Search CompleteMarkets

...rs’ (D&O) liability insurance for humane societies helps protect board members...onprofit programs, see Insurance for Humane Societies for more context on related cove...

Insurance Policy Management System: How AI Enables Personalized Services
The insurance industry stands at a critical juncture. Customers reject generic policies with unnecessary features. Enterprises struggle with manual workflows managing thousands of policies. Startups race to scale without proportional cost increases. An intelligent insurance policy management system is no longer a luxury but a necessity. Artificial intelligence technologies enable insurers to transform the policy management lifecycle from inception through renewal. Forward-thinking enterprises embed AI into their insurance policy software to provide personal, responsive, and unbiased experiences. This guide explores how modern corporate policy management software leverages AI to restructure customer relationships and operations. The Old Way Versus What's Possible Now For decades, the insurance industry has operated within defined boundaries. Underwriters reviewed applications methodically. Actuaries calculated premiums using statistical models developed decades prior. Policies were issued. The process repeated for renewals, but with limited variation based on individual circumstances. This standard approach shaped the entire industry from small agencies to multinational carriers. This approach created predictable, persistent problems: Customers received quotes that did not align with their current situation. Renewals surprised policyholders with rate surges they could not explain. Cross-sell opportunities are disregarded because agents lack proper context. Claims processing followed rigid scripts that disregard individual circumstances. Low-risk customers subsidized high-risk ones through extensive pooling methods. The fundamental issue was not negligence but limitation. Processing thousands of unique customer profiles manually was simply impossible. Insurers relied on broad customer segments and statistical models that averaged risk across groups. This approach made economic sense before modern computational capacity existed. Low-risk customers subsidized high-risk ones. High-risk customers sometimes paid more than their actual exposure warranted, while low-risk customers effectively overpaid. An intelligent insurance policy management platform changes this equation entirely. Machine learning algorithms assess diverse data points than human underwriters can evaluate. This enables policy systems to discover patterns across customer behavior, property characteristics, location data, claims history, and behavioral indicators. The outcome is pricing that reflects individual reality rather than group averages. Consider a homeowner in a wildfire risk region. Traditional underwriting applied a standard premium rise to all properties in that area. Modern AI systems assess satellite imagery, local fire department records, property-based defensibility factors, and the homeowner's mitigation efforts. The outcome is personalized pricing that rewards preparedness and reflects actual risk more precisely. This shift from "one size fits most" to individualized assessment represents the core transformation that insurance policy management software enables when built on AI foundations. Rather than treating all customers in a segment identically, modern systems recognize that each customer's circumstances are unique and deserve differentiated treatment. What Operational Improvements Are Offered by AI-Powered Policy Systems 1. Building Risk Profiles That Reflect Real Life Risk assessment in traditional underwriting relies on categories. Age brackets. Credit score ranges. Zip codes. These shortcuts offered speed but sacrificed accuracy. Modern insurance policy software processes information differently. Rather than sorting customers into static buckets, these systems construct detailed risk profiles that capture the complexity of actual lives and circumstances. How AI Builds Accurate Risk Profiles The process begins with data integration. An intelligent system ingests structured data like claims history, coverage details, and payment records alongside unstructured sources such as weather patterns, property images, and behavioral indicators. Advanced algorithms then identify relationships between these factors and actual claim occurrence. Consider these examples: For auto insurance, telematics devices measure actual driving patterns. Is the customer commuting during peak hours or off-peak? How often do they accelerate sharply? What is their braking pattern? Real behavior carries more predictive weight than demographic assumptions. For commercial property insurance, computer vision technology analyzes building imagery. System age, maintenance condition, roof integrity, and surrounding hazards become measurable facts rather than inspector impressions. This granular assessment enables more precise risk pricing that reflects reality rather than averages. Continuous Assessment and Adaptation Unlike traditional policies that lock in rates for fixed terms, AI-driven systems enable continuous assessment. New information flows in constantly. A customer installs home security upgrades. A driver demonstrates six months of careful behavior. Weather patterns shift, affecting flood risk. The corporate policy management software updates risk profiles in response to these changes. This creates a dynamic pricing model where fairness and accuracy improve over time. Customers who reduce their risk receive rate reductions they can see and understand. Those whose risk profiles increase see transparent explanations for adjustments. This continuous feedback loop builds customer trust. When customers understand that their behavior directly influences their premiums, they become invested in risk reduction. The insurance relationship transforms from transactional exchange to genuine partnership focused on shared outcomes. 2. From Quote to Renewal: One Connected Journey The traditional policy lifecycle involved discrete stages. Quote generation occurred in one system. Underwriting happened in another. Policy administration, billing, and claims processing each lived in separate environments, often entirely disconnected. This fragmentation meant each touchpoint started fresh. Customers repeated information. Agents accessed partial context. Opportunities to deepen relationships were lost. A unified insurance policy management system changes this structure fundamentally. Every interaction in the policy lifecycle benefits from accumulated customer knowledge. The Quote Experience When a customer requests a quote, the system accesses available information. Have they held policies previously? Do they have an existing relationship? What preferences did they express during previous interactions? This context allows agents and digital interfaces to skip redundant information gathering, present coverage options aligned with preferences, highlight relevant add-ons the customer needs, and communicate personalized risk insights. The quote becomes a conversation about that specific customer's needs rather than a generic estimate. Ongoing Account Management After purchase, the policy enters a management phase where service quality compounds competitive advantage. An intelligent system proactively anticipates customer needs. As renewal approaches, the system reviews claim history, coverage usage, and life circumstance changes. Personal life events trigger intelligent suggestions. Customers getting married receive information about bundled policies. Those with new drivers see enhanced liability coverage recommendations. This is genuine assistance based on understood circumstances, not generic marketing. Claims Processing with Context When a claim occurs, context matters. The system knows the customer's coverage limits, deductibles, and policy history. For trustworthy customers, the system can fast-track approval. Computer vision technology speeds damage assessment while reducing fraud. The result is claims settlement that feels fast and fair rather than opaque. 