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    Guest Blog – Give Your Staff the Gift of a Great Education!

    Alliance Education Manager Andrea Litewski takes over the blogging chair to let you know about a great new learning opportunity that is now available for you and your staff.

    Andrea Litewski, Manager, Education

    Well, the holidays are officially here and there are only a few precious shopping days left. In addition to the holiday rush, how many of you are slammed at work finalizing planning and budgets for 2015? Why not “think outside the box” when planning your team’s professional development next year and give them the gift of high quality, professional education?

    I am not sure about you, but during the cold winter months it’s hard enough for me to even think about going outside, let alone spend a day traveling over icy roads in brutal wind chills to a conference or seminar. That’s why I am excited to let you know about a great new program that is available exclusively to Alliance members that will bring world-class professional development opportunities for you and your staff directly to your desk top in the warmth of your office or conference room.

    In September, hundreds of member society executives took advantage of the educational opportunities offered at the Alliance Annual Meeting. But for every executive that attended these offerings, we know there were hundreds more that could not join us in Austin. We want all of our member societies to understand that whether scheduling conflict, heavy workloads, society budgets or other reasons prevent members of your team from attending a face-to-face workshop or meeting, that the Alliance staff remains dedicated to providing you with opportunities to keep up with new concepts and understand new requirements in our ever changing business environment.
    OLC

    One of the best educational venues available for our member societies is the American Fraternal Alliance Online Learning Center. We have continuously improved the user experience for this resource which gives members access to workshops and presentations that you may have missed or would like to share with others at your society. Click here to take a guided tour of the Online Learning Center and see a brief sample of the great workshops that are available.

    Last week in, conjunction with your society’s dues invoice, the Alliance alerted you to a special program offer. When your society pays its dues, for just an additional $275, you can receive 24/7 access to all of the captured sessions from the 2014 Annual meeting AND the 2014 Mid-Year Meetings!

    A variety of subjects are addressed including:

    • Branding Our Business Model for the Next Generation of Members
    • Headwinds and Tailwinds for Fraternal Insurers
    • Innovating in the Field: The Agent Perspective

    Check out all the offerings by clicking here.

    At the Alliance, we take professional education seriously and hope that these offerings will provide a great low-cost way to provide development for you and your staff. Make sure your society takes advantage of this limited offer. In addition, please let us know how we are doing and what topics and types of courses you would like to see in the future.

    Data be the day

    Last week’s posting touched on the need for fraternals to use the information in their existing databases to help them become more effective, efficient, responsive and anticipatory organizations – making the hyper leap from serving members to actually knowing what financial service products and community service engagement opportunities will appeal to them before they do. If you are an Amazon customer – “If you liked this [book, toy, tool, gadget] you’ll LOVE this one!” – you know what I mean.

    data mining 4

    But many businesses struggle with what they want “Big Data” to do, how they utilize the information they already have, and how they collect the additional data they need.

    In my view, we want to be able to mine data to:

    • Identify your “best” members. To me, this means those folks with more than one of the following characteristics:
      • They purchase the bulk of their family’s financial services products from your society;
      • They are aware that they are a member of a fraternal and supportive of the society’s mission;
      • They are actively engaged in at least one fellowship or community service activity each year;
      • They hold a leadership role in your society’s local chapter system and/or your society’s governance structure.
    • Using this information, fraternals can create a profile of prospective “best” members, both from within the ranks of their current membership and among individuals who are not yet members of the society.
    • Provide more products and services to current members who want and need them (but may not know you provide them).
    • Identify your “worst” members. These are the folks who:
      • Own one small financial service product, maybe purchased for them by their parents or grandparents and haven’t a clue that they are a member of your society;
      • Own a small policy to keep their membership in place but purchase their “real” financial services from the guy across the street;
      • Wouldn’t have a clue that they are part of an organization with a well-defined community service mission and wouldn’t want to participate even if they knew.
    • Provide your executive management team and board with the information it needs to dramatically change your society’s strategic plan and the tactics you use to achieve it. Decisions based on accurate, timely, and meaningful data have a much greater chance of being successful than those based on “gut feelings.”

    The ties that bind…

    OK, so by now you’re totally sold on the idea of using “Big Data” in your society. Where to begin?

    One of the biggest obstacles to data mining is that the information in your files may not be connected. There are reams of information in your insurance database, but it in no way relates to the equally large stores of data in your community service activity files. And of course neither of these sources ties in to the information in your society’s membership database. Your ability to “connect the dots” and transform raw data into usable information to improve member service and the society’s bottom line is dependent on cleaning up these files and allowing them to “communicate” with one another. Hiring a data mining consultant may be your best option. For those societies who think that they may be too small to retain such a firm, consider collaborating with other societies that share similar characteristics and hiring a consultant to address the flaws common to all your systems.

