The future of Insurance

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Beyond the Challenge is a podcast where executives in the insurance and financial services industry share their insights and experiences. Hosts Kevin and Sandy Dougherty talk with today’s top business leaders about what keeps them up at night and the biggest opportunity organizations can capitalize on today. We encourage you to listen, share, and subscribe to our program.

Kevin and Sandy Dougherty each have over 20 years of experience in insurance and financial services, corporate leadership, and executive search. They’re the owners of Global Corporate Solutions and Global Corporate Leaders. Global Corporate Solutions partners with organizations to gain efficiencies and contain costs. Global Corporate Leaders partners with organizations to enhance and evaluate talent.

Beyond the Challenge podcast is sponsored by Exactuals, perfecting payments and the data driving them; Techficient, transforming the protection journey with intelligent data and machine learning to drive better outcomes; and JourneyGuide, improving your clients’ retirement outcomes through interactive planning software.

Welcome to Beyond the Challenge. Here are your hosts, Kevin and Sandy.

(interview)

Sandy: Today, we’re talking with Brad Mendenhall, President, Insurance Solutions, at Concourse Financial Group, about the trends, challenges, and opportunities he sees for the insurance industry. Brad has over 30 years of experience in the financial services industry, specifically in the areas of sales, operations, and sales leadership. Brad, can you tell us a little bit about yourself, how you got into the industry, and a little bit about Concourse Financial please?

Brad: Well, sure. Thanks, Sandy and Kevin. Thanks for having me. It’s great to join you today. Yeah, I think I probably got involved in the industry the same way many did is it found me more than me finding it. So, I had the good fortune to buy insurance from a carrier agency many years ago and, as a result of that, became a recruit and then an employee. So, started as a carrier agent, spent between four or five years in production and then had an opportunity to get involved in the brokerage side. From that, things progressed where I wholesaled, I was a divisional sales manager, held a whole lot of roles and actually kind of got outside of the sales side of it for a while and into I guess what we would have called 20 years ago fintech today, worked in the operations there, setting up sales desks and also building platforms. And all of that combined brought me today where I work at Concourse as the President of Insurance Solutions. As far as Concourse, the whole design of Concourse is really to be a single destination for holistic insurance and financial planning for people that want to grow their practice today. So, we brought together a broker dealer and our RIA and our BGA under one roof so our community of financial professionals has everything that they need to gather, grow, and protect their clients’ assets.

Kevin: Brad, all sectors face challenges. For the insurance industry, that list seems especially long. Many carriers seem to be struggling to stay relevant while others are embracing new technology, reimagining distribution channels, and developing strategic partnerships. What do you see as the future of distribution for the industry?

Brad: You know, that’s a question that’s been asked for a lot of years. So, over the past few years, we’ve seen a lot of disruption, disruption with the entrance of maybe new fintech firms. Direct-to-consumer has been here a long time, but I think the landscape has changed a little lately. We’ve seen some of those companies exit from the marketplace, some that have shifted their focus from that direct-to-consumer to more of a B2B focus. Some of the foreign digital life insurance companies actually going from direct-to-consumer to coming out to the BGA world and partnering with them. So I think all in, disruption is good for our industry. We need it, it challenges us, but I think that change, you’re going to see a marriage of that traditional distribution platform, that BGA, the career agencies, marrying with those fintech firms to really drive business to the future and we have to keep in mind how do we make the journey for our consumer easier. So, I think disruption, it comes in a lot of forms but most people think about product disruption and ownership disruption, but you’ve got faster processes, people that have not used those processes in the past have to retrain themselves in our distribution channels, better technology, but the value the financial professional offers today is just crucial and it’s going to continue to be. So, one of the things I have seen though is I think this will continue is the role of that financial professional. In the past, consumers, generally, they would go to somebody for their insurance and risk management products and then they would go to somebody for their wealth management products. But now, I think those fields, financial services, are so intertwined that we’ll continue to see more professionals working to serve that comprehensive financial planning needs versus just offering a specialized service. So that comprehensive approach, I think, requires support models that are going to change and they have to curate a product set, help people select those products, and roll that inside that entire financial planning assistance and I think you’d probably see a lot of point-of-sale support in the future of the distribution channels as well.

Sandy: Do you see the entrance of Google and Amazon to the insurance marketplace changing the way carriers see distribution?

