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    Grab Bag…

    Grab bagThis week’s posting is a smorgasbord of tasty treats culled from a variety of news sources.  I wanted to share them with you before they got stale. Enjoy…

    Think fraternals aren’t innovative?  Think again.  Royal Neighbors’ “Promise Plus” was named Most Innovative Product by National Underwriter Life & Health.  Click here to learn more about the product and how it ties in perfectly with Royal Neighbors’ mission of empowering women…

    By 2025 – just 10 short years from now – millennials (the generation born after 1980) will make up 75% of the world’s working population.  No wonder businesses are pulling out all the stops to attract these consumers.  Click here to read a piece written for “Voice” magazine (the official publication of the International Cooperative and Mutual Insurance Federation) by Matthew Crowley of Thrivent Financial on why millennials are so important to the future of your society and how we can make our business model work for them…

    Consolidation among fraternals is happening and will continue to happen.  It’s an inevitable evolution in our sector of the business – a business that requires economies of scale in order to invest in technology, distribution, and product development needed to reach the millennials described in Matthew Crowley’s article.  But consolidation isn’t limited to fraternals. Check out this article outlining the four key reasons nonprofits should consolidate – and some of the major obstacles to consolidation – and see if any of them ring a bell for you…

    The women’s market for life insurance is big, lucrative, and underserved, according to Michael Ross of Cornerstone Financial Group.  And if you remember, the results of the Alliance’s consumer research shows that the fraternal model has an exceptionally well-defined appeal to women.  Are you letting your field force know about this?  Need a copy of the survey results to refresh your memory?  Just email me at jannotti@fraternalalliance.org and we’ll send them to you.

    Words That (Just Might) Work

    I spend a good bit of time trying to come up with ways to explain “who we are and what we do” to folks who have never heard of a fraternal (which is just about everyone on the planet).  After reading The Language of Trust, a terrific book on “effectively communicating to a nation of skeptics,” and listening to a group of Alliance member society executives describe the attributes that differentiate their societies from other financial services organizations, I was inspired to brush up my “elevator speech.”  I want to test out these messages on you to see if they accurately reflect what we’re all about.  I welcome your comments – especially those that can improve these words to make them work a little better for all of us.  Please post them here to share with all readers and start a dialogue on this topic, or send them to me privately at jannotti@fraternalalliance.org.

    elevator-pitch
    • A fraternal is a different kind of life insurance company.  They are cooperative organizations, owned by and accountable to their members.

    • Fraternals are not-for-profit financial organizations. Unlike traditional insurance companies, they return the proceeds from the sale of life insurance, annuities, and other financial products to their members by funding charitable organizations and local community service efforts that reflect the shared values of those members.

    • Fraternals are not driven by reporting quarterly profits to Wall Street.  They are focused on securing their members’ long term financial security and helping them to live more generously.  By providing direct financial support and assisting members to conduct meaningful volunteer activities, fraternals improve the lives of their members and the communities in which they live and work.

    • Fraternals are not for everybody.  The fraternal cooperative concept may not appeal to individuals involved in sophisticated investments like arbitrage and hedge funds.  However, for individuals who are looking to save for their children’s college tuition, fund a comfortable retirement, take care of their families in the event of a breadwinner’s death, and have a genuine interest in improving the lives of others, fraternals may make an excellent alternative to traditional, for-profit insurance companies.

    • Fraternals offer financial services products that most consumers can understand and appreciate.  What’s more, they have a 125-year track record of fulfilling their promises to members.  Fraternal life insurers offer products that reflect the qualities of the members themselves: plainspoken, honest, unpretentious, and reliable.

    • Fraternals unite individuals with shared values.  They make a positive impact in their local communities by organizing volunteer projects and making direct financial contributions to causes and charities supported by their members.  Many members choose to lead or participate in local volunteer projects that provide a helping hand to those who need it most.  Participation in these activities is optional and flexible.  Every member makes a difference simply by purchasing an insurance product from a fraternal, because a portion of the income from insurance sales is used to fund financial contributions to organizations and facilitate volunteer projects that reflect the shared values of the members.

    Again, please share your thoughts here:

    The Best of Joe

    Joe Annotti is out of the office and blogging this week will be light. In his absence, we’re running a variation of one of his past blogs that has a message that is always appropriate at this time of year! (Note…we updated it a little.)

    The Alliance Annual Meeting: You Know You’re Going to Register, So Why Pay More by Waiting?

    In planning the 2015 Alliance Annual Meeting, we decided to really raise the bar on the educationaljwmarriott shorter program. It’s not that we don’t think that we’ve done a good job in the past, (the evaluations tell us that you’re already pretty happy) but we wanted to look at the program holistically and make sure that there’s something for everyone. So this year, we have developed a blockbuster line-up of workshops with something for folks in the C-Suites, Board Members, “frat commers”, and sales and marketing folks. This meeting is going to knock your socks off!  That’s a promise. You’ll walk away from this event a better leader thanks to the insights provided by keynote speakers Scott Stratten and Cam Marston. Your board members and executive team will come back better informed and better equipped to deal with issues such as:

    This year, we have also added the Innovation Forum where you can get great new ideas and learn from the best…your fellow Alliance members. Finally, we’ll wrap things up with a great band and a great time at the Saturday “Fraternal 500” Party.

