Doomsday Can Wait

Business predictions are even trickier than predictions about the weather. Whatever the weather coming our way may beyou cant change it. If it is going to rain or snow you cannot stop ityou only can prepare for it. However, business can change tactics or adopt new strategies and completely alter the future course of events, thereby defeating the predicted outcome. Business predictions are never certain. It is interesting, though, that predictions usually get lots of press and hypebut you seldom see a press release when one flops.

Additionally, our business is, I believe, an enigma to many people doing market research. Too often, I think, they view the life insurance product like commodities they track. And therein lies the error of their ways, for they do not understand our sales process, which is different in many respects. It is true that product marketing does change over time and salespeople often work themselves out of a job as industries mature.

My grandfather pioneered the sale of Electrolux vacuum cleaners in South Carolina in the early 1930s. To sell a machine, he had to go into a home and demonstrate its effectiveness. Only one company I know still does that; most vacuum cleaners today are sold in stores where people walk in and buy them. At about the same period, refrigerator salesmen were following ice wagons around town looking for prospects. Both the ice wagon and that kind of salesperson have long disappeared. When my aunt Ruth bought her first car, the salesman had to teach her how to drive. As a child, I accompanied her on her first lesson and still can remember how frightened I was each time the car lurched as the salesman was patiently trying to teach her to let the clutch out slowly. Car salesmen dont do that anymore. But life insurance salespeople are doing essentially the same thing they were doing 70 years ago, albeit in a more sophisticated manner. Why?

What I believe some researchers are missing is that the demand for life insurance is derived from conditions created by the agents (by whatever name they are called). Agents sell plans, many of which emanate from their own creativity. Uses for life insurance in years past were relatively simple. Today many are complex. Over the years, agents have conceived of uses for the product not envisioned or predicted in former times. Split dollar, deferred compensation and buy-sell arrangements are among many creations that have helped our business adapt and continue to grow. The life insurance policy itself is the funding mechanism for the plans that continue to be created primarily in the field. Our business is not likely to become "mature" as long as our salespeople continue to be creative.

Whenever I hear gloomy predictions, I am reminded of this quote on the wall of one of the hearing rooms in the Capitol building in Washington: "Due to a shortage of experienced trumpeters, doomsday will be postponed three weeks."

Reproduced from National Underwriter Edition, November 18, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.