You’ve got to give me props on this one, because it’s every bit as difficult as it is ballsy to find and combine in one blog post two subjects inherently less interesting than Ukraine and life insurance. I’m not of Ukrainian origin nor do I hold any particular portfolio for that suffering nation any more than other non-Ukrainians. But I do try to keep up on the news, and there has certainly been plenty lately in re: Ukraine, much of it bewildering and almost all of it dispiriting. I was particularly struck, however, by a recent article in The New York Times, which rather than rehashing the now-non-news of the conquest of the Crimea and Russian artillery vaporizing a Malaysian airliner, focused on details about the pending cease-fire between Ukraine and the Russian Federation: self-rule in the separatist territories “for three years,” Russian as an official language, the right of the separatist territories to deepen ties with Russia, amnesty for separatist leaders, and this kicker: “What is clear is that Ukraine, teetering toward bankruptcy, must foot the $8 billion bill for reconstruction.”
Wow, talk about adding insult to injury, let alone some less wholesome circumlocutions one might otherwise use to characterize the situation! So Putin “got everything he wanted by attacking Ukraine” and Ukraine got, well, you supply the verb. Yet what really caught my attention was the reference to Ukraine’s president valiantly spinning the cease-fire as “an historic victory” for his country — as opposed to “Capitulation!,” according to some Parliamentarians and independent analysts — whilst leading Parliament “in a rousing version… of the national anthem” — known as, get this, and I’m not kidding, Ukraine Is Not Dead Yet.
Which made me think of the Life Insurance Industry…
No, really, seriously, that’s what I thought, because The Life Insurance Industry Is Not Dead Yet. Specifically: The Life Insurance Industry is to Ukraine as Ukraine is to “Not Dead Yet.”
Okay, give me a break — give me a chance to explain.
Admittedly you don’t hear any life insurance CEOs saying the industry is not dead yet, and yet it’s the subtext of virtually everything they do say about the industry. In good corporate fashion, they speak voluminously of the “opportunities” out there to be grasped, never the problems they’re studiously avoiding recognizing, let alone mobilizing to resolve. Always look on the bright side of life is of course a CEO’s mantra, and a comforting one when you’re pulling down double-digit million dollars plus every year. Actually, our CEOs seldom speak of the state of the industry at all, preferring instead to extol the virtues and prospects of their company, the sometimes accurate but always cynical company-speak version of their own individual “I’ve got mine, Jack.”
If the industry’s problems are unspoken, however, they’ve certainly not unknown: Word does get around; whispers circulate in private and semi-private forums. I won’t rehearse the gloomy stats already laid out in my last post on this subject. Oh, hell, yes I will, because you may well have missed them, or skipped past them, or simply because I believe they deserve to be better known:
Here you have a veritable Trifecta: 1) Life insurance sales down by almost-half since the mid-‘80s, with many American households having no life insurance of any kind; 2) the life insurance agent “career” steadily disappearing; 3) median income for the mass of Americans on a more recent but quite undeniable decline. It’s true: The Life Insurance Industry is Not Dead Yet.
What’s, who’s to blame? It’s complicated, of course, and there are no obvious villains — unless you’re looking squarely at the Investment Industry. Please read my Modest Proposal cited above for a much fuller explication, but in the meantime let’s count the ways that the Investment Industry is soaking up those declining disposable dollars of the Middle Class American household: 1) Mutual Funds; 2) Stocks and Bonds; 3) Variable annuities (granted these are insurance company-produced, but that fact is not particularly relevant in this context); 4) IRAs; 5) 401(k)s; 6) 529 Plans.
And of course the Life industry then places its bets on these very investment products, even though they are but pennies to the dollar of their own life insurance products, profit-wise! Thus, we might say, the Life Insurance Industry is to the Investment Industry as Ukraine is to the Russian Federation — that is to say, as “Capitulation!” is to “historic victory.”
And yet the industry persists in brandishing its increasingly worn-out and irrelevant shibboleths: Kitchen Table! Face-to-Face! The shibboleths, of course, are meant for the (remaining) agents as much as for the apparently deaf–to-the-need or weak-to-the-action American public. Here’s one example I happened to run across today, although there were plenty others yesterday and will be more tomorrow: You (the Agent) are “the human side of a business that needs its human side more than ever before.” Uh, yeah, arguably so, but so what? If life companies are no longer willing or able to structure the sales process to enable the Great Unwashed to obtain life insurance with real human agents able to make a decent living selling it “face-to-face,” what is the point of endlessly rehearsing the rhetoric? My guess is, it’s simply “Go out there, boys, win one for the Gipper, because the Gipper Isn’t Dead Yet.” Be brave, boys, make it work, you CAN do it, despite all the evidence to the contrary!
That of course is pretty much the entirety of what the life companies preach to their troops, and it’s buttressed on the side by what the industry associations tell the public. Consider, for instance, these “Tweetable Facts” offered up by the Life Happens organization (formerly the LIFE foundation) for agents to use with their clients and prospects on Twitter:
I don’t doubt for a second that these are the facts, that they are eminently tweetable, and that they are as dispiriting in their own way as any recent news coming out of Ukraine. However, to see them as anything but guilt-tripping the public is duplicitous and disingenuous:
You admit that you need life insurance or more life insurance, but you’re still not buying it? What the hell’s the matter with you? Are you stupid, lazy, irresponsible, or all three? Rather pay the cell phone and cable bills than buy crucial life insurance? Goodness gracious, you can’t sacrifice a few trips over to the Olive Garden for the sake of mitigating “the financial impact from the death of the primary wage earner”? Are you stupid, lazy, irresponsible, or all three?
But let’s leave this little diatribe on a musical note, the wonderfully-named national anthem, “Ukraine is Not Dead Yet”: “Aleksander Kwasniewski, a former Polish president… noted that the Soviet Union and then Russia have used the same national anthem for decades, changing the words but not the music. The words that first glorified Stalin were rewritten and then changed a third time, all by the same writer. Mr. Kwasniewski sang a verse or two of each to illustrate the point, before issuing his own stark warning: ’This country might change the words, the lyrics, the vocabulary, but it will never change the tune.’”
And so it may be said of the life insurance industry — although not only do they never change the tune, they don’t ever change the lyrics, either.