Page 3 Profile
Susan Waring
Learning Curve
by Carolyn S. Ellis
Susan Waring, Executive Vice President and Chief Administrative Officer ñ Life Affiliates and Vice President ñ Health, for State Farm Insurance Company was recently the fifth individual and the first female inducted into The American College Alumni Hall of Fame. We talked with Susan about a mid-career shift to insurance professional, how women evaluate and purchase financial products, and the importance of continuing education
L&HA:What is the real value of continuing education for financial professionals?
SW: First, it's important to get the right continuing education, the book-learning and testing to get your credentials. There are lots of reasons. Tax laws and rules are constantly changing. New products are coming out, and you need to know the features and benefits of the competitors' products as well as your own. States mandate certifications that you need in order to sell products like long term care insurance. People in the financial business must stay current. I believe you must be committed to your own professional growth. You should be a learner in this industry, period.
L&HA: In the wake of Bernie Madoff and other scandals, are certifications required more now?
SW: Certifications are more important than ever. We also need to do a better job of saying what the designations and certifications mean. You could take a five-hour course on a weekend and say you are certified, but I believe The American College is the premier financial and professional education provider.
L&HA: Would you say attending The American College is like going to Harvard, where part of the benefit is the extraordinary students and faculty?
SW: That's a great comparison. The dialogue students have with each other, with people coming from different companies but dealing with the same issues, makes The American College experience extremely rich.
L&HA: Are there gender differences in selling, shopping, and financial decision-making?
SW: We all have to recognize that women are 52 percent of the population today. There are more women today buying everything and there is also a significant difference in how we buy. Women are a little more apprehensive about investing. Studies tell us that a lot of that apprehension is based on women's discomfort with mathematics, so when it comes to investing or anything on the numbers side, women want somebody they can trust. Often men will take a bigger risk; they'll go online and do their own trading and investing. Women want somebody that will sit with them, answer their questions, spend the time, and commit to reviewing every couple of years because women know that life changes. We want lots of information before we make a decision. Sales people need to be more patient, spend more time answering questions and providing the information, and they need to build more trust.
L&HA: Research shows that women want to be well-informed before they sit down with a financial professional. Do you find that to be true and how is this need best addressed?
SW: It's very true. Today women can go online to find out about different products and compare them. Once they have that information, they want to sit down with somebody to talk about their individual needs and which products could best help. Often over our lifetimes, women make less money than our male counterparts. We take time out to raise our children or to care-take our parents, so we have less money to save and invest and our retirement proceeds are smaller. As a result we don't like to take risks.
L&HA: Are many agent recruits coming to insurance-based financial planning in mid-career, and can you comment from your own experience?
SW: At State Farm we add 500 to 1,000 new agents every year. Most of our new agents are in their late 20s or early 30s and come to us from teaching, coaching, the military, retail, or other businesses. This is a viable career for women. It's flexible. Women are nurturers and they are good at active listening. At State Farm about 24 percent of our agency force is women and that continues to grow.
I left the academic world where I was a college dean to join State Farm as an agent when I was 37. I wanted to start my own business. I had an awesome mentor that I respected who gave back to the community, and I liked that model. We have 17,000-plus agents across the United States and Canada, and you see our office fronts no matter where you go. About 20 percent of the population is insured in our auto or fire arena. We are always out there, and we have a lot of people who want to be an agent. That exposure still works for us today.L&HA: Is it best to have women selling to women?
SW: I don't think you have to be a woman to sell to a woman. Success is based on relationship-building. We do a course for all our agents to help them understand what women want. Our male agents tell us that not only is the course helpful to them in business but also in their personal relationships. They've indicated their own marriages become better, they listen more, pay more attention, and respond differently.
L&HA: What are frequent stumbling blocks in financial planning for women? Do these include math aversion, insufficient income, or lack of exposure to financial planning?
SW: Discomfort with numbers or growing up in a household where Dad was talking to the son about finances but the daughter was never included can leave women feeling less secure about finances, but this can be overcome. More important is the fact that women live longer. They are going to work fewer years. If they are married they are going to live longer than their spouse. If they are not married, they wonder what to do. They need to get involved with planning, saving and investing, and the way they can most comfortably do that is by finding someone they trust. Studies have shown that most women, even if they are making a good income in the $100,000 level, wonder if they are going to end up with enough money.
L&HA: Are we facing a shortage of insurance agents today and will that leave consumers without the one-on-one advice they need?
SW: In the earlier 2000s people bought less life insurance and put more into investments because the market was good. In 2008 and 2009 that focus has shifted to solvency and financial strength. Life insurance is a product people need as a foundational part of their investments. When less life insurance was being sold you had fewer people moving into those careers. I haven't had that experience because I not only have life insurance, mutual funds, and banking products, but I also sell property and casualty and auto and fire insurance. Our model works no matter what the economy is.
L&HA: As the fifth individual and first woman to be inducted into The American College's Alumni Hall of Fame, what is most significant for you about this honor?
SW: The American College is the professional educator for the industry, so I am extremely proud to have been selected by my peers. To be the first woman selected is also a great honor because there are a lot of talented and accomplished women in our industry.
L&HA: Tell us about the State Farm Chair in Women & Financial Services, especially the focus of research and teaching, and about the Women's Symposium.
SW: Let's start with the Women's Symposium. State Farm decided in 2003 to get our women agents together to talk in an environment where it was just about them. We picked Bryn Mawr for the first women's symposium at The American College. Simultaneously, State Farm decided to endow a chair for women in financial services at The American College. The purpose was to do more research on what women want and why and also to help other women consider insurance and financial services as a career. The research is serving us well. The current State Farm Women's Chair holder, Professor Mary Quist-Newins, just published Women and Money: Matters of Trust on marketing to women in financial services. It's the text for her course and an excellent stand-alone resource.
L&HA: Are you still on the Board of Directors of LL Global?
SW: I have just come off the LL Global board after serving as chair and past chair. I was on the board of LOMA and we were in merger conversations with LIMRA International. When the two became LL Global I became chair. That was a very exciting opportunity in the industry to bring associations that do training and marketing and research together so there are economies of scale. It was a plus for the industry, and I think through LL Global we are delivering better information than we ever did before. I currently sit on the boards of the American College of Life Insurers (ACLI), The American College, and Illinois Wesleyan University. I will be chairman of the board of the Medical Information Bureau (MIB), the fraud detection association for the life and health insurance industry.
L&HA: Of all we have discussed, what would you like to emphasize?
SW: Foremost we must remember the potential in the women's market. Ninety-eight percent of financial decisions are made by women today. When you are in conversation with a couple you have to make sure the woman is "in the room" figuratively and physically. You have got to give her the eye contact and all the information she needs because if you don't, she's going to say, "We need to think about this." There's a tremendous market out there, and it's growing and getting smarter all the time, but it's very, very cautious.