The year's catastrophic events in the Gulf Coast and Florida continue to illustrate the critically important benefits delivered by the products and representatives of our business.
When all else seems gone, destroyed, and unknown, the guarantees and benefits of our products provide a life-line of support and hope.
I first entered this business as a producer years ago, and as any producer can attest, it is upon the delivery of the first death claim that our "intangible" products become very tangible indeed. Nothing in my life has replaced that feeling of being able to provide to a family or business in need. In today's challenging environment with its considerable competitive and regulatory turbulence, it can be all too easy to lose sight of the basics of our business. The events of this year help all of us at Ohio National, and across our industry, ensure that our focus does not waver.
Indeed, there is no better time than now for companies and representatives to market individual life insurance to all age groups. The broad range of our industry's products provide consumers the valuable benefits and guarnatees then need for income, security, and protection needs -- and we offer competitive advantages other financial services providers do not. A few statistics to consider:
- According to LIMRA, almost three-fourths of people in the United States agree that life insurance is the best way to protect against the premature death of a primary wage earner.
- Despite this, more than 24 million U.S. households have no life insurance potection at all, and, among households with individual life insurance, almost half carry coverage on only some household members.
- Studies show that most people want to work with a trusted adviser.
- More that three-fourths of U.S. households do not have a personal life insurance agent or financial adviser.
Contrast this with the experience of recent history. Everyone has seen the industry charts over the past decade. Life insurance industry sales have been flat or negative for the most recent 15-year period, and the number of traditional entrepreneurial sales agents has been shrinking.
Yet in this sames period, Ohio National has recorded 15 consecutive years of individual life insurance sales increases, with and overall compound annual growth rate of more thatn 16% from 1989-2004. And our company has increased its number of sales representatives in our traditional channels almost five-fold.
The statistics about the lack of both life coverage and trusted advisder relationships in U.S. households indicate that there is abundant capacity in the market for companies to grow. Product competitiveness has contributed to our recruiting and sales growth, as well as product variety, consistency, and predictability of product development; product performance; and marketing strategy.
At Ohio National, many of our general agencts and career agents have come to us because of our competitive individual term life portfolio, and they have continued the relationship because of the entire portfolio, influding whole life, universal life, and variable univeral life. The importance of current priving performance and fair treatment of policyholders cannot be overstated when attracting and retianing associates and clients.
Additionally, it has been our experience that life insurance product success directly results from all critical pricing components: mortality experience (resulting from underwriting performance), persistency experience, expense management, investment performance, and a continuous improvement focus.
It is one of my core beliefs that organizational success does not result from size alone, but rather from an organizational favirc with well-undersood strengths and weaknesses, well-conceived and focused strategies, committed associates with strong execution skills, and the ability to deliver consistently over time. Operational excellence (execution), operational discipline (focus), and operational balance (governance) will be the key differentiators for the successful companies of the future.
There's no question that different companies have different strengths, and there certainly are no easy answers or quick solutions in this competitive business. Each of our comapnies offers different and important combinations of product, contract choice, and financial foundation. Our highly fragmented market provides many choices and many opportunities.
I'm blessed to work with associates who look forward every day to making the right things happen. We all equally are blessed to be able to provide valuable products and solutions to those we serve.
Nearly 10 years ago, we created our tagline, "Life changes. We'll be there." It continues to resonate today as we look forward to continued growth in 2006 for a true "growth industry" -- life insurance.
David B. O'Maley, CLU, ChFC, MSFS, is chairman, president, and CEO of the Ohio National Life Insurance Company and Ohio National Financial Services. He joined the Ohio National Life Insurance Company in March 1992. Mr. O'Maley began his career in 1968 as an agent. He spent 24 years with Life of Virginia, serving as an agent, agency assistant manager, and agency head. He also served as president of the company's broker/dealer and the two life insurance company subsidiaries. Mr. O'Maley serves on the board of directors of U.S. Bancorp (previously Firstar Bank Corporation) and the MDRT Foundation. He also serves on the board of directors of the Midland Company, serves as chairman of the board of trustees of the Cincinnati Country Day School, and serves as the director emeritus of the National Conference for Community and Justice. Mr. O'Maley served as chairman of the $50 million 1996 United Way Campaign in Cincinnati and also served as chairman of the Board of the United Appeal. Mr. O'Maley has served in various other community roles. Additionally, he is founder of the Tri-State Warbird Museum. Opened in the spring of 2005, this historic aviation museum is dedicated to honoring those who fought for freedom and the United States' rich aviation history.
