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    A Whole New Resource for SFA Leaders

    Alliance-Social-CommunitiesThis week, the Alliance rolled out an all new package of resources designed to make life just a little easier for the volunteer leaders of State Fraternal Alliances. The wide ranging array of information is posted on the Alliance’s web site’s State Fraternal Alliance Community making it more convenient for SFA leaders to both access the data and documents posted to the resource center, and to share ideas and anecdotes about effective SFA organization and management. (Your email is your ID for the log-in and Password1 was the introductory password.)

    The resource center includes items such as:

    • IRS documents regarding exempt requirements and business activities of 501(c)(6) organizations. All incorporated SFA’s should be organized under this section of the U.S. Tax Code and those that are not incorporated – or that have not renewed their corporate filing – should operate under these provisions.
    • IRS resources (webinars, phone forums, and subscriptions) providing a wealth of information about compliance with non-for-profit organization regulations.
    • Filing tips and instructions for Form 990-N
    • Rules and regulations on fundraising campaigns
    • Background information on Unrelated Business Income Tax (UBIT) exposure

    And the list goes on…

    The Alliance compiled this data and placed it in a central location to provide SFA leaders a “one stop on-line shop” for all their information needs. Since SFA leaders are all volunteers and officers and board members rotate frequently, we thought it important for the Alliance to offer a clear and consistent source of information that can be counted on by SFA leaders for years to come.

    I’d appreciate your feedback on the SFA Resource Center after you’ve had a chance to review the content. Please let me know how we can improve the organization of and access to the on-line materials, and help provide SFA leaders more and better information to manage their organizations.  Post a comment here or send me a private email at jannotti@fraternalalliance.org.


    Alliance social networks: a place to share information – and stir the pot…

    Every day more fraternal executives are using the Alliance’s social networks to share ideas and information on topics from corporate governance best practices to community service activities and everything in between.  9_Social-Networking-1024x682

    In case you didn’t know, the Alliance hosts 23 social networks on its web site.  They are shared interest groups composed of CEOs, actuaries, fraternal directors, compliance staff and others.  They are a cool, modern, dare I say, a “millennial” way for members to communicate with each other without setting up meetings or teleconferences.

    Associate Members of the Alliance are also active participants on these networks.  Allen Bailey, the CEO and Founder of Allen Bailey and Associates, an actuarial and consulting firm that works with more than a dozen Alliance members, has pioneered a new use for these social networks – stirring the pot and stimulating conversation on topics that many within the fraternal community choose to ignore. Issues like unnecessary insolvencies and their impact on certificate holders, the society itself, and the reputational integrity of the fraternal system.

    Allen – an individual who has earned a well-deserved reputation for both integrity and outspokenness – tackles all these issues in a White Paper he recently posted to our social networks entitled “Preparing for Failure.”  Whether you agree or disagree, whether you think they apply to your society or not, Allen’s views on the current financial woes of one small society and the potential for a rapid downward spiral of other fraternals (not all of them small) are worth reading. 

    The Alliance Social Community can be found on the Alliance website under the Member Center tab which appears once you log in with your ID of your email address and, unless you have changed it, the introductory password of Password1. To download it, join the Fraternal and Communications group and go to Resources, where Allen posted White Paper: Planning for Failure. (Click here for a step-by-step guide to the Fraternal and Communications Group.)

    You can share your thoughts on the paper by posting a comment here, or sending me a private email at jannotti@fraternalalliance.org.  You can also discuss them with the folks from Allen Bailey and Associates at the Alliance’s 2015 Annual Meeting, September 10-12, in Indianapolis. 



    Special Bonus Guest Blog – Alliance Workshop Speaker Spotlight

    Litewski newToday, we are taking another opportunity to give you a brief preview of one of the exciting and important workshops that will be presented at the upcoming 2015 Alliance Annual Meeting in Indianapolis. This session will cover a topic that we all need to know more about in order to remain relevant in the insurance industry: Are Online Sales in Your Future? (Hint: They’d Better Be).