    Once you’ve got the data in your various files tied together, you can start looking for trends within the membership or “clusters” of members, ranging from those highly engaged to those that simply send you a check for social membership dues. The final step in the process is analyzing and scoring individual members based on their level of engagement. Remember, not all data should be treated equal. Identifying the most important, complete, and relevant data sets will provide more meaningful and accurate results. But once you begin analyzing the information, I’ll bet the ranch that you’ll reach more than a few “a-ha” conclusions about your membership and your society’s ability to fulfill the needs of its members.

    For instance, you may discover that your local chapter meetings are attended almost exclusively by members aged 65 and older. And that while younger members WANT to take part in community service activities, their career and family obligations simply preclude them from doing so on Wednesday evenings from 7-9 p.m. Remember, timing is everything. How might your society change its activities to accommodate the needs of a younger demographic?

    You might also discover that it isn’t necessary – or realistic – to expect that a vast majority of your membership will ever physically participate in a community service activity. That doesn’t diminish the importance of those activities or the need to inform members about what the society is doing to fulfill its social mission. A member who is aware of these activities may be just as valuable – and profitable – as a member who attends every function.

    Measuring member engagement and establishing a correlation between financial services product purchased and participation in community service can establish the baseline for building a stronger, healthier, and more sustainable society – and that’s good for everyone.

    I’d love to know how your society is connecting its data dots. Please send me an email or post a comment here.

    Measuring “Engagement”

    One of the characteristics of the fraternal model in which we take great pride is the “engagement” of the individuals that comprise our societies. Our commercial insurance company colleagues have “policyholders.” That’s a rather sterile word that implies a transactional relationship between a business and an individual. I pay you a fee (in this case, a premium) and you provide me a product or service (in this case, a promise to pay a claim or benefit). It’s all very clear and, for the most part, very impersonal.

    Blog connecting

    For fraternals, the relationship between the organization and the individuals it serves is much more complex. First, we refer to the people who belong to the organization as “members” – a much warmer term that implies that the relationship is built on much more than the purchase of an insurance product. Moreover, since members are the ultimate “owners” of the society they should have an inherent affinity – whether based on ethnicity, religion, gender, or shared values – with each other and the organization. Such an affinity comes with a responsibility for members to be “engaged” in the organization. And such engagement could manifest itself in a variety of ways: through the purchase of a wider variety of products and services offered by the society; through awareness, support, and involvement in the society’s community service activities; and through participation in the governance of the organization as a delegate, committee member, or board member.

    So here are my questions:

    • Do your members know that they are “members” of your society or do they view themselves as “policyholders?”

    • Do they understand that membership not only “has its privileges” but also comes with certain responsibilities?

    • If the answer to both of these questions is either “no” or “I don’t know” (and I’m guessing that’s the case for many societies), then how can your society change this?

    Connecting the dots in your data can help you increase awareness of your society among its members, deepen your relationship with members, increase membership engagement in your society, enhance the quality and quantity of your community service activities, and drive additional sales of both insurance and “affinity” products (dental and vision care, financial literacy programs, legal services, travel discounts, etc.) to both current and prospective members.

    The notion of using so-called “Big Data” may frighten some fraternal leaders. Some may think it’s just a little too “Big Brother-ish” for them. Others may think that their society just doesn’t have the resources to harvest the seemingly random information they currently have about members into an organized and well-defined set of data points that can be used to make their societies more relevant and attractive to not only members and prospects, but to potential agents and brokers.

    I’m no expert on data mining, but I’ve been studying the ways in which my colleagues in the trade association world have applied it to their organizations. I think many of the concepts can be easily adapted to the fraternal model. In next week’s blog, I’ll discuss the methodology and attempt to create a framework for how you might use it in your societies. In the meantime, I’d love to hear from anyone who’s been doing work in this area, either on your own or with a consultant. Post a comment here or send me a private email at jannotti@fraternalalliance.org.

    Thanksgiving Choices

    Many people consider Thanksgiving to be their favorite holiday: no presents to buy, no outdoor decorations to hang in the frigid weather, no indoor greenery shedding needles that will continue to be vacuumed out of the carpet eight months later, no mandatory staying up late, and no noisy fireworks that drive the dog crazy. Truth be told, these probably aren’t the same people who are expecting 17 at their 12 person-maximum dining table, complete with Aunt Gertrude who always has an opinion and is not afraid to express it.