Brad: I think that’s a good question about the way carriers might see distribution, these platforms can have success, but I think it mostly would evolve around places where that end consumer knows exactly what they want and what they’re looking for. I think the challenge there is that we continue to see that that’s not the case. We continue to see that lots of Americans are still uninsured or they don’t have adequate coverage. I think the latest LIMRA insurance barometer study said something about well over 100 million adults that were either not insured or they were underinsured in today’s marketplace. So, I think when you tie that in to the fact that the insurance conversation just isn’t cut and dry, so if I’m going to go to Amazon or Google, I’m going to find information that I’m searching for and they want to buy a product on Amazon, I generally know what that product is, tells me what it costs and I assume that I know what it does, but that insurance contract is a little more difficult than that. So everybody’s different, all of our financial needs are unique to each of us, so conversations between clients and the financial professionals are still vital and I think they do a number of things. You’re going to uncover new needs, you’ll have a chance to have some dialogue about how much coverage is needed and why, and then how that insurance fits together in that larger financial plan that we want to look at as well.

Sandy: Great. So how does Concourse Financial find their competitive advantage and keep it going?

Brad: Well, our competitive advantage in our opinion and our strategy is really to take that holistic approach. So, we’ve structured our organization to provide services around the financial professional. So, financial professionals today enter the service in a number of ways. So they have to have flexibility, flexibility to choose how they want to work with us, how they want to engage, what services they want, and the supports they need so we can opt around that and help them with all of those needs. So our goal is to work with those financial professionals that really understand that larger need and take a holistic look at the client’s needs. So, from there, what we would simply do is help them with that strategy, make sure the strategy fits the client’s comprehensive needs and insurance is part of that overall comprehensive strategy, not just a single focus in today’s world. So it’s more complex but actually maybe in turn a little more simple as well is if you’re looking at the whole picture, it’s much easier to design that comprehensive solution all in one spot.

Sandy: How is Concourse using big data, AI-assisted analysis, and machine learning to make the insurance process easier for both agencies and the insured?

Brad: Yeah, it’s upon us. Big data is here or Big Brother is watching, as some people would say. Technology is something that we continue to invest in. We do it for a number of reasons but first to better support our financial professionals, trying to enable them, and I think that takes many forms. So, it might simply be for some financial professionals using a drop ticket platform and maybe using tools that enables them to really customize proposals for their insurance or show financial planning software that takes people on a journey from when they start working with them to where they retire someday. We also look at our carrier partners and they all support us differently but they’ve got unique product designs, they’ve got unique underwriting processes sometimes, and we take that, we leverage that and make sure that we’re matching that up to the needs of what a consumer might be. There’s always that challenge so we take technology and we think about that enabling us but it doesn’t replace the producer or the advisor at that point of sale. So, some of the things that we do along with that beyond technology is to provide that consultative approach, working with our advanced planning support, working with financial professionals, looking at the needs, the needs drive everything in what we’re doing today, that comprehensive financial plan, something that’s tailored for the client and then working on the carrier — with the carriers, I should say, on their behalf. So everybody’s needs are different, everybody’s situation is different and that includes their level of knowledge of the financial services industry, what they want to know and how they rely upon their professional to bring it to them. So, in house, we’ve got underwriting assistance that we have, I think that’s very important in today’s world, with the writing classes we have today and the requirements, making sure that we represent that product the best that we can from day one so we’ll gather information and get information through the producer or maybe even directly with the consumer to help slot them into the right rating class up front so there aren’t any surprises along the way. Or if there are surprises, they at least understand why and we can work through that, we’ll advocate on their behalf, it always puts us in a better position. We do the same thing with advanced underwriting. We try to get to the root of the problem and make sure that we’re providing that right solution and making sure that the producer and the consumer both understand why we’re talking about that and how that’s going to solve their problem. 

Kevin: Brad, what would you like to see carriers do differently to help BGA and IMOs sell more product? 

Brad: You know, Kevin, when I meet with carriers, which I’ve met with six carriers over the last few days talking about planning for next year, so one of the most common questions I get is, “We’re getting this much business and someone else is getting two times that. What are they doing?” So, for top carriers, they really focus on involving the financial professional and understanding what the planning solutions are that are available to consumers. So their focus is on planning, their focus is on helping solve a problem and not selling a product. An example is it can range from a lot of things from a simple needs analysis, doesn’t take a lot of time, but providing tools for that, tools that we provide as well as a distributor, to really complicated estate planning cases, business planning issues that might arise in ownership, it could be maybe a foreign national situation, someone that’s an expatriate wanting to buy insurance. Maybe it’s a situation where premium financing works, depending on the scenario. So, all of those issues are things that carriers can engage with us and help us go through that planning process with our partners. Now, carriers, they make money when they sell their product but this product solutioning is really a byproduct of them helping us with that planning process so I think that’s the key. So before a solution can be designed from a product, we have to understand what the problem is and what that product does to solve it. So helping that process is critical. I can’t emphasize enough how important the partnerships we have with carriers are. They are our partner in the business, they help us get where we want to be, and together, we all prosper. And, more importantly, we solve problems for the consumers. And I think the last part of that process is making sure that we set expectations both with the financial professional and the consumer so they understand what that purchase is. So, from the day they say, “Yes, let’s start this,” making sure that they understand what the process is, how long it takes, it’s certainly not like picking your iPhone up and buying something off Amazon. So, start the process, move through that process, and keep clearly and timely updates along the way so there aren’t any surprises, or if when surprises do come up, they’re communicated clearly to those folks. 

