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Rebalancing Equations

“Is that algebra?”

That was one of my questions as I squinted at the PowerPoint slides building the case of how to evaluate producer performance. 

As I attempted to keep up with the charts and graphs, formulas started showing up. “That is definitely algebra,” I thought.

I recalled days squinting at equations in high school, telling myself, “I will never need algebra.” But it keeps showing up, usually for some kind of data analysis. Even to construct a simple query, here comes some basic algebra.

This time it appeared during a panel discussion at the LIMRA Distribution Conference in March. Insurance actuaries were reviewing improved methods for measuring how well agents sell.

 The analysis seemed sound and responsible. For instance, just because some people have large cases did not mean that they provided the best margin for the company. Many examples showed that the agent profited far more than the company did, even sometimes costing the carrier.

The analysis was able to separate the field manager’s perception from the actual performance. Often the managers had an impression that was not supported by the data.

 Basically, subjectivity plays a hand. Or to put it another way, humans make a mess of things.

At least, that is what data science would tell you. And certainly, that makes sense when you squint at the charts and follow those lines arching up to success. 

“But where did Ben Feldman go?”

I couldn’t help thinking that, remembering the insurance agent archetype. I learned about the legendary New York Life salesman soon after I started at InsuranceNewsNet in 2008. (By the way, no relation to Paul Feldman, InsuranceNewsNet publisher.)

Feldman was the one who perfected the “pennies on the dollar” description of life insurance’s value. He understood clients’ fears and how to alleviate them. At a time when owners of small businesses and blue-collar workers had little to count on, the small, round ball of energy that was Ben Feldman would step into their lives bearing instruments of protection and security.

Feldman relentlessly studied products, concepts, but most of all, people. His craft was more actuarial art than science.

Others patterned themselves after him, focusing on objections and how to counter them. Now those techniques are considered too heavy on selling and too light on serving.

But Feldman served people well by getting life insurance into families when lifespans were shorter and prospects for widows and orphans were dimmer.

Today, finance and insurance are converging into an inevitable, but still awkward, marriage. Finance has been about making numbers work. It is the dry stuff of projections and contingencies.

Life insurance has always focused on family and the worries that keep people up at night. It is about a kitchen table and two people looking for answers they can trust.

I didn’t see that when I looked up at those charts. I did see it in Dallas.

That was where I was a few weeks earlier visiting Patrick Bet-David, who spoke with Paul Feldman for this month’s interview feature. Even just a few minutes of speaking with Bet-David will tell you that he has that old-time insurance religion.

He has the typically atypical background. The best insurance agents seem to come from difficult circumstances and stumble into the business and thrive. He and his family came to the United States from Iran during the Iran-Iraq War. He was working at a fitness center in California when he found the path that would take him to insurance.

He saw that path was potentially golden, but he ended up finding a higher road. He found that out the way many insurance evangelists do — when they pay their first death claim. He described in the interview how that event turned insurance from a business to a crusade.

Not only is he a comparatively young guy at 39, with a long career still ahead of him, but he is also recruiting young, diverse people. They are people like Rodolfo and Cecilia Vargas, an ambitious, professional couple in their 30s from El Salvador who have a booming practice in Houston.

Rodolfo came to the United States with an economics degree but wasn’t clear on how to make his way until he ran into Bet-David. Cecilia soon followed, and now they are catering to a traditionally underserved Latin American community.

Bet-David knows how to hit the usual fear and security buttons in selling life insurance, but he also knows how to connect with the unstated ambitions that people keep squashed inside them. That is what he uses to recruit.

What do people really want? Usually they work at a job they hate, dragging themselves from day to day, desperate to stay ahead of the bills. Even if they love their job, are they where they thought they would be in life? What dreams are they putting off? Will their kids get the opportunities they deserve? Is this the life they promised their spouse?

I won’t get into the details of how Patrick recruits because that is the subject of the second part of the interview. It is not only an appeal to a better life for the seller but also a service to the client. He creates missionaries more than salespeople.

Mission. That is what those equations needed. The science makes it possible. The art makes it valuable.

That is not algebra

Steven A. Morelli is editor-in-chief for InsuranceNewsNet. He has more than 25 years of experience as a reporter and editor for newspapers, magazines and insurance periodicals. Steve may be reached at [email protected] Follow him on Twitter @INNSteveM. [email protected].

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