direct and highly correlated connection to sales growth. It certainly doesn’t get any more basic than this statement.

The reality is that growing distribution is often simply about “blocking and tackling” effectively. It requires some basic tactics —consistently refreshing products, strong recruiting efforts, relentlessly telling the company story through marketing and wholesaling, providing top-notch service to producers and deploying add-on technologies that make doing business easier. It doesn’t require new revolutionary technologies, major strategy shifts, new direct-to-consumer web sites or unique affinity programs. These are certainly appealing opportunities, and should be explored in R&D or innovation-style labs, but for near- and mid-term growth, the tried and true tactics that our industry has been built on for decades can still be the biggest drivers of sales growth and success.

At Columbus Life we have pursued these basic tactics relentlessly. From a product perspective, we have narrowed in on our core competencies—mainly IUL and living benefit rider options —and sought to make improvements to those products every 12–18 months. In a similar fashion, we’ve expanded our marketing programs to focus exclusively on independent producers and to reach them in a variety of mediums, including social media (LinkedIn, YouTube), digital advertising, direct mail campaigns and traditional print advertising.

We’ve also dedicated significant resources to new producer recruiting. Some of them are the traditional sort—exposure at key industry conferences, direct mail campaigns and direct wholesaler efforts—but others are a little more distinctive, including LinkedIn promotion, Google advertising and a YouTube channel exclusively targeted to financial professional education. We’ve also returned to customary training programs, including in-person, home office training schools and a regular webinar program schedule.

This doesn’t mean we’ve avoided technology. Clearly, there are “add-on” technologies today that make producers lives easier. Electronic applications, electronic policy delivery platforms and mobile apps give producers easier access to information on both pending and in-force policies while allowing them to deliver a client experience in line with today’s “Amazon” mindset. As such, we’ve spent significant resources deploying these technologies to keep pace with modern requirements. 

But perhaps the most significant and fundamental tactic is providing truly high-touch, personal and direct service to independent agents. Many producers miss the “good old days” where they can easily get a knowledgeable live person on the phone to help them with their needs. This might be case design from a sales desk, advanced markets support from in-house attorneys, or underwriters who can walk them through the details of a case. This support shouldn’t involve multiple phone prompts, robo-answers or call-back situations. It’s not hard to provide easy access to key support associates with just a phone number, a short phone menu and associates willing to take their call. This provides superior, distinctive service to existing producers and establishes an industry reputation that can precede future recruiting efforts.

Of course, all of these basic elements come with a cost. The balance is to provide the items mentioned above while maintaining costs and still creating scale for the business. That’s where the higher-level technologies can come in. Modern workflow systems, producer portals and mobile apps, electronic apps and delivery tools, accelerated underwriting platforms and more can help control headcount increases that might be required by business growth. It requires capital investment to put these tools in place, but the long run can be flat or minimal increasing operating expenses while sales continue to grow.

As we look to the future, we are certainly going to face myriad new challenges. Significant changes in industry regulations seem to be just beginning. Threats from better technology-driven distribution competitors are always lurking. Low interest rates will likely continue to challenge our investment spreads and returns. However, at Columbus Life our core focus will remain on driving continuous, long-term and sustainable value for our agents through the effective execution of these types of blocking and tackling efforts. By doing so, we believe we are positioned well for long-term growth and will succeed despite the curveballs the industry and economy may throw our way.  [SS]

Our Current Industry Environment
The life insurance industry never ceases to challenge us.  On one hand, it’s a well-established and highly mature industry with a general environment of stability, consistency and clear expectations.  On the other hand, we continue to be tested by developments that will bring change to our industry—economic downturns, new regulations and technological advancements represent just a short list of potential disruptors.

These disruptions can easily become opportunities—carriers can invest in new technologies to meet market demand, changes in regulation can become opportunities if navigated appropriately and financially strong companies can leverage economic downturns by investing in growth and garnering new market share.

At Columbus Life, we continually work to balance these disparate and sometimes competing demands.  Our effective management of these evolving factors has allowed us to achieve consistent year-over-year sales growth for the last decade. During the currently prolonged low interest rate environment, we’ve maintained a broad competitive product portfolio of indexed universal life, guaranteed universal life, term life and annuity products.  And, our progressive technologies continue to help enhance business processes for independent producers and make doing business with Columbus Life even easier.

Goals for 2016
As we move forward, we are focused on three areas—completing business faster with technology and higher levels of service, continually driving and improving our “producer first” mindset and culture, and increasing awareness of the Columbus Life brand and story.  We believe these are the keys to successfully continuing our growth and exceeding our clients’ expectations.

