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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.

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