LIMRA Panel Discusses Lessons Learned From the Great Financial Crisis

National Harbor, Md.
Representatives from two major life insurers discussed lessons learned on working with producers during the recent financial crisis during the LIMRA annual conference here.

During the first days of the economic crisis which hit with full force in mid-September 2008, very few consumers reached out to financial advisors and when they did, it was rarely initiated by advisors, according to Patrick Leary, assistant vice president-distribution research with LIMRA, Hartford, Conn. Leary moderated a panel titled ‘Top Producer Support: a Model for Tomorrow.’

The career agents at Principal Financial, numbering over 1,000 advisors, took it upon themselves to contact clients and provide them information, according to Nick Cecere, Principal’s vice president-individual distribution. As a result of the financial crisis, the company has learned to do a better job of communicating its financial situation to both agents and clients, he said.

Jim Thomsen, senior vice president-member services with Thrivent Financial for Lutherans, said that immediately after the crisis, there was a loss of confidence in the insurance industry both on the part of advisors and consumers. He recounted attending a social event the Saturday after the meltdown hit and having another guest, upon learning what business he was in, say “that used to be an honorable profession.” On Monday, Thrivent management decided that the insurer had to tell its story and its advisors also needed to talk about the company and how it is on good financial footing.

Cecere said that public perception is a very powerful force as evidenced by the fact that from October 2008 through March 2009, Principal’s stock price declined from $70 to $5 per share and began to rebound when the company announced that it would not take government TARP funding. In early 2009, Principal decided to launch its “America Rebuilds” campaign and is now following up with an “America Dreams” campaign.

Thrivent’s Thomsen told panel attendees that “We need to shore up advisors” because they need to feel like they are part of a community.