    Our speakers for this session will be Doug Baker, President & CEO for Teacher’s Life, and Kevin Pledge, CEO of Acceptiv. I recently had the opportunity to catch up with Doug and Kevin and ask a few questions about some of the material that their session will cover. Here’s what I learned…

    AL) Can you describe what digital disruption looks like in the life insurance industry?

    DB & KP) This disruption is really being driven by what consumers are demanding and how they want their insurance delivered. Property and casualty and health insurers have been selling policies in the online space for the past several years and it’s time for life insurers to catch up. Our companies need to remove the misconception that life insurance has to be sold by an agent.

    AL) What are some of the barriers to innovation?

    DB & KP) As with most organizational change, sometimes the biggest barriers are the organizations themselves. The change required for the move to online sales really begins at the top of any organization. Leaders, managers, etc. must be open to new ideas. To answer the question of why we do things the way we do with ‘we’ve always done it that way’ is not acceptable.

    online insuranceIn order to be successful in the marketplace of the near future we need to create environments that have the freedom to be creative within certain boundaries to be productive. We also must embrace ‘screwing up’ (making mistakes are not the end of the world – we all make them.)

    To be sure, there are insurance-related challenges to moving online, channel conflict in your distribution system, product complexity and understanding the bigger picture all present obstacles that must be addressed.

    At the end of the day you have to embrace the changes. Take, for example, Blockbuster.  They knew digital disruption was coming to their business, but they didn’t want to change until it was too late and Netflix essentially put them out of business.

    AL) Who is likely to purchase online – is it just Millennials?

    DB & KP) Everyone. Millennials are the largest consumer of digital data but all ages shop online – this has been shown by Amazon and other online retailers.

    AL) What do you think are common misconceptions made by insurance companies regarding life insurance consumers?

    DB & KP) There are many. The most common misconception made by life insurance companies is the assumption that consumers want or need to buy from an agent. Some consumers just need to understand for themselves what they are getting in a certain product and are ready buy it themselves. No, this is not everyone, but clearly it is a large number or there would not be a $20T coverage gap in the U.S.

    AL) What do you see as the biggest opportunity for fraternal benefit societies?

    DB & KP) Digital delivery levels the playing field. Small societies can compete with much larger organizations in a digital world. They will have the ability to reach their audience more effectively and efficiently.

    AL) What are the key factors in developing an online presence?

    DB & KP) One of the key factors is finding the right partners. New technologies and new approaches require new expertise – whether it is the software, marketing or increasingly cybersecurity. The digital space is a rapidly evolving area that requires expertise. For many insurers, finding a good reinsurer to share the risk is important for financial support. Simply putting a paper application online is not going to cut it.

    I want to thank Doug and Kevin for taking the time to give us a glimpse of what we can expect to learn in their session at this Annual Meeting, to be held September 10-12, 2015, in Indianapolis. You still have time to register for the event which will include this and six other great, timely workshops, great speakers and hundreds of your fraternal colleagues from across the country. Click here for all the details.

    The Days of Miracles and Wonder

    miraclesThere are times in the dog days of August where just getting out of bed and getting to work seem like a challenge. The surges of excitement and energy that the Alliance’s Annual Meeting provides me are just a few weeks away, but getting from here to there can harsh my buzz. And then, just when it seems like I can’t find one more idea for a blog posting, Alliance member societies come through with innovative and inspiring activities that lift my spirit and remind me why I love what I do for a living. Here are just a few of the most recent examples that members have shared with me:

