Last week, I attended the biennial meeting of the International Cooperative and Mutual Insurance Federation (ICMIF) just up the road in Minneapolis. This was one of the first large scale ICMIF meetings held in the U.S. in the recent memory and I couldn’t pass up the opportunity to experience a virtual “United Nations of Insurance” event (right down to the real time remote translation devices on each table!).
While there are a handful of U.S. and Canadian insurers – including one fraternal – that are members of ICMIF, the bulk of their mutual and cooperative insurers (business models that are kissing cousins to fraternals) are domiciled in South America, Europe, Africa, and Asia. ICMIF members include life, health, and property/casualty insurers. Some are very large, others smaller than the smallest fraternals – micro-insurers, really, helping individuals in developing nations protect their families and businesses as they build the foundation of emerging economies.
The Alliance and ICMIF have a solid working relationship, exchanging information on regulatory issues affecting fraternals, mutuals, and cooperatives (if you think state regulation is complex, you should take a look at the global regulatory schematic handed out at the ICMIF meeting!). And it wasn’t surprising to learn that whether they are doing business in Kenya, Kyoto, or Kansas, the challenges and opportunities facing insurers are not that different – over-regulation, low interest rates, and those confounding millennials.
One presentation that particularly struck me was conducted by Mike Pritula, a Director of McKinsey and Company and a leader in the consulting firm’s insurance industry strategy practice. He highlighted five “management imperatives” that should be top of mind for every CEO. Here they are:
1) You must continually grow the business – While technological advances make it more feasible for smaller companies to compete with larger ones, scale in the financial services business is still important. Standing pat or slowly losing members/policyholders is not a recipe for success.
2) You need to be more technologically savvy – You don’t have to become a computer geek, but you’d better be familiar with how the consumers of your product use technology and how you can make it work for you.
3) You need to take a more quantitative approach to business due to the sheer explosion of data – Prospective members have access to more data about you, your company, and your products than ever before in history. That changes the balance of power in the sales process. Likewise, you have access to more information about your members and can utilize that to enhance the type of products and member service experience you provide. If you don’t, someone else will.
4) You need to be more efficient – Make sure you are running the company for the benefit of the members, not the board, the delegates, the employees, or anyone else.
5) You need to understand your customers better than ever and better than anyone else – This is the bedrock advantage of the fraternal “common bond.” We should have a built-in affinity that provides us a competitive advantage with prospective members who share our organizations’ values.
It seems to me that if you accomplish numbers 2-5 you will almost inevitably accomplish the number 1 goal – membership/policyholder growth. This “growth problem” is not unique to the fraternal community. Every life insurer is struggling to find the solution to steady growth. And interestingly, most large U.S. life insurers view “emerging markets” – those very same areas where most ICMIF members do business – as their best growth opportunity.
But since fraternals are virtually landlocked in North America, let me ask you once again: What is your society’s emerging market? Share your thoughts here or in an email to me at email@example.com.
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