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Annual Meeting Remarks of David J. Stertzer, CEO An AALU for the Next Generation As Delivered 5.3.15 Thank you, Anthony. We’re going to give you a proper thank you tomorrow evening, but we appreciate all of your hard work, positive attitude and tireless dedication to the AALU this past year.

What we found was a series of fundamental shifts in society, in the life insurance market place and, most importantly, in our membership.

And to all of you - welcome to Washington! We’re glad you are here!

From the rise of social media and the consolidation of the number of devices required to do business, technology has driven rapid change in how we communicate.

Mike Mingolelli and the Program Planning Committee have put together one of the best programs we’ve ever had at an AALU meeting and I know you’ll leave town thinking about what you heard, what you learned and who you met. I especially want to welcome all of our first time attendees and prospective members. I’m confident that once you see firsthand the value of the AALU, you’ll be back next year as a member. In the meantime, there are about one thousand people here to help answer your questions and make you feel at home. One last bit of housekeeping: We wouldn’t be here without the help and generous support of our partners and exhibitors. Thanks to each of you for helping to make this the premiere meeting in the life insurance community. The life insurance community. I use the word “community” on purpose. Not just because it’s in the script, but because it is more reflective of whom we are today and who we will be going forward. A community is diverse. It is inclusive. And a community bands together to find the opportunities that come from shared interests. Anthony set the stage for the new strategic direction, so let me share with you exactly what this means for our future. Nearly two years ago, we started talking to you and a host of outside organizations and experts to find out what was happening in the marketplace that could affect the AALU.

Not every trend has been driven by the latest gadgets, and many of the trends that seemingly come out of nowhere - have been obvious for years. Most importantly, we learned that we are out of step with the marketplace and how most of you organize your businesses. Anthony mentioned that in 1986 there were more 150,000 life insurance agents who helped shape tax reform. Virtually all of them sold life insurance…and only life insurance. That’s not the case today. What was once the norm for AALU members – a life-only practice – is rare today. Our most recent membership research tells us that the vast majority of our members offer a variety of products and services beyond life insurance. In 1957 our mission and vision statements fit the times. Today we need a purpose, vision and mission that matches the reality of our time along with a business model that supports it. Developed by our staff and with the help of an outside consultant, your Board has approved new Purpose, Vision and Mission statements as the first step in a new Strategic Direction for the AALU. First, is the Purpose – why the AALU exists? “To be an invaluable and sustaining partner in the growth of the life insurance community.”

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Next is the Vision statement – what we seek to do. “To help those who provide life insurance and the people they serve forge more secure financial futures.” And finally, the Mission – how we deliver the promise of the purpose and vision. “To strengthen, grow, promote and advocate for the life insurance community.” Behind these words is a bedrock belief that we are life insurance centric and advocacy focused, but that does not mean we are life insurance or advocacy exclusive. In fact we believe that to be successful at our mission to strengthen, grow, promote and advocate for the life insurance community, we must be more than what we are today.

And, we need to advocate for policies that help the American people better prepare for their financial and retirement needs. In other words, we need to have an agenda that we drive, rather than always react to what Congress or the Administration proposes. Thanks to our subscription service, we’ll also be able to engage a whole new segment of the life insurance community in advocacy. That app I just mentioned? It will also have the ability to push information about what’s happening in Washington that could affect clients and allow users to immediately send a message to Representatives and Senators on behalf of their clients. That way, we can use our subscribers as a force multiplier to supplement the efforts of our AALU Ambassadors.

Americans need more of what this industry provides. The only way they will get it is through a strong life insurance distribution system.

Today is the just the first of many steps on many fronts that are required to fully reposition our Association and expand our reach.

As a leader in the life insurance community, we can help recruit and develop the next generation of producers by unlocking the intellectual capital in this room and from leading experts. We can provide that wisdom and insight through a subscription that you access through a mobile app.

The research phase of the app development is just wrapping up and we expect to be able to begin testing a working model late this year and fully launch in early 2016 if not sooner.

The app will be branded as a separate service, but “powered by the AALU” to preserve the luxury brand equity we’ve built over time. The subscription is designed for early and midcareer professionals and offers skill-building tools and insight into market events – as well as information about issues and advocacy opportunities in Washington. The app will be made available for free and items will be available for purchase through a low-cost monthly subscription or a ‘la carte. We need to have a stronger voice for the people who provide the advice and products that Americans need. That means we need more members and, in the future, subscribers. We need to ensure that more first year agents, turn into life-time agents and we can play a role in doing that.

We continue to work with our company partners and our sister organizations on ways to leverage each other’s strengths to reduce competition and increase cooperation.

Over the next year or two, we will also develop a new dues structure designed to make AALU membership more attractive and affordable without cannibalizing our existing revenue or harming our brand. Our goal is to increase the value and decrease the overall investment required to be a fully engaged AALU member. Anthony said a moment ago that this is a great time to be a member of the live insurance community. Sure there are challenges…but there are some amazing opportunities for those innovative enough to see them…and bold enough to take advantage of them. Thank you for your continued support of the AALU.

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