3. When Prevention Beats Claims Insurance traditionally operated reactively. Customers bought coverage and insurers paid claims when they occurred. This transactional model focused on claims management after losses happened. An intelligent insurance policy management platform inverts this model fundamentally. When insurers can predict where losses are likely, they help customers prevent those losses before they happen, serving everyone's interests: customers avoid disruption, insurers reduce claims costs, and society becomes safer. How Prediction Enables Prevention Advanced analytics identify patterns humans would miss working with manual processes. A system analyzing thousands of commercial buildings might identify that specific HVAC configurations experience higher water damage rates. Instead of simply pricing this risk higher, the system recommends specific preventive actions tailored to each building. Auto insurance with telematics identifies segments where drivers struggle. Rather than imposing higher rates universally, the system provides targeted feedback and improvement recommendations for specific driving behaviors. This creates accountability while offering genuine opportunities for improvement. For health insurance, predictive models identify customers likely to develop chronic conditions based on current health markers and behavioral patterns. Proactive outreach offering preventive care, lifestyle programs, and early interventions prevents conditions from worsening and generating massive claims later. Creating Value Beyond Claims This preventive approach transforms the entire insurance relationship. Instead of purely financial coverage, the relationship becomes advisory and consultative. The insurance company becomes a genuine loss prevention partner invested in customer wellbeing. This positioning creates a powerful competitive advantage. Customers willingly renew policies with companies that help prevent claims rather than simply paying for them. Employee satisfaction with group insurance programs increases substantially when workers see genuine investment in their health and safety rather than just claims payout capability. 4. Solving the Compliance and Trust Problem As insurers adopt AI policy management solutions, a critical challenge arises: explaining automated decisions to customers and regulators. This transparency requirement is not a responsibility but an opportunity. Customers expect transparency in the way policy service decisions are made. Building this capability creates a competitive advantage. Making Decisions Explainable An intelligent insurance policy management system must operate transparently. When declining claims or pricing policies, the system should articulate specific reasons. This requires more than running opaque models. Modern systems address this through: Feature importance analysis identifying which factors influenced each decision. Rule-based overlays adding human-interpretable logic alongside machine learning. Threshold triggers routing unusual decisions to human review. Customer dashboards showing how their information influenced their premium. Building Genuine Trust and Managing Bias Transparency builds trust more effectively than familiarity. Customers accept rate differences when understanding the reasoning. This creates retention advantage competitors cannot match. Bias prevention is integral as AI algorithms make more decisions. If training data reflects historical discrimination aspects, models perpetuate it at scale. Successful systems include regular audits comparing outcomes across demographic groups, retraining procedures when bias occurs, and human review of concerning decisions. This is risk management, not just ethics. Regulatory scrutiny of algorithmic bias intensifies. Insurers with principled approaches avoid penalties and reputational damage. Starting Your Transformation Today I. For Established Insurance Enterprises For established enterprises managing legacy systems, AI-driven policy management feels daunting. For startups building fresh platforms, different challenges emerge. Both face real choices about implementation strategy. Large insurers need not replace all systems simultaneously. Successful transformation follows phases: Integrate data from separate systems into unified customer views Layer AI decision support on top of existing workflows, suggesting actions for human review Gradually shift proven processes toward automation as confidence builds. Retire legacy systems incrementally as modern platforms absorb their functions. This phased approach spreads investment, reduces disruption, and builds capability progressively. For Emerging Startups Startups have architectural advantage. Building AI-native platforms from inception is often simpler than retrofitting AI onto existing infrastructure. Successful startup strategies involve starting with specific verticals where data access is easier, building transparent decision processes from day one, and partnering with established companies for distribution. Implementation Essentials Regardless of size, successful implementation requires: Clear business objectives beyond implementing AI. Investment in data quality before expecting modeling value. Teams combining technical expertise with insurance domain knowledge. Customer communication plans building understanding. Governance structures ensuring AI alignment with company values. Successful insurance companies recognize that insurance policy management software ultimately serves customers better. AI is the tool enabling that service, not the goal itself. Final Words The transition from generic policy management to personalized, AI-driven service is already happening. Insurance enterprises and startups implementing these systems today gain competitive advantage. They retain customers longer, settle claims faster, prevent losses effectively, and navigate regulations with confidence. An intelligent insurance policy management platform represents the modern standard. The question is not whether to invest but how quickly to move forward and execute to build lasting advantage. Customers are ready. Regulators expect it. Technology is proven. The remaining question is internal: Which insurers will lead this transformation?

