In Profile

A Conversation With David Levenson

LIMRA: The Currency Of Information

by P.E. Kelley

Mr. Kelley is managing editor of this magazine. Connect with him by email: [email protected]

Information is the lifeblood of any industry – what you know about what you do directly influences the depth and breadth of your success. It follows then, that the quality of information, including all of the data, research and marketing analysis needed to adequately inform and educate a work-force, should be held to a higher standard of excellence.

LIMRA was founded in 1916 with a simple goal: to provide training and development to the life insurance industry. That it has succeeded in this effort is clearly evident. But how it has subsequently evolved is testament to a sustained vision for growth and survival in the increasingly complex financial services domain.

And as it grew, incorporating LOMA, rebranding as LL Global and establishing the Secure Retirement Institute, LIMRA maintained a clear and viable pathway for its membership. Indeed, the sheer fluidity of the advisory career demanded it.

David Levenson, DBA, FSA, CFA, is president and CEO of LIMRA. He spoke with us about the genesis of his organization, how it has continually, and successfully, navigated the evolving needs of an expanding marketplace and how it has adapted its mission and functionality in response this continual progress.

PEK: Let’s start by going back to the beginning. Can you share with us the genesis of LIMRA & LOMA: how they were conceived and what their missions were at inception?
DL: Both LIMRA and LOMA were established to help our member companies understand market trends and best practices that could help them achieve their business goals and successfully compete in their markets. LIMRA was established in 1916 by 23 life insurance companies to provide training and development for the life insurance industry. In addition to agent assessment and training, LIMRA conducted monthly life insurance sales surveys for the U.S and Canada.

Today, our members continue to rely on our sales benchmark studies to understand the existing and emerging market trends across many insurance lines, as well as retirement and work place benefits products. LOMA, established in 1924, to help its 82 members share information about office administration. By 1932, its members voted to establish a professional designation program (Fellow, Life Management Institute – FMLI).

Today, more than 100,000 professionals have earned this industry designation. LOMA continues to expand and modernize its designation programs to encourage career-long learning to help them be more successful in an industry that is constantly changing.

PEK: LL Global was established in 2008, on the heels of another national crisis. How did the events of that time influence the need to redefine the mission of the organization?
DL: The work to merge LIMRA and LOMA had begun long before the economic crisis in the fall of 2008, but the timing of the merger well positioned the organization to weather the economic downturn in 2008. Under LL Global umbrella, the individual strengths of each organization were brought together to create a strong, well-capitalized organization that would better serve the industry. As the economy recovered, the organization was able to expand into new and emerging areas that offered great opportunity for our members.

For example, in 2013, LL Global established the Secure Retirement Institute to help our members advance retirement readiness and the financial security of their clients through research, peer forums, education, and innovation.

We continue to evolve and grow today. This year we launched our 5-year strategic plan — Compass 2025 — that focuses on what we do best: providing knowledge and insights though research and professional development; offering convening opportunities through conferences, study groups, and committees; and developing industry-standard shared solutions for common challenges.

The strategy is based on a simple premise of member-centricity, which has served us well as our members and the country have had to adapt to the COVID-19 pandemic.

Our new structure allowed us to quickly pivot from our originally planned work to developing research to help our members understand the implications of the pandemic and economic fallout to the market and their businesses. We were able to create educational programs and materials to help our members adjust to the new remote working arrangements. Finally, we established weekly calls with senior leaders in various functional areas to give them an opportunity to share best practices and provide access to experts who could make this transition smoother.

All of this work supports our greater ambition: to be indispensable to our members and the industry. There is no better time to demonstrate our value than at this time of crisis. I believe the work we are doing today and what we will do over the next 5 years will enable us to better serve our members who operate in the life, retirement and workplace benefits markets.

PEK: Today’s financial services marketplace is comprised of so many disciplines and products. How has LL Global identified, and then codified, the disparate needs for data, information and analysis to develop meaningful information throughout this financial panoply?
DL: It starts with listening. When I started at LL Global, I spent the first six months talking to executives across our membership to learn what their priorities were, what they valued as members of LL Global, and where we needed to shift our efforts to bring more value. I also engaged our sister associations to learn how we could better support their work, which also serves our members.

No question, our benchmarking data is invaluable to our membership but we also learned that the ability to look more granularly at the data was also important. We have developed the Life Compass and Annuity Compass platforms to allow participating members access to broader, more detailed sales and asset information by product, geography, distribution channel, market type, buyer age, contract size gender and more.

This aggregate contract-level data will help companies determine new market opportunities and identify growth opportunities in specific areas, analyze product trends in detail, and track the effectiveness of sales and marketing campaigns with precision.

We also established our Center of Excellence for Data Analytics to support our members’ efforts to leverage data analytics not only to understand what has happened but also what can be predicted to happen in the future. Our team of data scientists develop modeling and tools that can offer greater insight into the unique market segments that offer the greatest opportunity.

The biggest challenge for the industry is the graying of the independent distribution. The average age of an independent advisor is 62. Couple this with the fact that we are seeing advisors who traditionally focused on insurance products shift their focus to investment products and you see there is a distribution gap for our insurance products...