One of our core goals is to reduce “submission to commission” time by more than 50 percent—and today’s technologies can help make that a reality.  In 2016, we will introduce several new technologies that will speed up business processes—especially new business processing. 

Thanks to electronic applications, electronic policy delivery and mobile applications, many of the time-consuming aspects of policy underwriting, generation and delivery can be shortened considerably.  In 2016, we will introduce the CLIC Mobile app to allow appointed producers to track the status of all pending business, respond and communicate directly with new business and underwriting teams as needed, and accept or modify policy offers. We will also  introduce an electronic policy delivery tool that will help producers significantly shorten the time and effort needed to complete the final delivery of a policy to a client.

While technology is critical in improving business processes and efficiency, we still believe that personal interaction, support and relationships are the cornerstones of success.  To that extent, we are partnering with many of our internal support areas to make sure they are easily accessible, responsive and proactive when it comes to supporting independent producers.  We are evaluating and refining our agency onboarding process to ensure that the right information is provided when it is most needed.  We continually evaluate our call centers to ensure that the ability to reach a live contact is not encumbered by voice prompts and wait times.  And as always, we maintain our open communication policy that allows producers to speak with any member of the Columbus Life team—whether that means direct access to underwriters to discuss pending cases or direct lines to senior management to communicate needs and concerns.  Our company was built on this fundamental aspect more than 100 years ago and it continues to be as relevant today as it’s been for the last century.

Finally, throughout 2016, we will continue to refine our marketing efforts to make sure the Columbus Life story is better known among independent producers.  This includes some of the classic methods of promotion in our industry, but also includes more modern techniques.  We have begun to leverage YouTube®1 and other social media forums in new ways that not only deliver value for independent producers but provide advertising and promotional opportunities for the Columbus Life brand.  Similarly, our innovative mobile apps—both the Tax App and CLIC Mobile–also deliver an added benefit of name recognition and promotion.  Mobile-friendly websites along with enhanced digital advertising and promotions will round out our efforts to expand the Columbus Life brand.

Underlying all three of these 2016 goals is our continued commitment to maintain our financial strength and a consistently competitive product portfolio. Our heritage of strength as a member of Western & Southern Financial Group, one of the strongest life insurance companies in the world, helps give producers and their clients confidence in Columbus Life’s future. Our indexed universal life, guaranteed universal life and current assumption universal life products remain competitive, and will continue to be evaluated to ensure their core features and added benefits meet client needs. We believe that maintaining these core aspects—while adding new programs and key technologies—will establish the foundation for another decade of solid company growth.

With our company’s compelling story, competitive products and financial strength, we will continue growing the number of producers that represent Columbus Life while striving to maintain the loyalty of our currently appointed independent financial professionals. But above all, we will continue to make decisions that put independent producers first. [SJS]

Footnote:
1: YouTube® is a registered trademark of Google, Inc.

Looking Ahead

From an economic standpoint, 2014 remained much the same as the prior year. The industry ended 2013 with some hope for a slow recovery in interest rates. However, by mid-year, our industry was again dealing with the all-too-familiar challenges of offering competitive products while maintaining profitability in a historically low interest rate environment. Generally, the economy seemed to show slow growth, with various bright spots reported in key economic indicators. The stock market also continued to perform well, while corporate profits remained strong. This seemingly mixed bag created an environment that offered both challenges and opportunities.

Fortunately at Columbus Life, due to our financial strength and fiscally conservative approach to the business, we continued to successfully navigate economic challenges and respond to opportunities. While no company is immune to the low interest rate environment, we have managed to successfully weather this challenge—which seems as though it will continue until at least mid-2015. Our growth trajectory has continued with life premium, life policies and annuity premium all showing positive growth for the year (the continuation of a five-year trend). We continue to believe that by leveraging progressive technology, offering best-in-class products and features, and delivering personal, high-touch support to independent producers, top-line and bottom-line growth is still possible.

Goals for 2015

Our goals for 2015 focus on introducing new products and enhancements that meet producer and consumer needs, developing new innovative technologies that make doing business with Columbus Life even more attractive, improving the speed and efficiency of our underwriting processes, and continuing our expansion throughout ethnically diverse markets. All of these key initiatives will be backed by our efforts to raise the awareness of Columbus Life’s unique story and strengths among current and potential producers, including promoting our industry-leading financial strength, our high-touch relationships and our unwavering commitment to serving independent producers.