Accommodating Alcoholism On The Job
ACCOMMODATING ALCOHOLISM ON THE JOB by Don Phin A Legal Report from the Society for Human Resource Management went into depth about this unique challenge. Here are some guidelines for employers: You may prohibit employees from using or being under the influence of alcohol at work. You may hold alcohol-dependent employees to the same performance and behavior standards as non-alcoholics. You may discipline or discharge employees for inappropriate conduct generated by alcohol abuse, as long as you’re applying the same standards to all employees. If an employee appears to be inebriated, you may ask them if they’re under the influence. The courts are divided on whether alcohol dependency is a disability under the ADA. Some courts have ruled that alcohol dependency is a “disability” only if the condition substantially limits a major life activity. Just because an individual has an episode with alcohol does not make them alcohol-dependent and therefore covered by the ADA. You don’t have to put up with inappropriate behavior by someone with alcoholism; whether it’s profanity, driving under the influence, or any other behavior. Employees are also prohibited from being a threat to themselves or others, violating rules such as attendance requirements. The Federal federal Ninth Circuit Court of Appeals (the most employee-friendly circuit in the nation) has approved these steps as “reasonable accommodation”: The main goal of accommodating an alcoholic is to get them to treatment. Provide the employee with a firm choice between treatment and discipline. If an employee agrees to go to outpatient treatment, you may discipline them for continued drinking or failure to participate in treatment. Provide the employee with an opportunity for inpatient treatment. Discharge the employee only after a second relapse. Grant at least one leave of absence to participate in a treatment program. Consider whether it’s reasonable for the company to pick up the cost of treatment, the elimination of an essential job function, and any related absences. To learn more about accommodating alcoholism, go to http://www.jan.wvu.edu/media/alcohol.html.

Leadership Meltdown: Atrophy Or Recovery?
Hundreds of thousands of small to medium-sized businesses that form the foundation of our economy were founded and managed by honest, hard-working entrepreneurs. For many of these stalwarts in business, ethical behavior isn't something they learned in a seminar — it's natural. It's who they are. Jack Burke explains that good leaders don't manage numbers; they have the tools for a deeper understanding of business as it relates to society. Warren Bennis has been the proverbial leader when it comes to leadership, having written more than 25 books on the subject during the past 40 years. In Old Dogs, New Tricks, Bennis wrote: “Today's leader has to take into account all of the stakeholders and not just the shareholders. The individual has to create a balance among these groups, despite the fact that, collectively, they might have conflicting objectives. Leaders must pay attention to the goals and purposes of the corporation and ask the question, ‘To whom is the business responsible?' Many executives might say the shareholders — and no one else … but that overlooks other stakeholders, including employees, customers, and the community.” Those powerful words, written in 1999, perhaps have even greater meaning today. Leaders of major corporations have destroyed the confidence of the greater community through unbridled self-interest and unethical manipulation of numbers to benefit share value. Is our society that amoral and unethical? I believe not. But I do believe that many of the “Baby Boomer/MBA” generation of leadership lack the essential building blocks of character. Back in the 60s, colleges were overflowing with students for any number of reasons — including rising parental wealth and the Vietnam War. The students who were driven to success focused totally on their career niche. Specialty schools within the colleges flourished like trade schools in a blue-collar town. Liberal arts curricula, according to the more focused students, were populated by the great unwashed — those evading the draft or undecided about their life goals. Upon graduation, business majors — like premeds — immediately went on to gain their MBAs at the most prestigious schools possible. Two years later, corporations competed for these highly trained young MBAs. Organizations such as RCA created “Fast Track” programs to quickly acclimate them to their corporate entities and move them into executive offices. Today, many of these “fast-trackers” are corporate CEOs. Unfortunately we have a generation of highly skilled business technicians who are lacking in the people skills of leadership. They manage numbers (or mismanage them, as the case might be), but don't have the tools for a deeper understanding of business as it relates to society. In the past, business leaders often grew in wisdom through the experience of building their business. Their people and leadership skills often surpassed their financial acumen, which they shored up by hiring the necessary professionals. Companies were valued for their products, their managerial expertise, and