    Thankgiving Choices

    In a way, it’s another celebration of freedom of choice. Now, this may mean choosing what kind of stuffing (dressing?) to make, to brine or not to brine, sweet potatoes in addition to regular mashed? Do we really need rolls with all the other carbs we’re going to consume?

    But we were thinking more of this being a day of choosing to spend time with family and friends, in spite of all we know about them. Choosing to ignore petty differences in order to make familial memories that will last for years to come (Aunt Gertrude!). Choosing to celebrate the good given us and vowing to do more to show our gratitude in response.

    This makes it a pretty unique holiday. The idea has spread and has been embraced by many in the British Isles where “American Thanksgiving” has become a “thing.” The historical irony is not lost on us.

    This Thursday will probably feel like a Busman’s Holiday for so many of you. Feeding people? Check. Working to make lives better? Check. Knowing that a small act of fate separates us from that person in the homeless shelter? Check and check. How fortunate we are in the fraternal system to work with people in organizations where we get to celebrate the spirit of Thanksgiving every day.

    On behalf of the staff of the American Fraternal Alliance, we are proud to work for you and wish you and yours a truly blessed holiday!

     

    An Early Thanksgiving Gift

    Last week, I spent an afternoon with the Sons of Norway Board of Directors as part of a two-day orientation session for the organization’s incoming board members. My segment of the program covered two of the four modules in the Alliance’s Board Boot Camp – “The Role and Responsibilities of Fraternal Board Members” and “Hands On, Fingers Off.” Other components of the orientation session included presentations on legal, actuarial, and operational issues, as well as remarks from Harald Borrmann, President and CEO of Catholic United Financial and Chair of the Alliance’s Board of Directors.

    Sons of Norway web(O)

    The session was intended to provide incoming Sons of Norway board members with a firm foundation for their new roles and responsibilities, as well as a solid grounding in the principles of good corporate governance and a history of the fraternal system. For those continuing on the board, it provided a good refresher course on these key issues, and established a baseline for the newly constituted board to move forward with its duties. I’m sure at times it seemed to both the new and current board members that they were drinking from a fire hose — there was quite a bit of information given to them in a very short period of time — but based on the enthusiasm with which they approached the training session and the very positive comments they made about the program, it appeared to be well worth the effort for them as individuals and as a board.

    As I led the board members through the modules, I was impressed by their desire to stop and discuss how the points and principles about governance “best practices” could be applied to their society. They were duly proud of those areas in which Sons of Norway has improved its governance structure in recent years, but were not interested in sitting around and patting each other on the back over their victories; they were much more interested in talking about how they, as a board, could continue to enhance the society’s governance and contribute to further financial and fraternal successes.

    boot camp

    As I told the board at the end of our session, I was quite sure that I got as much, or more, out of the discussion as they did. It was incredibly rewarding to share time with a group of dedicated, qualified, and talented individuals who are tackling tough issues in a meaningful way. It was even more gratifying to know that the Board Boot Camp program that the Alliance has worked so hard to develop and improve over the last few years is genuinely valuable and appreciated by the members.

    These resources are available to all Alliance member societies.  Check out the Boot Camp offerings or send me an email if you’re interested in some board education, jannotti@fraternalalliance.org.

    Spotlight on Member Societies

    I’ve spent the last few weeks writing about politics, legislation, and regulation – everyone’s favorite subjects. This week I’d like to turn it over to the members and share a few stories with you about how they are affecting their environment, serving their members, and enhancing the quality of life in communities across the country…

    • Sons of Norway – This society is embracing the Alliance’s “Adopt-a-Member-of-Congress” program like no other. Check out the link to President Eivind Heiberg’s blogs to learn more about Rep. Erik Paulsen’s recent visit to Sons of Norway headquarters and see how one society can make an enormous difference in the debate over the future of the fraternal tax exemption. Thanks to Eivind and the entire Sons of Norway staff for this terrific effort!
    • Degree of Honor – Of all the member societies that attended “We Day” in 2014, Degree of Honor employees were the most enthusiastic about the potential for working with this group to improve the quality and quantity of the society’s fraternal outreach programs. DOH staff will be active participants in the 2014 “We Day” on November 12 in St. Paul, MN, and will be celebrating the fact that the society’s youth group, “Power of We,” earned admission to the event through their volunteer activities in the community. Take a look at this bulletin to learn more about how DOH is working with the “We Day” folks and whether such a partnership may make sense for your organization. I’m looking forward to hearing from Michelle Alberg later this week to hear how things went.
    • Modern Woodmen of America – This society took a headline (“When does 1 equal 76?”) from my blog posting on the study of fraternals’ economic and social impact in the U.S. done by Professor Phil Swagel of the University of Maryland and incorporated it into their congressional outreach program. Check out the cover letter that Modern Woodmen representatives sent to members of Congress with a significant number of society members in their districts. They supplemented the letter with state-specific information on Modern Woodmen fraternal and community service activities in the state, as well as with the executive summary of the Swagel study. Hats off to Jill Weaver for coordinating the extraordinary grassroots outreach campaign.