    Come on, you know you’re going to register. And by doing so before July 17, every one of your society’s board members and executives will save $100 on the registration fee. Compare the value of attending the Alliance’s Annual Meeting – the only conference that brings together North America’s top fraternal leaders to address fraternal-specific opportunities – with other industry trade groups’ meetings. I think you’ll agree that at $675, it’s the best education and entertainment bargain in the business. And don’t forget, your young professionals receive an extra $100 discount, but only until July 17. Registration couldn’t be easier – just a few clicks and you’re signed up. Or call (815) 338-9668 for assistance in registering larger groups from your society.

    PS: Known as the “Crossroads of America,” Indy is within a day’s drive of over half of the country’s population. For example:

    Cleveland – 317 miles

    Chicago – 183 miles

    Detroit – 282 miles Milwaukee – 279 miles

    Minneapolis – 592 miles

    Pittsburgh – 360 miles

    Getting here is easy! Don’t miss this meeting!

    Let us know if you have any questions and we will see you in Indy this September.

    More Than Millennials

    Almost every fraternal has devoted more than a little time, energy, and effort discussing how to attract more Millennials (the generation born after 1980) to the cooperative financial services model.  And that’s important because Millennials represent the largest group of consumers in the U.S. and Canada – large enough to fundamentally change long entrenched concepts of hiring, work/life balance, marketing strategies, product development, and customer service.

    del boca vista

    But they’re not the only group out there that fraternals should be thinking about.  Boomers – those born between 1946-1964 – are either rapidly approaching retirement or are in their early years of retirement and are looking for ways to make sure their money lasts as long as they do.  And they are lasting longer.  A person turning 65 in 2015 can expect to live more than 5.5 years longer than one who turned 65 in 1950.  Moreover, many of these folks are not the type to move to “Del Boca Vista Phase 2” and never be heard from again.  Nope, as a recent Wall Street Journal article pointed out, they want to “add life to longer lives.”

    seniors volunteering2

    There may be no better match for fraternals than these engaged and enthusiastic elders.

    Take a look at just a few of the suggestions from the WSJ article:

    • Make the transition as easy as possible – Afford people the time and space to move to what’s next.  Faith-based efforts, not necessarily focused on a specific religion, but a shared spirituality (remember, most Boomers were children of the 60s and 70s) can help individuals navigate the passage “from success to significance.”  And isn’t making a significant contribution to improving your life and the lives of others one of the cornerstones of fraternal membership?

    • Figure out how to finance the bonus years – Financial services companies could provide a great service by helping Boomers find new “pathways to un-retirement, funding further education…and savings vehicles for retirement itself.  Doing so promises a win-win; helping individuals bolster their finances…while also enabling society to realize the talent windfall present in the older population…”

    • Get creative people thinking about how to improve our extra years – How about coming up with incentive based programs to develop ideas that do the most to increase the productivity and contributions of older people to society.

    One of the criticisms of fraternals is that we have “an aging demographic.”  Let’s flip that around and turn it into a strength.  After all, it’s a good bet that all those Millennials are going to live even longer than the Boomers.  So the programs we put in place today will become even more valuable to future generations.

    Got an example of an innovative way your society is tapping the resources of its Boomer members?  Please share it here…

    In the Spirit of the Season

    It’s graduation season and that means that every ceremony – high school, college, trade school, or reform school – has a commencement speaker.

    robert-deniro-1-800

    I’ve listened to a few memorable commencement addresses over the years.  Former Presidents Bill Clinton and George H.W. Bush added more than a little inspiration to the Tulane University graduation ceremony just months after Hurricane Katrina nearly washed away New Orleans.  And I’ve endured more than my fair share of clunkers – like the speaker at my own college graduation whose name, title, and sage advice have long been forgotten.

    But my absolute favorite speaker was a journalist (don’t ask me his name because that memory has also faded; are you sensing a pattern here?) who addressed my brother-in-law’s college graduating class a little more than 20 years ago.  After the most inane speech by a valedictorian that I have ever heard, (the overriding message being that “things aren’t going to change that much for us graduates because we have all worked so hard to obtain our degree”) the journalist walked to the podium and said:

    “I beg to differ with the comments offered by the previous speaker.  I think you will find that your life is going to change significantly in the near future.  From now on, Thanksgiving is a Thursday; Christmas is December 25th; and summer is the time of year when you go to work and it’s hot outside.”

    Game.  Set.  Match.

    I’m sure you’ve probably been to a graduation ceremony that featured a great speaker or a memorable zinger.  I hope you’ll share it by posting your favorite commencement comment right here.