their profitability. Stock value generally reacted to those factors. An efficiently managed company with a good product and reasonable profits could be expected to have a fair stock value. Now that doesn't mean that the past wasn't rampant with “cooked books” and financial scams. Corporate skullduggery has been a fact of life from the Railroad Barons to the S&L debacle, and the days of Milken. After all, power and greed are hungry bedfellows. This brings us back full circle to today. Recent events such as the Enron scandal somehow seem more sinister. Seldom have corporate bandits pillaged every aspect of the business culture — employees, clients, investors, and the community. There seems to be a blatant disregard of everyone and everything. Employees lose not only their jobs, but their future financial security. Clients are not only overcharged, they're raped. Investors are merely available pockets to empty, and the community is left holding the bag. Several years ago, I had the privilege of hosting Warren Bennis at my office for a day. Our conversation naturally veered to the state of business leadership. Warren said that if he had to do it all over again, he'd do it differently. He had come to realize that a liberal arts education opens the mind to the wonders of art, history, and literature: Wonders that help to form the basic character of an individual providing an education that first teaches one to “think,” and then later to “do.” Warren felt, and I agree, that MBA candidates should be required to first obtain a liberal arts education followed by at least four years experience in the workplace. Then the MBA program should be four years on an alternating work/study basis (six months of school, followed by six months of application experience at work). The net result: Potential leaders with a broad-based education supporting their technical skills, and all of it wrapped in experience. Obviously, this would only be a first step in addressing the problems of today, but it could be a significant step toward building a better future. We need leaders with character. We need leaders who are devoted to the business of their business. We need leaders who understand, appreciate, and nurture the symbiotic relationship between company, employees, clients, and community. We need leaders who understand that stock value should only be one benchmark of their business, rather than thinking that their business is the manipulation of the stock value. We need leaders who are not only intellectually aware of ethics, but are personally committed to ethical behavior. We need leaders who walk the walk while they talk the talk. Is this pursuit of good leadership a pipe dream? I think not. Just look around at the hundreds of thousands of small to medium-sized businesses that form the foundation of our economy. The vast majority were founded and managed by honest, hard-working entrepreneurs. For many of these stalwarts in business, ethical behavior isn't something they learned in a seminar — it's natural. It's who they are. I've also seen a groundswell of spirituality beginning to surface in the business arena —not religion, but spirituality. Although religion might provide the underpinnings, I'm talking about the essence of human behavior. This behavior supports the positive facets of an individual, puts the greater good ahead of individual gain, empowers one person to benefit another, and penalizes (rather than rewards) avarice and greed. We've all been victims of an egomaniac at one time or another. Their self-inflated ego limits their educability. Their only concern is self-interest. I think of “ego” as an acronym for “Edging Goodness Out.” Self-serving ego doesn't drive great leaders. They acknowledge a vested interest in all five components of business: Company, employees, clients, investors, and community. They consider themselves to be benevolent servants of the business: A worker among workers. In 1994, I finally got to know neighbors whom I had lived amongst for years. It wasn't any outpouring of community spirit on my part; it was the Northridge CA earthquake. We came together in adversity to help each other, putting the interests of the community ahead of our own petty frustrations. On 9/11, we again witnessed the world coming together in a common spirit when facing horrendous terror. As one neighbor asked in 1994, “Why didn't we come together before there was a tragedy?” These are the events of history from which we need to learn. We should seek out the joy in events and people that cross our paths. We should look for commonality in spirit and set aside the negative temptations that surround us. Leaders should set examples for us to emulate as they guide us toward the greater vision. It's been said that the true worth of a person is measured by friendships, not money, power, and prestige. Because friends help one another in good times and in bad, it's time to concentrate on building the wealth of friendship through caring consideration. If we wait until we need a friend, it might be too late to make one. Although greedy and dishonest behavior will always be with us, these can become rare — if we all commit ourselves to working for the greater good. There's more to leadership than first meets the eye.