Kevin: Brad, what type of strategic partnerships do you see working the best for organizations like Concourse?

Brad: Kevin, I think there’s a lot of options in the marketplace today for financial professionals. So, we work to offer really that curated selection of tools and solutions and things to help move that practice forward. Our partnerships, we partner with leading providers and that provider might be a product but it might be of a software set, it might be a process of understanding advanced planning so it could be not only just carrier partners but providers in the industry. A few things come to mind when I think about the type of partnerships that work best. I mean, as anyone, we want trusted partners so we look to our partners to help us serve that end client. It’s just the table stakes in the marketplace today but we look for partnerships that we can get in-depth support and then collaborate so I think in our business today, that collaboration between the product providers, the software providers, and then the distributors and end consumer is really, really important.

Kevin: What do you see as the biggest opportunity for the insurance industry over the next three to five years?

Brad: Well, I think it’s a great industry. We’re known as an old slow growth industry. I think that’s maybe true but I think the opportunity is endless because there’s fewer people in it so the opportunity in the industry, I think, or I guess if I boiled this down, Kevin, the biggest opportunity really is to provide that holistic service, the holistic insurance and financial planning advice to that end customer. As we mentioned before, those end customers are looking to find more things in one place, trying to find advice, become an informed consumer, and they want to know how each piece of the puzzle fits into the overall picture for their financial plan and I think that’s the biggest opportunity for us. There’s a lot of ways to do that, as distributors, obviously, we curate that product set, we bring people to the table to work collaboratively in that environment but I think the biggest opportunity is looking at it holistically and where the market is going and what consumers want versus what carriers or product providers want to provide to that consumer.

Sandy: What’s the best decision that you made that had a positive impact on your career? Other than going on our podcast, of course.

Brad: Well, of course, that ranks right up there. So, I would have to say some of the best decisions I made, I didn’t know I was making them at the time. Sometimes I made decisions I will tell you in my career that maybe I went kicking and screaming but I got the most out of. I guess, to say that, I say try new things. Not every opportunity for a career is a linear path. So I think when we’re maybe younger in our career, we think that we’re going to start here in an entry level position and we’ll progress through all of those different chairs, to say, to get to that end goal, whatever that goal might be, but I think that that the most important thing we find is a broad set of experiences, it’s that collective set of experiences people get so diversifying that experience base. In our industry, it might be that you’re going to go from sales to account management, maybe you go from account management, you spend some time in operations running something, and when you put all that together, it really gives us a recipe for you becoming more valuable to your organization. The one pushback I get a lot today in hiring folks and asking people is just the fear of change. We can all say the one thing that is constant is change in today’s world and velocity is the variable, as they would say. So the ability to embrace that change, take on new challenges, that’s going to be key to all of us I think both as individuals and as companies. When I got started years ago, I think they said there were 1,600 life insurance companies at the time. Lately, I heard somebody say there’s just over 600. That’s a big difference. So key to that is don’t be afraid of change. The best advice I probably ever got was focus on what you can control, be specific, don’t try to boil the ocean, as they say. So, when I boil that down, I think about it, you have to pay attention to just one or two key things that you do each and every day in your role that’s going to ensure success. It might be for today, this week, this month, or this year but we’re all tempted to kind of chase the shiny object or get off focus so focus each and every day on what makes a difference and what’s important. I think we’re all successful and more effective that way as well.

Sandy: Thanks, Brad. Would that be the same advice that you would give to somebody who’s looking to get into the financial services or insurance industry?