PEK: What are the designations that you offer to your members, and how has the relevancy of your educational platforms remained relevant, given new sensibilities toward compliance, the emergence of the fiduciary standard as a baseline requirement and the general need to have better prepared advisors in the field?
DL: LL Global offers two tracks of professional development – one for home office professionals and one for financial professionals. For home office professionals and executives, we have curriculum to help them build their business acumen across various business functions, understand the market trends driving business decisions and help them apply the fundamental principles of our business to their day-to-day operations.

We have three designation programs. The first is focused on the life insurance business – Fellow, Life Management Institute; the second is focused on the retirement business, Fellow, Secure Retirement Institute. Both provide a comprehensive view of the respective markets and instill a strong foundation for anyone in the industry.

We also have a designation program designed for emerging and senior executives within the industry. The Fellow, LIMRA Leadership Institute offers leadership strategies and skills specifically tailored to unique aspects of insurance and financial services, including our always-evolving regulatory environment.

For financial professionals, we have a wide array of training programs focuses on helping financial professionals stay informed and compliant with emerging regulatory requirements, like our Reg 187 Best Interest training. We also offer Trustworthy Selling 2.0 with Hoopis Network, which provides research-based tools and techniques to teach the importance of building trusting relationships with their customers and enhance sales professionals’ productivity.

PEK: What is the state of recruitment into the industry today? By anecdote, we hear of the ‘aging of the field force,’ so who is coming into the industry and through which channels?
DL: Our research has traditionally focused on agency-building and multi-line recruiting, where we have seen a slight decline over the past couple of years due to the strong job market. However, the mix of experienced and inexperienced recruits has remained steady at 20/80 respectively.

The biggest challenge for the industry is the graying of the independent distribution. The average age of an independent advisor is 62. Couple this with the fact that we are seeing advisors who traditionally focused on insurance products shift their focus to investment products and you see there is a distribution gap for our insurance products.

We can also see this demonstrated by the $12 trillion insurance coverage gap in the United States. Almost half of U.S. households have, on average, a $200,000 coverage gap. Because the majority of Americans still want to work with an advisor to purchase life insurance, if there are fewer agents and advisors focused on life insurance, it is likely these households will not purchase the life insurance they know they need.

To attract and retain the right people, LL Global has created assessment tools to help our members identify and recruit the candidates who will be most successful and have developed training, like Trustworthy Selling, to help them thrive at every stage of their career.

PEK: How has the Robo-Advisor, and what it represents for the automation and digital co-opting of the sales process, altered your members’ strategy to empower the advisor?
DL: Robo-advisor platforms can provide a cost-effective solution to help younger, less-affluent households make the right financial decisions to help them achieve their financial goals. According to LIMRA’s research, 72% of people using robo advice platforms are Millennials. But these digital platforms are also attractive to those people who want to conduct their own financial research and make their own investment decisions.

But the reality is digital advice platforms have limitations, especially when holistic financial planning or retirement planning is needed. Over the past several years, we have seen wirehouses and brokerages offer digital advice platforms to complement the services their human advisors offer. Why? Research shows that the majority of mass affluent households want a blended option – access to a human financial professional for the detailed planning work but a digital platform to easily access and monitor their investments.

Just as we have seen in almost every aspect in our economy, technology can enhance the experience customers have so it is not surprising we are seeing digital platforms being deployed by human advisors.

PEK: What does your research reveal about the public perception of the industry, with a focus on trustworthiness and competency to educate and provide meaningful financial solutions?
DL: We have been tracking consumer sentiment about the industry since 2008, following the economic crisis. Generally speaking, 4 in 5 consumers have expressed confidence in life insurance companies consistently since 2015. Even in the depths of the Great Recession, two thirds of consumers reported having confidence in life insurance companies.

Our industry has always played a role in helping people when they needed it most. Our member companies have delivered on the financial promises made to businesses and individuals for nearly 300 years.

We also play a role in educating consumers and helping them make sound financial decisions. It starts with building a trusted relationship with our customers. Our research shows consumers are more likely to turn to their trusted advisor help them understand the products and solutions that can help them achieve their financial goals.

PEK: It may be too early to gauge the impact of COVID-19 from an industry-wide perspective, but what are you seeing in terms of its immediate effect on how we conduct our business?
DL: Obviously, our members are adjusting their operations to accommodate their employees as they work remotely to adhere to the social distancing guidelines. The pandemic has also driven changes to underwriting and claims processing and has led advisors to adjust how they work with their clients. Some of these changes may drive innovation in the long term as companies witness greater efficiencies and success leveraging technology.

Ultimately the biggest challenge to our industry from the COVID pandemic may be from the resulting economic fallout. The extreme volatility and ultra-low interest rates will force companies to re-evaluate their product offerings and the markets in which they compete. Similar to what we saw during the Great Recession, we are likely to witness increased M&A and see companies carefully managing the product portfolio to mitigate their financial exposure.