Throughout 2015 we will continue refining our digital applications to make doing business with us easier, faster and more efficient. Recent additions such as our iGO e-App¹ electronic application let producers submit applications quickly, easily and in good order to the home office. Our CLIC Quote mobile app quickly quotes product prices, while our Tax App provides calculators, tax tables and more. In 2014, downloads of the Tax App nearly doubled, making it our most popular mobile app for producers. In 2015 we will continue creating new technology to become one of the fastest in “submission to commission,” including proactive case status alerts for producers and electronic policy delivery for clients. Additionally, all of our consumer- and producer-facing properties will be mobile-friendly by the end of 2015.

Even in a technology-driven world, we find the most value in high-touch, personal interactions with independent producers. This year we will enhance our onboarding procedures to create a personal, individualized process that attracts and retains top producers. We plan to combine the latest technology—including online webinars and video conferencing—with face-to-face visits to build strong, high-touch connections with our newest producers.

In recent years we have established several key opportunities in ethnically diverse markets and expect these to grow in 2015. Throughout the last five years we have experienced tremendous growth in the Asian-American market, which now accounts for more than 30 percent of our business. Building on this momentum we launched our first video series on YouTube in 2014. Our Columbus Life Lessons series features Asian-Americans speaking about definitive life lessons in their native Chinese or Korean. While the videos provide an avenue for financial representatives and clients in Asian-American markets to connect, they also highlight insights and understanding applicable to anyone regardless of the language they speak.

All of these initiatives will allow us to better share the Columbus Life story and increase awareness of the Columbus Life brand among our current producers, new producers and consumers alike. At Columbus Life we believe we have one of the best stories in our industry—a heritage of building personal, high-touch relationships while being part of one of the strongest life insurance groups in the world as a member of Western & Southern Financial Group. We are fortunate to partner with accomplished producers who have stepped up to the next level of success at Columbus Life, and we strive to contract with even more top producers as we spread the word about Columbus Life as an elite carrier of choice.

Industry and Regulatory Trends and Challenges

As we look ahead to 2015, we are concerned about the historically low interest rate environment that has continued longer than many expected and which created pricing problems and profitability challenges.

Like other carriers in our industry, we constantly balance maximizing profitability versus growing and increasing sales. Our approach to meeting this challenge will be two-fold: 1) striving to ensure we have an appropriate balance of cash accumulation, current assumption and guaranteed UL premium, and 2) continuing to effectively manage our investment portfolio while looking for additional yield in the appropriate places.

We have always believed in providing a balanced portfolio without focusing on any one product type, and we believe this approach will continue to serve us well in the low interest rate environment. Additionally, we will look to broaden our interest-sensitive products by adding an indexed annuity to our portfolio. These two approaches will help provide diversification against market changes, deliver more options to clients and balance out our product profit sources.

Due to current budget deficits at the federal level there is constant discussion about tax reform, which will likely continue in 2015. How that will impact our industry remains to be seen, but one proposal by government leaders is a tax on the cash buildup in life insurance policies. Our industry should continue its collective effort to educate lawmakers on the implications of such a tax, and we believe this type of change is unlikely in 2015. However, we will continue to monitor discussions like this at the federal level.

Finally, as the demographics and concerns of American consumers change, our industry must also be prepared to adapt to modern priorities. The traditional “nuclear” family—defined as married husband and wife with children—continues to diminish. Current estimates indicate that as few as 20 percent of U.S. households fall into this category.² This may naturally reduce the need for the traditional benefits of life insurance and change the sales approach and value statements. However, other demographic changes, including the aging of the baby boomer generation and increased longevity for all Americans, increase consumer needs for retirement planning and sources of funds to meet medical challenges. Our products can help meet these needs through the other benefits we offer—cash accumulation in permanent products and access to funds for medical needs through “living benefits” riders.

Recognizing these industry changes and potential regulatory challenges, Columbus Life is well-positioned for growth in the years ahead. While maintaining our philosophy of high-touch relationships, we will continue to implement technological advances that make doing business faster and easier. Using our company’s compelling story, more superior products and financial strength, we will continue to grow the number of producers representing Columbus Life while striving to maintain the loyalty and productivity of our currently appointed independent financial professionals. But above all, we will continue to make decisions and begin new programs with independent producers in mind—putting producers first. [SJS]

Footnotes:

 1. iGO e-App is a registered trademark owned by and used with the permission of iPipeline.

 2. Source: U.S. Census Bureau, Current Population Survey, 2013 Annual Social and Economic Supplement.

 Columbus Life Insurance Company, Cincinnati, OH, is licensed in the District of Columbia and all states except New York.