The basics remain the same

By Kate McCaffery | November 23 2012 08:29PM

Since the early days of his career back in 1943, when agents were given a rate book they could usually rely on for many years to come, Al G. Brown has seen the industry shift dramatically:

As companies consolidated, in-force client policies were passed from one entity to the next and products began to develop and then change on what was almost a daily basis. This has made it more of a job for the average agent to keep up with those companies who have remained in the business.

Although the smaller number of companies remaining today means there is a little less to keep track of, he says the development is not exactly a benefit to the industry. “In some ways it’s easier, but in some ways it’s more difficult,” says the founder of Al G. Brown & Associates.

“From an operational viewpoint, it’s easier for the agent to deal with a smaller number of companies, but if you have too few companies, you just won’t have the competition you need in order to get fair pricing for the consumer.”

The Million Dollar Round Table Top of the Table member has been continuously ranked in the top four percent of industry professionals for over fifty years. During this time, despite the changes he’s seen the industry undergo, fundamentally, he says industry basics remain the same. “We seem to go through cycles,” he says. “For a period of time, the industry was selling non-par insurance, for example. Now you get back to the idea and, today, the participating policies are being sold to a greater extent.”

The basics of the industry, however, “the backbone, the life insurance coverage, I think will always be required and it will always be sold. It’s just the packaging that will probably go through a number of changes in the years to come.”

Service, on the other hand, is an area he expects will change in the future. Anti-money laundering rules, for example, have made it such that firms are no longer allowed to advance premiums on behalf of clients who are wintering abroad, or who are away for some other reason for long periods of time.
“That isn’t do-able anymore, which makes a lot more work, trying to keep business on the books for some people,” he says.

On the flipside, technological innovations that weren’t available 20 years ago, now make it possible to deliver a certain level of service, with fewer people needed on staff to make the business run. “That’s a big item we’re looking at…Information is flowing much more quickly. There is the cost of your technology, but there is manpower savings in that.”

Finally, at the insurance company level, he says he expects reserve requirements and longer life spans in general, will likely impact products and pricing in the future, as well.

“I think they (the companies) will just have to roll with the punches, so to speak, and adjust their premiums accordingly in the future plans they put out.”