    • While at a recent meeting with Michigan Department of Insurance officials, Woman’s Life CEO Chris Martin told regulators that the organization was founded by women in the 1880s because, up to that point, women had been considered “uninsurable” because they so frequently died during child birth. A few decades later, Woman’s Life played a key role in securing women’s suffrage. After hearing that story, I spent the rest of the week on top of the world knowing that I had the privilege of representing a society that is a pioneering force in American society.
    • GBU Financial Life is kicking off a new charitable giving program called “Making a Difference Once Member at a Time.” GBU will make a $25 donation for each new life insurance certificate or annuity contract purchased. Members will be able to select the organization that received the donation from one of eight GBU-approved charities. What a great way to tie financial security and support for worthy causes – two cornerstone principles of the fraternal system – together. Click here for the donation form.
    • Royal Neighbors of America CEO Cynthia Tidwell was among “25 Super Successful Leaders” from a wide range of industries who were asked to provide advice to millennials in a recent issue of Inc. magazine. Nice to see a fraternal executive included in this distinguished group of business leaders. Moreover, her succinct counsel can be applied to almost every Alliance member.
    • Western Fraternal Life’s “Kids Against Hunger” food packaging event was recently featured on local television . The event, held in conjunction with the society’s convention (how’s that for a way to inject new life and purpose into such a meeting!) brought together members of all ages and reportedly inspired several local chapter leaders to do similar projects in their communities.

    Need more innovation and inspiration? Check out this video that highlights some of the presenters at the 2015 Annual Meeting’s “Innovation Forum.” There are no “buzz harshers” in this group. I can’t wait to see these young professionals in action. If they are the future of the fraternal system, we’re in good hands.

    Want to share a little inspiration with your peers?  You can do so by attending the Annual Meeting.  And you can also post a comment or a link to here or on one of the Alliance’s social networks.  See you in Indy!


    Living in the Future

    futureDon’t know if you read the article on “the 20 most creative people in insurance” in the July 30 edition of LifeHealthPro.com, but I thought it was fascinating.  It contained interviews with 20 creative thinkers from all aspects of the industry, including some you probably know and some you definitely don’t.  I focused my attention on the final question asked to each of them: “How do you anticipate the industry will evolve in the next ten years?”  Here are my favorite responses:

    • “The modes of distributing products, the very products themselves, and the expectations consumers place on their insurance companies will see large-scale changes in the years ahead.  There are massive opportunities for those willing to…take advantage of those changes.”

    • “Technology will drive change from how policies are created to how they are issued and modified.  We anticipate eventually removing the need for a medical exam altogether.”

    • “The intersection of technology, wealth management, and the fee-based distribution channel is driving the evolution of our industry.  Technology is important, but in the end people still want to talk to people.”

    • “The dramatic revolution in technology will cause commoditization in many areas, including insurance product development.”

    • “There will be a mainstreaming of models that enable self-selecting groups to start their own insurance pools versus buying into traditional insurance companies.”

    • “The successful financial professional will offer more holistic service  focused on relationships, communication, and transition management.  The industry will move away from a focus on sales.”

    • “The way in which clients use insurance products will quickly change. The way in which products are distributed has to change.”

    • “The future for acquiring valuable customers will be created from social discovery services.”

    • “Agents who get on board now with digital marketing strategies will lead the field.”

    • “Consumers will have instant access to insurance products and the industry will become more flexible.”

    • “More virtual underwriting.”

    • “How to use technology to get advisors in front of highly qualified prospects will be the biggest change.”

    Technology, distribution, technology, distribution, technology…  Do you sense a pattern here?  More importantly, do you have the candle power and financial assets to invest in the technology and distribution mechanisms that seem likely to decide the winners and losers in tomorrow’s marketplace?  If not, are you looking for ways to acquire those resources through mergers, acquisitions, partnerships, or strategic alliances?

    Just asking…

    PS: At the Annual Meeting, we’ll be creatively addressing a lot of these futuristic opportunities through our speakers and workshops.  Check it out.

    Is your society a house divided?

    One of the most appealing characteristics of the fraternal model to the younger consumers is our commitment to securing their members’ financial futures while at the same time helping them to improve the quality of life in their communities.