Prospecting Motivation
PROSPECTING MOTIVATION Successful prospecting relies upon motivational discipline; it's the single most important contributing factor to it. Prospecting requires discipline, not as in punishment, but rather as a systematic approach and a desire to push forward. This internal drive is motivation. Some people consider super-charged emotional hype seminars to be the epitome of motivation. In reality, there isn't much merit to this kind of motivation; if it worked, people could experience it one time and never have to repeat seminars. Every person possesses motivation; it's what inspires individuals to carry out tasks. It impacts how the task is done, if at all. And, like any decision, motivation is greatly influenced by pain avoidance. An unmotivated person is avoiding pain. For a more in-depth look at motivation and how it influences prospecting activities, Edwards Holliday, President, Creative Achievement Concepts, was interviewed. Holliday's interesting perspective on motivation directly conflicts with the concepts of Eaglemark Consulting Group, but the viewpoint is viable, credible, and worthwhile. However different Holliday's message is, study it carefully to firmly implant the concepts and realities. Do You Have What It Takes? by Edwards A. Holliday Creative Achievement Concepts What is the common denominator of success; a trait or quality that all of the following people possess: Abraham Lincoln, Alex Haley, Helen Keller, Hank Aaron, Amelia Earhart, Florence Chadwick, Gregory Peck, Bill Cosby, Bob Hope, Sir Winston Churchill, Thomas Edison, Joe Frazier, W. Clement Stone, Lee Iacocca, and Vince Lombardi? Why are these people, and other famous individuals, so well-known for their accomplishments? What was the driving force behind each that compelled them to achieve greatness? Simply stated, these individuals were self-motivated. From the moment of birth, individuals are exposed to others' likes, prejudices, preferences, attitudes, and behaviors through the long process of conditioning. However, while humans are products of their environment, the power of choice always exists. Individuals can't always control the environment, but they can control their thoughts. As William James said in the book, As A Man Thinketh, 'As a being of power, intelligence and love, and Lord of his own thoughts, man holds the key to every situation and contains within himself that transforming and regenerative agency by which he may make himself what he wills.' This is called personal responsibility for one's motivation. Self-motivation is a reason to move, a reason to take action. Motivation vs inspiration Motivation should not be confused with inspiration. Inspiration is temporary, it wears off. Inspiration is like perspiration, it evaporates quickly. A person who is truly self-motivated generates an aura of energy and enthusiasm for life; it comes from within. Relatively few individuals are truly self-motivated-that's why those who are self-motivated stand out from the crowd-that's why their qualities are so highly desirable and sought. Self-motivated people know who they are, where they've been, where they're going, and how to get there. They know their strengths and their weaknesses, their assets and liabilities. Self-motivated people forget the past and press forward into the future. They focus on their powers and not their problems. Self-motivated people don't watch things happen or wait for things to happen, they make them happen. If self-motivation comes from within and can be generated by anyone, at anytime, in any place, and in any environment, then why are so few individuals examples of supreme self-motivation? The answer is simple, but the solution is difficult. It's hard work! Individuals are complex. They have egos, needs, desires, emotions, problems, limitations, influences, and so on. These obstacles prevent individuals from tapping their full potential, -- their self-motivation. Path to Motivation Some people think that motivation is just bells and whistles, something that is obtained overnight by going to a seminar or reading a book. That may be the start of it, but it's certainly only an outline of the whole picture. The path each person walks in life is a process in learning and growth which can be changed, accelerated, and improved upon to deliver better results. For instance, an acorn is about the size of a quarter and weighs about an ounce, but it has the potential of becoming a towering oak, 100 feet high, weighing thousands of pounds, able to withstand the elements of wind, sleet, and freezing weather. The acorn does not become an oak overnight. As a seed, it will either use its resources of earth, sun, and water, and live to grow, or it will rot and die. Use resources: talents, abilities, other people, institutions, nature, time, etc. to live and grow-or choose to remain unchanged, stagnant, and apathetic. As the acorn grows, it becomes a sapling, the sapling becomes a mature tree, and the tree produces! The tree is always in the process of change, growing and dying, as it loses its leaves in the fall, and grows new buds in the spring. The great oak will continue to live and grow until the day that the sap refuses to travel up the trunk, starving the branches. It declines and dies. Likewise, people are in a process of change, physically and mentally. On the outside, they are always growing new skin, hair, and nails. On the inside, people are always assimilating new information and experiences; they are continuously modifying attitudes and behaviors. The sap that fuels production is self-motivation. Without it, humans die, not physically, but emotionally, and shortly thereafter, mentally. The light at the end of the tunnel Some people walk around with a pulse, but without an emotional heartbeat: Nothing stirs them inside. Nothing excites them, except the coming of the weekend and simple pleasures. They're living for two days a week, instead of seven. Why do they dread the other five? They have no purpose, no goals or ambition. It's a chore for them to rise in the morning. Listen to many of the excuses that are verbalized: 'It's not my fault. I didn't do it. I don't have a college education. My parents didn't love me. The economy is down. No one is