For years, this column has been a devotion and a sincere reflection of the passion for disability insurance held by the great W. Harold Petersen. I know Harold has deeply enjoyed his tenure, sharing his unfathomable knowledge and remarkable insights to the relatively misunderstood and often overlooked world of disability income protection. A true pioneer of the industry, he has relentlessly continued for many decades to promote DI in all its wonderful facets and teach new producers and their clients about the altruistic attributes of the market and the distinct importance of insuring one’s greatest asset, his or her ability to earn an income.
At the seasoned age of 89 years old, Harold Petersen has made the difficult decision to pass-on the writing of this column in order to spend more time with his darling wife Jacquie and their many children, grandchildren and great grandchildren. He remains Chairman of the Board of Petersen International Underwriters, but intends to spend some time away from the office pursuing other personal interests.
Harold is very appreciative of Stephen Howard and of Broker World magazine, and he knows the column will be in good hands going forward as very qualified and competent authors will provide expert insight in the months to come.
As we move on to a new chapter, it would be a grave mistake to lament and dwell on the past and not look forward to the future of this business. Harold Petersen has been a mentor of mine for many years, and he taught me to embrace history and learn from the missteps and successes of yesterday, but always be looking forward. Always be scheming, thinking and creating that next evolution in the DI business. Progress only occurs when you take a chance.
As we are all aware, technology plays a big hand in all aspects of modern life in this country and that is especially true of the financial world. In most insurance markets, we are seeing big business running globally with digital resources and continuously-improving automation. Many insurance lines are now capable of transacting business instantly with program platforms that quote, process applications, underwrite, accept payment and issue and deliver comprehensive insurance policies immediately by electronic means. Systems are becoming smarter and more user friendly by the day.
These industry advances are also taking hold in marketing and sales divisions, which in turn is allowing insurance companies to directly target clients of any demographic without the finesse and expertise of licensed insurance professionals. Fortunately for most of us, the DI market is somewhat of a different animal than its life and health cousins.
A spot-on adage that Harold Petersen reminded me of frequently in my early days in the business is that disability insurance doesn’t sell itself. Brokers and agents are the true heroes of the industry and are instrumental in its success. For it takes a seasoned advisor to, first, sell a prospective client on the fact that they are not impervious to illness or injury and, second, easily relate the sometimes complicated nuances of the proper DI policy. Some tech-savvy carriers and brokerage outfits have created online DI sales platforms for coverage with significant benefit and term limitations, but ultimately, the results have been mediocre at best. Only time will tell if a robust income protection product can flourish and be triumphantly marketed and sold without the guidance of a live insurance professional. In the meantime, the DI market’s best friend is still the learned and patient insurance agent.
As a result of advances in automation and claims administration, DI carriers are showing more proven success in marketing disability programs to the middle markets as well as lower income clientele. More Americans are being offered income protection than ever before, and, as market competition drives premiums lower, the industry has greatly benefited from a huge influx of new premium dollars. But there continues to be immense growth in the upper markets as well.
Where we are witnessing substantial growth and the most excitement in the market as of late is in the rapidly expanding “multi-life” simplified-issue business. Both domestic and specialty-market international carriers have embraced DI programs that employ simplified or even guaranteed-issue underwriting on groups with as few as three insured professionals. This type of insurance platform is quite alluring to prospects as there are usually no requirements of lengthy paper applications nor intrusive paramedical exams and lab tests. Furthermore, agents are finding it easier to get a foot in the doors of prospective corporate clientele because a program like this carries substantial group discounts that bode well for HR managers and company budget bottom lines.
These simplified-issue programs have blurred traditional market-sector boundaries and are being successfully sold by individual DI producers as well as the expected group DI producers and employee benefits producers. And that is the genius behind it all. These policies have found attraction along many lines and provide market-entry points to multiple financial specialist categories. No longer are individual DI producers left out of the multi-life action. I have seen an agent turn a single attorney DI sale into a multi-million-dollar guaranteed-issue sale on the attorney’s entire law firm; it’s not a rare occurrence either. The multi-life market is red hot, and it is the present and foreseeable future of this industry.
Whether it be new technology, simplified sales platforms or new insurance products, the current state of the income protection market is vigorous and progressive. The unknown of the disability industry is nothing to fear, so let’s continue on to the next chapter.