    The notion of a not-for-profit financial services organization that is built to do good things – rather than doing them to be seen as a “good corporate citizen” or to secure a generous tax deduction – is a real bell ringer for Millennials, Gen X’ers, and even Baby Boomers.  And demonstrating the cohesiveness of the connection between fraternal and financial is absolutely critical if these younger consumers are going to be convinced that our business model is authentic.

    I’ve been in meetings with more than a few society management teams and boards, however, where it is clear that the fraternal and financial sides of their operations are not only disconnected, but they compete against one another for the society’s often limited human, technological, and financial resources. Similarly, I have received many annual reports from our members that do not even mention the fraternal side of their operations. This focus on the financial side in a public-facing publication makes it more difficult for the reader to differentiate between a fraternal and a commercial insurance company. Why not celebrate in your annual report how the financial side drives the community service?

    A house divided against itself cannot stand.  I think Abraham Lincoln said that.  House divided
    A fraternal whose community service activities don’t reflect the shared values of the volunteer participants and whose financial services products don’t align with the best interests of the members will quickly become irrelevant to both. I said that.

    The secret to success, it seems to me, is in weaving the fraternal and financial threads of our operations – starting with the home office, extending to the field representatives, and including the local chapter system – so that they form an indistinguishable bond with one common mission. You can’t run a life insurance company and “bolt on” a community service component.  Likewise, you can’t run a charitable organization and “accessorize” it with a financial services company.  Successful fraternals combine both seamlessly.

    Being a fraternal life insurer is much more difficult than being a commercial life insurer.  Fraternal executives and boards have to excel in the financial services arena – from product design and distribution, to customer service, to compliance with increasingly complex regulations, to the technology needed to address each of these functions.  Moreover, they have to excel in the fraternal arena – from finding ways to engage members in meaningful service projects, to identifying worthy causes to fund, to providing members with an array of benefits beyond an insurance policy that helps them live healthy and generous lives.

    If being a fraternal was easy then MetLife, Prudential, and Northwestern Mutual would have signed on to the model long ago.  We’ve all chosen the more difficult path.  But let’s not make it more challenging than it already is by competing within our own societies.  Got a great story about how your society is linking fraternal and financial operations?  Share it here or send it to me in a private email at jannotti@fraternalalliance.org.

    Special Video Guest Blog – If Millennials are the “Golden Ticket” Annual Meeting Speaker Cam Marston Can Show You How to Grab It

    Millennials are well known for using the latest and greatest tools for managing their lives – whether it’s paying and organizing their finances with Venmo, or tracking their daily fitness routines with Fitbit. It’s all about staying innovative, finding easy ways to multitask and seeing immediate benefits. Unfortunately, according to Money Magazine, when it comes to thinking about the long term, millennials are the most underinsured generation alive today.

    goldenticketNow this should come as a surprise to absolutely no one. According to the Alliance’s own “Under 35” Consumer Research Study, most members of our focus group “were burdened with heavy student loan and credit card debt. Discretionary spending was limited as day-to-day expenses kept most living from paycheck to paycheck.”

    Given all of this, why then do insurance companies look to capture this generation as some kind of “Golden Ticket?” The answer is simple…size. At 77 million strong, Millennials are the largest generation since the baby boomers and as the boomers begin to retire and die off, insurers need to replace them with fresh faces from Generation Y. How to accomplish this is proving to be a challenge to all insurers.

    In order to help you with this vexing issue, the Alliance has invited Cam Marston, a leading expert on the impact of generational change and its effects on the marketplace, to share his knowledge with us at the upcoming Annual Meeting. We have asked Cam to provide us with a guest video blog and are thrilled to share it here with you this week.

    I want to thank Cam for taking the time to give us a glimpse of what we can expect to learn in his presentation at this Annual Meeting, held September 10-12, 2015, in convenient Indianapolis. You still have time to register for the event which will also includes seven great, timely workshops and hundreds of your fraternal colleagues from across the country.

    I look forward to seeing you in Indianapolis.


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