buying. I can't do it. I was born into a poor environment. People just price shop, what's the use?' Self-motivation comes from a need to express oneself by means of activity, creation, and emotion. It's a burning desire in a person's gut that acts as a compelling force to take determined action again and again and again until the desired goal has been achieved. When a person begins to see the light at the end of the tunnel, when turning on instead of turning off begins, something amazing happens. The vision of the end result makes the benefits and pleasures that can be gained real. The losses or pains that you will avoid also become tangible. These are the only two reasons any person chooses to take action on any matter: anticipation of gain or pain avoidance. The more a person focuses, the clearer this becomes. The clearer the goal, the more believable the benefits. Benefits and losses from goals motivate people. People either create benefits and losses for themselves for their own reasons, or someone else creates them for their reasons. If people create their own results, and have a clearer understanding of what will be gained or avoided, then they will be motivated by their own attitudes. When individuals know what's in it for them, they know why they want something, what's important to them, and how they're going to feel when they have it. Figuring out what a person wants, why it is wanted, and the feeling of getting it should all be relatively simple; but it's not. In today's society, people are surrounded with so many options, opportunities, information, and influences that it makes choosing difficult and confusing. The challenge, as author Paul J. Meyer states is, 'If you're not making the progress you would like to make and are capable of making, it's simply because your goals are not clearly defined.' Goal setting is the strongest human force in the process of developing self-motivation. If you take action on the ideas presented, chances are that will become a champion. You can achieve if you think you can. As coach Bear Bryant said, 'If you think you're better, you are; if you think you dare not, you won't; if you like to win, but don't think you can, it's almost a cinch that you won't.' Just being involved in this continuing-improvement program guarantees the special opportunity to excel. What a person does with that opportunity will, in a large part, reflect the quantity and quality of self motivation. As asked in the title of this article, 'Do You Have What It Takes?'

Handwritten Letters – Forward To The Past!
Writing a monthly column appears much easier than it is! After all, how hard could it be to string 500-600 words together? Well, the difficulty comes in the topic, not the words. After so many years of writing, I often wonder what else there is to say. Today is a good example. It’s a Sunday afternoon and this column was due Friday. When I sat down at the computer, it seemed that I had already covered everything. I was at a loss for words. Because I’m not into masochistic behavior, I grabbed a cup of coffee and went outside on a wonderful spring afternoon in the Ozarks. As I watched an eagle soaring overhead, I found myself thinking about this symbol of our great nation. Those thoughts quickly gave way to images of our country’s beginnings, which were recently rekindled by the cable television series about John Adams who, ironically, happens to be my ancestor. I thought about how such diverse and opinionated personalities were able to resolve differences and create one of the greatest nations in history. Note that a key factor throughout this entire historical drama was the power of the pen and the art of writing. Those thoughts got me thinking about my favorite exhibit in the Ronald Reagan Library in Simi Valley, CA. There, a small case contains a series of handwritten letters from President Reagan to Soviet President Gorbachev. The letters aren’t about politics; they’re written conversations between two men. The letters often began with questions about the health of Gorbachev’s family and personal anecdotes about the Reagans. Those intimate letters helped end the Cold War and provide a foundation for the future. The Power of the Pen The power of the pen has risen exponentially in proportion to the increasing techno-focus of today’s society. I recently had the opportunity to present a daylong workshop for the Kansas Young Agents Association. I talked about the power of handwritten notes and letters in opening doors and nurturing relationships. About a week later, I received a handwritten thank-you note from one of the attendees. Ironically, this attendee (Richard Gray of Chris-Leef General Agency) was the only one of my generation in attendance, other than myself. I haven’t heard a word from the 30-somethings who were there. One of the most powerful letters I’ve ever received came from our veterinarian about 15 years ago. I still keep and treasure the letter. After much soul-searching, we sought his services to euthanize our dog. He had met every expectation and handled this difficult decision with understanding and empathy. Yet, several days later we received a two-page, handwritten letter from the doctor. He acknowledged the value that “Mac” had brought to our lives, talked about the home we had provided for him, and confirmed the fact that we had made the right decision. He then went on to offer his heart and his ear if we needed to talk about anything related to our grief. I have never experienced that level of compassion and human connectivity from a human medical provider or any other professional service provider. As a young man selling automobiles in an Oldsmobile dealership, I still remember my most effective marketing campaign. Olds had a special Cutlass pricing promotion where a $3,682 sticker Cutlass was selling for $3,288. Using names and addresses from the service department files, I began handwriting and addressing 20 postcards per day. The message was simple: “Imagine an Oldsmobile for only $3,288!” I then signed the postcard, which also contained our dealership name, address, and phone number. None of the other sale people did anything like this. For the next three months, I was the top salesperson at the dealership—despite my inexperience