December: Maybe Not So Dark?

I flipped through a month’s worth of pages on the “daily inspiration calendar” I received for Christmas last year and found a few gems for the month of December.

I Heard A Bird Sing
By Oliver Herford

I heard a bird sing
In the dark of December.
A magical thing
And sweet to remember.
“We are nearer to Spring
Than we were in September,”
I heard a bird sing
In the dark of December.

And something by Dr. Seuss that nails down today’s mood as we say goodbye to daylight saving time.

“How did it get so late so soon? It’s night before it’s afternoon. December is here before it’s June. My goodness how the time has flewn. How did it get so late so soon?”

The final month of the year can be a dark time as we look back on the preceding months while looking into the crystal ball to predict what’s next. This December, our editorial team decided to focus on what’s ahead — and the road ahead seems much brighter than it was at this time in 2020.

The disruptions of 2020 forced the life/health insurance industries into an epic realignment. The industry reacted to the challenges in many ways, including a greater adoption of technology, a streamlining of the sales process and an increased consumer demand.

And those reactions paid off. In the first half of 2021, life insurance sales reversed a decadeslong slump to rise to their highest level in nearly 40 years.

But the new challenge is whether the industry can ride that wave of consumer interest into 2022. Will consumers return to their previous complacency and reluctance about buying coverage?

Another challenge that the industry faces in 2022 is one that almost every other industry faces — the war for talent. Recruiting and retaining always have been difficult. But the “Great Resignation” brought about by the pandemic and the remote work revolution saw some carriers reporting a 30% to 40% turnover during the past year. Where will new workers come from? And how can companies make their offerings attractive enough to keep those new workers around?

What comes out of Washington also will impact the industry. At the time of this writing, Congress is poised to vote on the Build Back Better Act, a package of social and climate change bills. If passed, the act includes $165 billion to reduce health insurance premiums for those covered under the Affordable Care Act, expand Medicaid to cover an additional 4 million people and implement prescription drug price reform.

The act also proposes tax changes that are relevant to businesses and highly compensated C-suite management. This means that your high-net-worth clients will need your advice more than ever.

One item cut from the bill was a new version of taxable Build America Bonds. These bonds would have helped municipalities finance new infrastructure projects. And it was something the life insurance industry had looked forward to being a part of.

Earlier this year, Bruce Ferguson, senior vice president, economic empowerment and racial equity for the American Council of Life Insurers, told the National Association of Insurance and Financial Advisors that Build Back Better would give the life insurance industry a chance at what he called a “moon shot” in terms of expanding its investment in underserved communities.

He pointed to the Obama administration’s economic recovery program, when life insurers invested heavily in Build America Bonds, Ferguson said. These bonds were aimed at improving infrastructure at the municipal level and raised funds to improve roads, bridges and schools as well as to upgrade water systems. Much of that investment was made in underserved communities.

Build Back Better bonds may be off the table, but the industry still is looking at ways to take the investment capital insurers have and partner with foundations and community groups that have close ties to underserved communities.

ACLI’s Economic Empowerment and Racial Equity Initiative has four pillars. They are:

1. Determining what the industry can do to advance and expand access to affordable financial security in underserved communities.

2. Advancing diversity and inclusion within insurance companies and their corporate boards.

3. Achieving economic empowerment through financial education.

4. Expanding investments in underserved communities.

In addition, ACLI is working with The American College of Financial Services on its Four Steps Forward initiative aimed at moving more households out of poverty.

Whatever 2022 brings, one thing is certain. The industry will continue to find ways to serve more individuals, families and businesses.

We wish you all a healthy and successful new year as you continue to help your clients achieve financial security.

Susan Rupe
Managing Editor