    Thanks, Captain Obvious!

    First, let me say that Captain Obvious – the spokesperson on those subtly funny Hotels.com commercials – is one of my heroes.  Upon viewing a particularly filthy, vermin-infested hotel room, he casually points out to the family that has booked the room that “I would not stay here tonight.”

    Captain Obvious

    Doug French, a managing principal of Ernst & Young, did his best Captain Obvious impersonation at the Canadian Fraternal Alliance Section Meeting earlier this month in Ottawa.  Doug went through a variety of facts and figures about demographics, insurance products, distribution systems, and insurance company operations.  But at the heart of his presentation were his concluding points:

    •   Embrace the internet.  Customers are connected, digital, and engaged.  If you’re not, then your organization is irrelevant.

    •   Don’t swim against the demographic tide.  Two groups really matter:  millennials and boomers.  If you can’t find a way to connect with them, your future is not particularly bright.

    •   Learn about and get to underserved markets.  They still exist and could be an excellent niche for fraternals.

    •   Be realistic about changes to the “advice model” of selling life insurance and realize that there are viable alternative distribution channels.

    •   Encourage experimentation and celebrate failure.

    Nothing up there should surprise you and you’ve probably heard every one of those suggestions at least once in the past five years.

    The item that really struck me was the final one – “encourage experimentation and embrace failure.”  While many companies across all industries pay lip service to this notion, few actually implement it.  Within the fraternal community, the concept is rarely applied.  And it’s not just because we are set in our ways or restricted by antiquated governance structures, although that certainly has something to do with it.

    Based on my keen grasp of the obvious, many fraternals a) don’t have the financial resources to invest in experimentation (whether it involves alterative distribution models, new product development, branding initiatives, local chapter reorganization, or community service outreach); and b) simply can’t afford to fail (because one wrong move could mean the end of the road for the organization).

    That leaves many fraternal leaders with only one choice: keep doing what we’ve always done.  That “strategy” will almost certainly produce a long, slow glide path toward obscurity for the society.

    As Captain Obvious might say, “That’s not a very good solution.”

    So what can societies that cannot afford to “encourage experimentation and celebrate failure” do?  Find a partner with similar goals.  Build a society that is relevant to consumers both in terms of financial services and community outreach – one that delivers real value to members and contributes to the social health of the communities it serves.  Combine your resources with another organization in a way that allows you to achieve your common missions.

    You can call it a strategic alliance, a partnership, a merger, a consolidation, or an amalgamation – a rose by any other name, so to speak – but these types of relationships simply have to happen if the fraternal system is going to evolve and remain the powerful force for good that it has been for the last 100+ years.

    Obvious?  Certainly?

    Difficult?  Incredibly.

    Necessary? Undoubtedly.

    Taking Parliament Hill By Storm

    Last week I had the pleasure of attending the Alliance’s Canadian Section Annual Meeting in Ottawa, Ontario.  This year, for the first time ever, the CFA incorporated a “Day on the Hill” component into their meeting.  And the results were nothing short of spectacular.

    Thirty-six CFA members, organized into delegations of 3-4 members each, swarmed Parliament Hill on Thursday afternoon.  The groups met with more than 20 Members of Parliament (MPs), many of whom held key positions on the Insurance Caucus and Finance Ministry.  The objective of the meetings was to increase awareness of Canadian fraternals and the good work they do in every province and territory.  And, judging by the feedback from MPs, they accomplished our goals and then some.  The frosting on the cake came later that afternoon when Peter Braid, an MP from the district where FaithLife Financial is headquartered, read an official statement in support of fraternals during that day’s Parliamentary “question and answer” period.

    (L-R) Terry McGoldrick, Sons of Scotland; The Honourable Ralph Goodale, PC, MP; Doug Baker, TeachersLife; Tammy Barclay, Toronto Police Widows & Orphans Fund; Clayton Orne-Zalusky, Worden Actuarial & Benefits Consulting

    (L-R) Terry McGoldrick, Sons of Scotland; The Honourable Ralph Goodale, PC, MP; Doug Baker, TeachersLife; Tammy Barclay, Toronto Police Widows & Orphans Fund; Clayton Orne-Zaluski, Worden Actuarial & Benefits Consulting

    Congratulations to the CFA members that participated in this event and laid the groundwork for an expanded advocacy program for Canadian fraternals in the future.

    Not to be outdone by the political portion of the program, the CFA Advisory Council put together an outstanding educational package for attendees, as well.  The highlight, from my perspective, was a presentation by Jane Rooney, the Financial Literacy Leader of the Financial Consumer Agency of Canada.  Jane identified some incredible opportunities for fraternals to partner with her agency in Canada – and pointed out several similar organizations in the U.S. – to enhance the financial literacy of their members, particularly younger consumers.  The meeting also featured an address by Doug French of Ernst & Young (who should also be known as the funniest actuary in North America).  Doug’s insights were worthy of a blog posting all their own – which I’ll share with you next week.

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