and youth. Jim Cecil of Nurture Marketing traveled around the world talking to CEOs on behalf of Microsoft Corporation. The purpose was to find out how a sales professional could get the attention of a busy CEO. The nearly unanimous answer was by sending a “well-written, respectful letter.” The top level of business leaders considered a simple handwritten letter to be the most effective marketing tool! Two weeks ago, I unfortunately had to attend the funeral of a young man. This 44-year-old police officer died of a lung infection before donor tissue for a transplant became available. He left a wife and three-year-old son. The wake was attended by nearly a thousand friends, acquaintances, and family members. The funeral procession drove under a huge American flag stretched across the end of a bridge between the elevated ladders of two fire trucks. Within a week, we had already received a handwritten note from his wife to thank us for our caring, love, and support. Due to the sheer volume of people at the wake and funeral, it would have been unreasonable to expect any sort of a thank-you note – let alone receiving one so quickly. Nothing can touch a heart quicker than the art of putting one’s feelings into words on paper by hand. It is the quintessential tool for connecting one human being with another. Excuses abound. One agency owner told me that he couldn’t write a letter because his handwriting had deteriorated over the years as a result of using a computer keypad. Another said he didn’t have the time to sit down and write a letter by hand, etc., etc., etc. Yet we expect similarly busy people to grant us their time to sell our wares! Something seems to be out of balance in this equation. If you really want to set yourself apart from the competition, invest some time into re-learning the art of letter-writing and practicing your penmanship. I guarantee it will pay dividends in both your business and your personal life. Well, thanks to that Ozark eagle, I did have a topic for this column after all. The best is not always the newest; sometimes the oldies are the true goodies.

‘The King Of Broadway’
For 12 years and 150 articles, Richard Weber wrote a monthly series on 'Due Care' for Life Insurance Selling magazine. Because of his love for the theatre, he identified his articles with show tunes or show titles. This is the second of four 'swan song' articles in which Weber summarizes and integrates what he learned during those 12 years. Until the early 1980s, the Life insurance industry had a well-deserved reputation for being conservative and, let’s admit it, dull! Not to mention profitable. Whether a mutual insurer formed for the benefit of its policyholders, or a stock company formed for the benefit of its shareholders, Life insurers prospered mightily from the post-WWII boom of 1946 until the end of the 1970s. The staple products of the industry were Whole Life, endowments, and Term insurance. These products generated 80% of the industry’s premium revenue. The underlying investments of the Life insurance industry were in fixed-return securities. Securities were a primary source of long-term capital in the economy, which by 1990 accounted for almost $1.5 trillion invested in mortgages, corporate bonds, and U.S. bonds. Although interest rates could vary, they did so in a relatively narrow band until the stagnant inflation of the mid-1970s. Since the underlying policy reserve rate guarantees were a relatively conservative 3% or 4%, there was little critical stress on Life companies. As each year passed, dividends paid by the mutual carriers continued to grow, reflecting the profits and prosperity of a 'book' of business that was predominantly Whole Life. The Life industry also had a perfect franchise: Only a 'legal reserve Life insurance company' could manufacture the unique financial product called Life insurance. Typically you could only buy Life insurance through several distribution systems controlled largely by those manufacturers. So-called 'career agents' predominated, but a growing group of independent agents or 'brokers' began to emerge as product competition began to heat up in the 1970s. The combination of an emerging group of independent agents, high inflation that transformed product design, and the shift away from death benefit products to investment-oriented products resulted in a profound shift in premium revenue. Through the end of the 1980s, the industry’s traditional products dropped from 80% to barely 25% of premium flow, replaced primarily by annuity sales. The transformation also changed the way the industry’s profit margins were earned since Whole Life products were extremely profitable, but investment-oriented and current assumption products generated earnings measured in mere basis points. Two key events in the past 20 or so years mark profound shifts for the entire Life insurance industry. As referenced in last month’s article, the first event was the 1979 report from the Federal Trade Commission declaring that '… cash value Life insurance is an extremely poor investment, yielding barely a 1%-2% return on the premium …' The FTC report and the subsequent run-up in interest rates in the economy caused the almost overnight adoption of current assumption products. These products were so popular that by 1984, 40% of new cash value product sales were Universal Life. Since these products were better characterized as 'indeterminate premium' — meaning that there was no specified premium — agents and consumers began to take advantage of the choice of how much premium to pay. After all, why pay more than you have to for Life insurance? As it turned out, the courts rendered the answer during the latter half of the 1990s, when the Life insurance industry would settle more than $6 billion in lawsuits for unfulfilled promises. The second major event was the failure of Mutual Benefit in July 1991. Although the industry — and to some extent the economy — was rocked by the April 1991 failure of Executive Life, it was easily dismissed as just desserts for an industry maverick. But nothing could explain the loss of the 146-year-old, old-line Eastern mutual company. Intense media coverage, rating downgrades, lack of early action by regulators, arcane accounting practices, and inexperience of agents in dealing with carrier insolvencies culminated in a shock wave that would dominate the industry for the remainder of the decade. Agents and consumers became aware of Guarantee Associations that served as a financial form of 'reinsurance.' Carriers that were admitted to a state with a Guarantee Association were required by regulation to absorb policyholder losses up to certain limits. Not all states had Guarantee Association agreements in 1991, and there was only modest coverage for the protection of policy owners. At best, holders of Life and annuity policies were covered for not more than $100,000 of cash value and $300,000 of death benefits. Although many policies might be protected by these limits, retirement annuities were much more vulnerable to loss — and these losses were an intense source of confusion and feelings of betrayal by agents and consumers alike. Ironically the financial salvation for the industry came from the same source that had caused such agony a decade earlier: the general level of inflation and interest rates in the economy. As inflation subsided in the middle to late 1980s and as bond (especially junk bond) and fixed mortgage portfolio values recovered, the means were at hand to achieve stability. Unfortunately, this economic benefit did not help policy owners of Executive Life products, as the California Commissioner negotiated a sale of the company’s assets at a substantial discount over what those assets would be worth within a year of their disposition. As the industry began to repair its finances, dignity, and reputation, the various agents organizations were under intense pressure to do something to regain consumer confidence. Perhaps the most proactive association was the Society of Financial Service Professionals (then the American Society of CLU & ChFC). Its groundbreaking Illustration Questionnaire helped tens of thousands of agents to better understand the basis on which policy illustrations are calculated. It also encouraged agents and home offices to be aware of the true nature of the current assumptions — and the projection of those assumptions over 30, 40, 50, and sometimes even 60 years in the future — that underlie all illustrations. The 'IQ,' as it came to be known, was introduced in the spring of 1993 and was a largely educational process focused on agents. Soon afterwards, the Society developed a Replacement Questionnaire to help agents make ethical and professional decisions about whether an intended replacement was indeed in the best interests of the client. Regulators were also at work in the aftermath of carrier insolvencies. The National Association of Insurance Commissioners took two significant actions in the mid-90s: Model Regulations for Risk-Based Capital, and policy illustration reform. Illustration reform, however, became a mixed blessing. The NAICs process of reform began in earnest in 1993, yet wasn’t transformed into a Model Regulation until December 1996. At one point, the NAIC taskforce for reform responsibility actually considered a guarantees-only approach to policy illustrations. In this proposal, which was considered for almost a year, illustrations could only portray the values that would be guaranteed for a particular death benefit and paid premium. With pressure from the industry, however, policy illustrations were ultimately allowed to portray projected values, although with requirements for substantially greater narrative and tabular disclosure. As enacted by most states in the latter part of the 1990s, policy illustrations now span 12 – 20 pages (compared with the typical three-page, pre-reform illustration). The greatest dilemma of illustration reform is that a methodology that didn’t work well was retained and made more elaborate, rather than providing a better model to help customers understand how a policy works (the goal of the NAIC Working Committee on illustration reform). In fact, at the December 1997 meeting of the NAIC in Seattle, regulators complained that illustration reform would have to be revisited yet again, since it hadn’t met regulators’ expectations — even just 12 months after initial promulgation! The American Council on Life Insurance started the last phase of repairing the industry’s image by launching the Insurance Marketplace Standards Association (IMSA) in 1996. The creators of this membership organization (virtually a self-regulating body) created six principles of ethical market behavior to which all members are expected to adhere through self-examination followed by independent examination. As of September 2001, a total of 232 Life insurance companies had achieved and maintained current membership in IMSA. Similar to the 'Good Housekeeping Seal of Approval,' the members of IMSA hope to regain the trust and confidence of consumers and the press in ethical sales practices by companies and their agents and brokers. Unfortunately, some Life insurers have questioned the value of continuing their membership in IMSA. Still others have questioned whether it’s possible for consumers to become aware of the value of IMSA without massive advertising. Finally, although agents and brokers must implement the principles of ethical market conduct, few are aware of IMSA and its standards. The 'top-down' process adopted by most insurance companies hasn’t taken into account the needs or collaboration of sales professionals — and this might prove to be the ultimate problem. Although a booming economy and stock market largely characterized the 1990s, the Life insurance industry underwent profound changes. The career system of distribution has shrunk. At the same time there are many new sources of distribution that many in the industry wouldn’t have guessed as recently as 1990. As we entered the early 21st century, Life insurance sold by CPAs, attorneys, banks, and at worksites has challenged this most traditional of all businesses. A substantial and as yet unanswered question is whether these non-traditional distributors will be able to render the same level of quality service as the trained Life insurance professional. The next article will focus on that most perplexing of all sales tools: the policy illustration and the likely direction it will take in the future.