Postmortem Blues

“Everybody wanna know the reason…without even askin’ why.”
—Albert King, Everybody Wants To Go To Heaven, Lovejoy, (1971)

It should be more than a hindsight rationalization. It must be more than a justification of expense. Sometimes it just seems like a child has wandered into the room and picked up a telescope and peered into a new reality from the wrong end. Consider this column a formal complaint. What we cannot escape is a market where the number of new participants each year has remained relatively constant. Frankly, for more than a dozen years it has not been merely static—it is calcified and stagnant. We continue to fumble with after-the-purchase analysis. In the last six years we have gone from 90 percent individual health insurance to 90 percent individual life insurance driving the sales bus. If we are ever going to get this sale off of dead center we must do a better job of asking the right questions about what has happened and what needs to be reformed.

Obviously our industry has engaged in trying to determine why someone might actually buy. The companies do engage focus groups to try to analyze potential buying behavior. Traditionally asking some version of, “What type of product or benefit would convince you to buy?” A cursory attempt is also made to determine what primary factors might influence a prospective buying decision. And the most obvious predisposition/glass ceiling: Cost is universally “sized” up. Price does matter and understanding the relationship between a known risk, a proposed value proposition and a commitment to buy lies at the heart of any possibility of ever getting sales to provide more protection to more prospective consumers.

What we do most times, however, is conduct a sales post mortem after the fact. This is always seriously contaminated by cognitive dissonance. Frankly, asking someone why they bought, or for that matter did not buy, is frequently an exercise in a self- fulfilling prophecy. For example, consumer research begins with the obvious why: “Did you make a wise financial decision?” Who among us would not come to attention and proudly proclaim their personal brilliance in that regard? Unfortunately, formal analysis then usually begins to justify its own predispositions. We had created a product to respond to perceived market need and it was purchased. Certainly it must have been because of the beauty and wisdom of its structure and intent. Let’s just consider our historical review of the obvious. “What was the number one reason (by survey) that someone bought?”

Beginning over 15 years ago the number one reason gleaned from consumer survey analysis was financial wisdom taking specific and definitive action to protect assets and legacies. Slowly but surely the truth just under the surface has begun the bleed-through. The sale most frequently comes from a personal and experiential confrontation with the real burden of caregiving. Forgive me for suggesting it could never have been revealed from any source other than those who actually make the sales. It is specifically the fear and recognition that the unpleasantness that they have witnessed in their own extended family could happen to them.

Could we possibly be asking the wrong folks about what happened or, more importantly, what needs to happen? We know that the largest billboard on the busiest highway will not sell long term care risk abrogation. This remains the toughest consumer sale to make and it continues to require personal effort and expertise. We have seen a very dramatic shift in the location of this sale. What we have not seen is any analysis of how, by whom, and under what circumstances these new sales are taking place. The so called LTCI specialist is on the endangered species list. Those financial advisors only very recently in opposition to traditional sales now seem to be leading the sales parade. Frankly troops, we need to know what the hell is really happening out there. How is the conversation now begun? How are potential product directions determined? Where is the most significant sales emphasis being placed? Is it a primary, contingent, incidental or supplemental sale? Not only is the product landscape changing, the vendor response is in major upheaval. Nursing homes and assisted living facilities continue to have falling occupancy. Not only is the public boarding up their front doors to remain at home, it may end up being customized versions of ALEXA and SIRI that become primary caregivers in that home. Even suggesting that technology would be our greatest weapon in this struggle would not have been on any one’s radar in the recent past. Home care has the only real opportunity to hold down cost and coincidentally it is what everyone would prefer. How is this new reality embedded into the sales transaction? In other words, please do not tell me once again how to count my chickens after they have hatched—particularly when you can’t even tell me the location of the hatchery!

Other than that, I have no opinion on the subject.

Ronald R. Hagelman, CLTC, CSA, LTCP, has been a teacher, cattle rancher, agent, brokerage general agent, corporate consultant and home office executive. As a consultant he has created numerous individual and group insurance products.

A nationally recognized motivational speaker, Hagelman has served on the LIMRA, Society of Actuaries, and ILTCI committees. He is past president of the American Association for Long Term Care Insurance and continues to work with LTCI company advisory boards. He remains a contributing “friend” of the SOA LTCI Section Council and the SOA Future of LTCI committee. Hagelman and his partner Barry J. Fisher are principles of Ice Floe Consulting, providing consulting services for Chronic Illness/LTC product development and brokerage distribution strategies.

Hagelman can be reached at Ice Floe Consulting, 156 N. Solms Rd., New Braunfels, TX 78132 Telephone: 830-620-4066. Email: