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The Lost Generation

I want to treat this blog as a forum for discussion. That’s why your comments are always encouraged, especially if you post them here for all to read and spark further conversations.

I also envision others using this blog to have their say. Today, while I’m in Washington, D.C., I have turned the blog over to Elizabeth Snyder, Director of Advocacy and Public Policy for the American Fraternal Alliance, for a young(er) perspective.

Take it away, Elizabeth…

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Elizabeth Snyder

It wasn’t surprising that a guy in his early thirties wrote an article titled “The Lost Generation?” for National Underwriter. Michael Stanley did an informal survey of his friends (aged 22-31) and learned that while many were employed, married, and homeowners none of them had life insurance policies – they didn’t feel that they’d been marketed to, and agents certainly weren’t going after them. (Newsflash – a fancy Facebook page does not mean an insurance company is reaching young professionals who don’t even know why they need insurance.)

It’s true that today’s younger financial services consumers may feel that life insurance isn’t something they need. The stock market is more fun, and many people have 401(K)s. But talk to a young professional about their future and you may hear a twinge of fear; many of us were starting our careers when the market crashed and hung on through layoffs and company shutdowns, if we were lucky. Our parents, friends, and neighbors lost their jobs, homes, and years of savings. All of a sudden kids who grew up in middle-class backgrounds faced the unthinkable: this could happen to us.

The 25-or 30-year-old of today is different than his peers of 20 years ago. The future is uncertain, and youthful optimism has dimmed. Smart financial services providers need to go beyond a token Facebook page or Twitter account to really reach out to the young professional consumer – and recognize his or her needs. While younger consumers may not know much about life insurance, they do know that life is different in this new and unstable economy. And they want to know what they can do to protect themselves and their loved ones. Michael Stanley concluded his article by urging life insurers to market more aggressively to Gen X and Y. I couldn’t agree more. Protecting our futures is a major worry – will your agents be the ones to help younger generations, and their new families, stay secure?

Insure Thyself!

Fraternals provide protection, but how well protected are your society, your board, and your agents?

Protecting our members’ financial futures through safe and secure insurance and annuity products is a big part of what we do.  But operating a fraternal – that unique hybrid of financial services provider, membership organization, and community service activist – carries significant risk, as well.

Are your society executives and board members secure in the knowledge that they are protected against a lawsuit from members or outside groups?  Do you have a full understanding of your risk exposure and the types of coverage your society should have in place?  Are you offering your agents – independent or captive – access to the most cost-effective coverage as an incentive to place more business with your society?  Are you purchasing your professional liability coverage through a professional broker with a thorough understanding of a fraternal’s operations?

If the answer to any one of those questions is “yes,” then you can’t afford not to listen to THIS PODCAST featuring CalSurance’s Michele Gerace discussing the nuances of fraternal liability and the advantages of the Alliance-sponsored professional liability program for both directors and officers and agents and brokers.

Every Alliance member purchases D&O coverage.  Imagine the market clout we’d have if a majority of members took advantage of our sponsored program.  Over the next six months, I’d like to ask you to do one small favor for me:  ask the folks from CalSurance to review your current professional liability coverages – E&O and D&O – and provide you a quote through the Alliance’s program.  Even if you elect not to purchase coverage through the program – and my hunch is that the coverage enhancements and price will be too good for you to pass up – you’ll come away more knowledgeable about your society’s liability exposure and more aware of the gaps in your current coverage.  Either way, you can’t lose because the policy review is absolutely free. 

Find out how much you can save and how much better protected you can be by calling Michele at (201) 526-4628.

NAIC Update

Here’s the news from the National Association of Insurance Commissioners (NAIC) meeting here in Austin, Texas, that affects fraternals.  The Financial Condition (E) Committee adopted the recommendation of the Capital Adequacy Task Force to amend the existing life risk-based capital (RBC) model law to include fraternals rather than develop a new fraternal RBC model.  The Alliance supported this proposal and will work with regulators with whom we have solid relationships from Minnesota, Wisconsin, and Pennsylvania to ensure that the final amended language of the life RBC model incorporates the subtle differences in the fraternal RBC formula.  “Stand at the ready” on this because the NAIC indicated that it intends to begin collecting fraternal RBC data on the NAIC database as soon as possible.  The Committee also adopted a recommendation to increase the threshold for regulatory trend tests under which a life company will be considered in the Company Action level from 200-250 to 250-300 RBC percentage. The American Council of Life Insurers (ACLI) withdrew its initial objection to this amendment on the basis that the higher threshold makes the standard for life companies consistent with those for P&C and health insurers.

Joe’s Special

Here are a few facts, figures, and notable quotes that I’ve come across recently.  I found them fascinating.  Hope you do, too…

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Why do we question success?

In my travels over the past 18 months I’ve picked up on a recurring theme.  It goes something like this: societies that run the financial services segment of their operations well are somehow less “fraternal” than those that don’t.  I can’t tell you how many times I’ve mentioned the name of a society that’s running the business end of their organization profitably – and there are quite of few of them out there, large and small – and the reaction I get is “Well, they are not really a fraternal.”

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What’s the latest on the “fraternal cooperative?”

If you attended the 2009 Presidents or Secretaries Section meeting or the NFCA Annual Meeting, then you know that one of your association’s most important initiatives is to develop a “fraternal cooperative” – a shared services program that can help member societies combine resources to generate economies of scale, take advantage of the expertise on certain key issues within the fraternal system, and join forces to market innovative new financial services products to the next generation of members. 

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