Brad: Yeah, that’s a great question. As we think about financial services today or insurance, they’re just so blended, as we talked about before, so people might enter it through a banking outlet, they may come in through a brokerage house or through a traditional insurance company or a distributor of some type. So, that role really has been blended today and we see the banking world offering insurance products, the brokerage world offering banking products, so I would say that they need to think about being more holistic in the way they look at that and so wherever they engage in our industry, there’s opportunities for lateral movement but there’s also the bigger picture than what it used to be. So I think it’s blended, make sure that when you’re going in there, have an open mind. Give it time. Most of my experience has been in the distribution side on the financial services world and building a book of business is a process, it’s not an event, so if you’re going into production, making sure that you realize that the efforts that you’re putting in today will pay off down the road, get a good mentor. I think all of us that have had success in this business, we can look back and think of people and organizations that have had a huge impact on what we do that have given us good advice, that pushed us when we didn’t want to be pushed, so getting a mentor makes the difference. And it’s a great industry. I’ve said for many years, we’re in an industry where we can all do well while we do good so I think that’s important. And the last thing I would say is think about your education. Be a student of the business, never quit learning. Doesn’t mean you have to go back to graduate school to have four degrees but make sure that if you’re in this industry, you understand it, challenge yourself to learn more, and be better each and every day.

Sandy: Great. Couple questions ago, we talked about change and don’t fear the change, change is coming, change is happening, roll with the change, understand the change, so with that thought in mind, what does keep you up at night? 

Brad: Yeah. Well, not a ton. I guess if you had asked me this last week, it would be a different answer, because I tell you that it was our son being on active duty in the Army Airborne in Europe, not a real stable part of the country right now, but he got back home last week so it’s been a great week at the Mendenhall household. But if we think about our industry, there’s a battle for talent, one of the things that stands out for me, so I know that’s certainly in your wheelhouse and you guys know this well. We’re always looking for good talent and I think our industry can sometimes be overlooked is the great opportunity for career growth and career pathing for new professionals. So, to us in our business, we think about that career pathing in a couple of ways. It creates diverse experiences, people become more valuable to the organization as they grow and see different parts of it. It’s crucial that we help everyone in our organization understand that connectivity to the end consumer. So what I mean by that is whether you’re on a sales desk, you might be in operations, you may be taking call center calls each and every day, understanding that our collective efforts makes a huge impact on people each and every day so I think that’s important. Those are things that we take for granted sometimes is that everything that we do today, whether you’re sitting on the sales desk or whether you’re on the frontline in a retail position, we make a difference for people. Things that hit people’s radar today immediately is consolidation. Everybody’s talking about consolidation, aggregation, all of those things. It’s a natural part of that business cycle. I mentioned earlier, the number of insurance companies there were 30 years ago and what’s happened today, and I think it works out over time, in general, is that market is correct, the market dictates what’s available. I’m just hopeful that it’s good for all parties because it makes us all stronger as an industry. That’s what we’re looking to do. We need to be stronger, we need to be able to make sure that we’re meeting those long-term promises and that’s our goal. When we look at that, the expectations from consumers for that shopping and that purchasing process today has become table stakes. It’s true in all industries. You buy a pizza from Domino’s, you can track it on your phone as far as where it is and that process, how far away it is from your house. You buy your stuff, you mentioned Amazon earlier. I think that’s going to be crucial to our success to marry up big data, the technology you talked about, to making it easier for people to buy. And I guess that kind of leads me to the last thought maybe here is that consumer journey. It’s been difficult in our industry over time and I think it’s certainly merited because we take really, really big bets on a small amount of premium. I have a million-dollar policy out here for $500 of premium and if you don’t get that underwriting right in the big picture, it can be really harmful to our business. But I think what we need to do is take — all the data tells us we are uninsured and underinsured in America so our mission really ought to be to try to meet these folks where they are today, help them identify what those coverage gaps might be, understand what the coverage options are, and then move through that purchasing process to cover the needs, whether that be a life insurance policy, it might be disability, long-term care health insurance, or helping them in that retirement planning process and the purchase. So I think that’s collectively what we have to do. I just have to tell you, it breaks my heart each time I see these GoFundMe accounts pop up because young family lost a parent and GoFundMe is an outstanding organization that helps many, many people but it can’t match what we do, the solution that we give the consumers, peace of mind we have out there for families and all those obligations will be taken care of for them if we can get to them and help them with that planning process. So I think we need to continue to tell that story, tell it in an engaging fashion, make the process more simple to help those families that have the needs, fill them in a timely and a pain-free manner, and I really think that has to be the mission we all have, to get out and make sure that we’re filling that coverage gap and making sure everybody has the opportunity at least to understand what insurance in the financial services field can do for them.

Kevin: Brad, thank you for your time today. It’s been great to hear your insights on the challenges and opportunities you see for the industry over the next few years. 

Brad: Well, thank you guys for having me. It’s been my pleasure and I wish you all the best.

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