    Doing something you think others in the fraternal system should know about? Tell me about it by posting a comment here, on the Alliance’s Facebook page, or by sending an email to jannotti@fraternalalliance.org.

     

     

    Risk-focused exams – and their corresponding costs – are the “new normal” for all insurers

    I’m sure I’ve said this before, but if there is a model for how the relationship between insurers and regulators should work, it exists in Pennsylvania. It’s not always a love-fest – nor should it be – but insurers know exactly where they stand and what to expect from regulators in the Keystone State. This is particularly true – and important – for fraternals, because Pennsylvania has more domiciled societies than any other state.

    And the primary reason why the relationship works so well there is simple: Deputy Insurance  Commissioner Steve Johnson and the CEOs of the fraternals headquartered there work at it. If you’ve ever heard Steve speak –

    Pennsylvania Deputy Insurance Commissioner Stephen Johnson

    Pennsylvania Deputy Insurance Commissioner Stephen Johnson

    whether delivering formal remarks at an industry event or sitting next to you at dinner – you know he’s bombastic, opinionated and, as a result, first encounters with him can be a little frightening. But it doesn’t take long to get past that sometimes gruff exterior and realize that he possesses the characteristics that define an effective regulator: he’s fair; he’s honest; and he’s transparent – there are no secrets or hidden agendas.The Pennsylvania Fraternal Alliance invites Steve and his equally effective regulatory colleague, Annette Szady, to address its meeting each fall. You’d think this annual regulatory review would get old after a while, but it never does. In fact, it’s one of the more enlightening components of the Pennsylvania Fraternal Alliance meeting and I would highly recommend that every other state fraternal alliance schedule similar presentations with their state regulators.

    This year, Steve and Annette focused on the “new normal” of risk-focused exams – the much more thorough and much more expensive replacements for the every-five-year financial examinations conducted by state insurance departments. The Alliance has received more than a few comments and complaints about these exams from member societies in Pennsylvania and across the country – mostly focused on the fact that the exams are considerably more expensive (100% increases over previous exams are the average), take much longer to complete (months versus weeks), and seem to have few controls or incentives in place for regulators and/or out-sourced examiners to limit these time and cost factors.

    Because of the relationship that exists between fraternals and regulators in Pennsylvania, fraternal CEOs could raise these issues with Steve and Annette in a public forum without fear of “regulatory retribution.” That’s not always the case in other states. And while the answers they provided were not always what Alliance member society leaders wanted to hear, we all walked away with a better understanding of why risk-focused exams are necessary, as well as a commitment from regulators to work with insurers – commercial and fraternal – to do everything possible to limit unwarranted price escalation in the future.

    Here are a few of my most significant takeaways from Steve’s presentation:

    • Risk-focused exams are much more detailed and require much more work by the examiner. Comparing them to the old-style financial exam is “apples to oranges” in that risk-focused exams are “operational” and provide a look ahead at the future of the entire organization, while financial exams provide only a snapshot of the insurer’s fiscal health at a moment in the past. The resulting “look ahead” should be beneficial to both the society leadership AND regulators.
    • The Pennsylvania Insurance Department’s objective is not to play “cops and robbers” with insurers; it’s to foster an exchange of ideas that results in best practices that will lead to a sustainable business model so that fraternals can continue to provide benefits to their members and the communities they serve. Solid, solvent, and profitable insurance operations are essential to achieving that goal.
    • Fraternal leaders should take a close look at the NAIC’s risk-focused exam procedure before the examination process begins – you can access it on the NAIC’s web site. By familiarizing yourself with the process, you will have a better understanding of what’s expected from you and your board and will be able to reduce the time – and potentially the cost – of the exam.
    • Fraternal leaders should understand that “once you’re down, it’s hard to get back up.” The key to prolonged success is slow and steady growth, combined with reduced (or at least controlled) expenses. If you can’t realistically make those things happen – and a risk-focused exam will go a long way to providing answers to those questions – it’s time to consider other options, including mergers.

    Feel free to add your comments below or contact me with any questions.

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