By Scott Sheefel
The initial results of the 2015 Marketing & Distribution section member survey are in! Let’s review the two topics considered the most important to you and your fellow MaD members and the MaD Council’s 2015 plan to cover these key topics. And don’t worry, if you would like to see the additional topics on which MaD members were polled, as the results are finalized we plan to update members on the MaD Section LinkedIn site and start dialogue with members for additional feedback. If you did not get a chance to provide feedback, or would like to provide additional comments, we encourage you to continue to send comments to council members or comment through LinkedIn.
First, before addressing the two leading vote getters—“Consumer Analytics” and “Successfully Reaching the Middle Market”—how do MaD members prefer to receive content from the Marketing & Distribution section? As expected, the preferred method is through this NewsDirect publication, followed by webinars and SOA meeting sessions. Therefore, the council will continue to spend a significant amount of time pursuing leading-edge material from marketing and distribution experts and present it via these three channels. We will supplement the information provided through new avenues such as the MaD LinkedIn site and/or podcasts. Look for the NewsDirect email notice in May and September. To the extent you have good ideas for articles or have read articles that would be interesting to MaD members, please let us know. We would love to include them in the NewsDirect publication.
Although lower on the list of preferred methods, the council members will continue to encourage LinkedIn use in order to increase networking and communication between members. NewsDirect, webinars and SOA sessions are, for the most part, one-way avenues for content distribution, and significant communication and discussion through these means are not easily accomplished. Additionally, since content through the NewsDirect publication is considered the preferred channel to receive information, imagine members sharing distribution related articles relevant to actuaries through LinkedIn, significantly increasing the amount of quality content that members have access to and maybe more importantly, that are sourced for them.
O.K., on to the key topics. In the MaD member survey, we provided the following examples for Consumer Analytics:
- Lead generation: Improving the quality of leads
Efficiency of distribution: Achieving higher sales conversion rates, cost efficiencies
Analyzing messaging to targets: How are consumers responding to different messages
It has been well documented that premium rates for products sold on a simplified issue basis continue to be quite expensive for middle-market consumers. Low persistency and high anti-selective mortality are the leading causes. The predictive analytics topic that has been covered extensively is underwriting. As we have witnessed from this coverage, there is still a significant gap between simplified issue and fully underwritten business. This means that for simplified issue business, it is essential that more analytics occur up front in the sales process, before underwriting. Can we find a better subset of risks before it gets to the underwriting process?
Consider the statistics obtained during the sales process by companies selling voluntary worksite products. The underwriting questions for voluntary worksite sales are very limited, therefore consumer and distribution analytics can be the most important factors in pricing. Voluntary worksite companies often do a very good job of measuring participation rates (or the percentage of the employee base that purchases), reviewing what price point makes sense for the employees before starting a sale, and keeping statistics on what messaging appeals to different demographics. Can we, as actuaries, do a better job of measuring sales conversion rates the way participation rates are measured in worksite sales? Can we use analytics to do a better job of understanding exactly what an individual consumer might need in terms of product, price and message? Could this lead to lower anti-selection, higher persistency and a decrease in distribution costs through increased efficiency? Look for webinar and meeting sessions in 2015 covering this topic.
Successfully reaching the middle market may be something everyone can define, but few companies have indeed found the success. MaD would like to advance the discussion for our members. We are in the midst of a research project that will take a deep dive into some of the impediments to reaching the middle market consumer for life insurance products. The goal of our project is to gather insights from experts or knowledgeable people in the marketing of life insurance or similar products to the middle market and to detail struggles and successes. Although we won’t be providing a specific recipe for success in the middle market, we hope the insights will be valuable for those just beginning to tackle the middle market puzzle as well as members that have already been very much involved in trying to find solutions. Please look for our research project to be completed later this year. We will provide a report as well as discussion through a webinar and a session at the annual meeting in Austin.
The MaD Section Council looks forward to continued quality collaboration with our MaD membership in 2015. Thank you for your membership and interest in MaD activities.
Scott Sheefel, FSA, MAAA, is a vice president at Wilton Re. He can be contacted at ssheefel@wiltonre.com.