Tuesday, March 3, 2009

(No.17) the Insurance Industry's Mental Health-pt 1

After I started publishing The Canadian Journal of Life Insurance as a spare time and rather quixotic activity I would, when asked why I was doing it, sometimes respond by saying it was my contribution to the insurance industry's mental health. In retrospect I would not claim that it helped all that much.

I believed then, as I do today, that people in the business need to hear and consider ideas that depart from the industry orthodoxies so beloved by many members of life insurance company senior managements. Herewith a few examples relevant to the too widely accepted conventional wisdom these days:

-- Agency executives are expected to be so vocationally positive about meeting sales and related targets that it often threatens to make tenuous their hold on marketplace and distribution system reality while personal career management considerations promote the triumph of hope over experience.

-- One of the most pernicious ideas handicapping the effective operation of life company distribution systems (both career and brokerage) is spawned by corporate bean-counters, those corporate 'finance' watchdogs of so-called revenue-expense deficits: i.e., that too often their uninformed views of agency distribution have the effect of determining distribution strategy for the company even though it too often means following a ridiculous distribution system belief that, year after year, a company achieve more and more sales can be achieved with less and less support for the system.

-- One of the most dangerous aspects of the non-agency executive's typical ignorance of sales and distribution is not just that many don't really know an agent or broker much less have any feeling for agency distribution (although for too many that is the case) but that they seem so often to take for granted the sales engines that drive the business. 

I recall years ago writing an editorial or a memo (likely both) positing the premise that most life insurance executives thought the premium dollars flowing into corporate coffers were left on the steps of the  companies' head offices every morning by the sugar plum fairy.  


Alastair Rickard,