Dealing With Complex Sales Cycles

Written by: Ron Scheese

The life insurance and annuity industry is rife with difficulties. From regulatory hurdles to economic realities, roadblocks to success are seemingly everywhere.

At Andesa, we’ve been serving the needs of leading carriers and their distributors for more than 30 years. Over that time, we’ve learned to identify the most prominent challenges facing the industry – and help our clients overcome them. This is Part 4 of a multipart series; check back soon for more.

Com·plex – Adjective. Consisting of many different and connected parts. Hard to separate, analyze or solve. Complicated or intricate.

In a complex sale, the buying process is a long chain of inter-related decisions requiring the buy-in of multiple parties, each with their unique perspective on the situation. And, when it comes to some financial services and products, that certainly applies.

Consider COLI/BOLI – arguably the most complex form of life insurance. Generally speaking, any form of insurance or annuity contract that has cash value will be much more difficult to deploy and administer than contracts with no cash value (e.g., immediate annuities or term-life). The rules that pertain to corporate ownership of life insurance are also more difficult than for individual or group policies. Likewise, the need for robust pre-sale financial modeling in COLI/BOLI is far more acute than with simple life insurance products.

In the COLI/BOLI sales world, there is no cookie-cutter solution. COLI/BOLI can be structured in many different ways, limited only by what the client is trying to achieve. COLI/BOLI is most often a cash-value driven product used to fund certain employee benefit plans. COLI is also used as a death-benefit driven plan to protect an organization from the death of a key person or to fund shareholder buy-sell agreements in smaller organizations. A consultant/broker works with their client to best match an asset (life insurance policy) with a liability need. The plan design, sizing, product configuration and performance, pricing flexibility, investment options and ease of implementation are all important considerations in this transaction.

If you’re reading this blog, there’s a very good chance you’re rather familiar with COLI/BOLI. But imagine how that last paragraph might sound to a potential client who is new to the space. Anything that can simplify the process for them, or help a broker and carrier provide them with superior service or tools, will make a sale more likely.

How can Andesa help?

At Andesa Services, we’ve long been a leader in the field of COLI/BOLI policy administration. Our fully integrated, cloud-based systems offer carriers, brokers/consultants and their end customers a suite of best-in-breed tools and services that is absolutely unique in the highly complex and specialized space. Though these tools and services are designed to provide the best possible user experience for all involved, they also serve as invaluable selling points, simplifying the complex COLI/BOLI sales cycle.

We offer:

Advanced pre-sale financial modeling: A comprehensive financial modeling system is absolutely necessary, since valuation and sensitivity analysis are critical objectives in selling and supporting COLI/BOLI relationships. A consultant/broker needs the ability to illustrate much more than just the underlying financial product.

While the initial modeling helps identify what assumptions impact desired performance and determine the initial premium, each year new projections are made based on revised assumptions, environmental changes and prior experience to determine if additional premiums or product or plan changes are needed. The ability to model exactly what the consultant/broker needs to present the case is paramount to success in this industry.

Policy administration agility and accuracy:  To be successful, a consultant/broker and carrier need to work together to adjust loads and charges, examine various death benefit options, cash value accumulation tests, riders, features and more.

There is a great deal of case-based pricing to support the COLI/BOLI market. Andesa Services’ suite of modern policy administration tools takes a transaction-based approach to product configuration, policy issuance and policy life-cycle events, including both financial and non-financial processing. Andesa’s policy administration offerings are eminently flexible and scalable, offering support for life insurance policies and annuity contracts from issuance to termination.

Integrated robust illustrations: Andesa’s ADASTAR Illustration System handles myriad underwriting classes, product options and features, pricing options and investment assumptions, in order to optimize the results for the client. ADASTAR is directly integrated with Andesa’s policy administration engines, thus illustration values are guaranteed to equal policy values, eliminating one of the major accuracy issues in the industry. This integration eliminates the need for and time involved with data procurement and data management.

In addition, as a result of the integration with the policy administration engine, ADASTAR™ has direct access to all historical policy transactions. This enables ADASTAR™ to provide in-force illustrations on demand and for any point in the policy’s history. The cumbersome manual task of downloading and saving policy values in order to do in-force illustrations is eliminated

Reporting: To ensure success, a consultant/broker will constantly monitor product and investment performance to ensure original expectations and assumptions are being achieved or modified if necessary. Andesa provides for multiple methods for obtaining information and data.  Andesa’s DataMart application provides convenient, easy access to reports at the case, division or policy level. The Policy Snapshot application allows users to conveniently and easily view policy-level detail. Because both applications are fully integrated with the AFAS policy administration system and the ADASTAR Illustration System, values will be consistent across all systems.

Knowledgeable, experienced people: A decision to be active in the COLI/BOLI market means making a real commitment. It is complex – it is not something to dabble in or treat as an adjacent focus. It is a market that requires robust tools and, particularly, in-depth expertise.

Andesa’s employees are the bedrock of our success. We learned long ago that satisfied employees work harder on behalf of our clients, with whom they’re able to form trusting, long-term relationships. Andesa clients quickly come to value the fact that our employees are exceptionally knowledgeable, innovative, creative and forward-thinking – as well as reasonable, down-to-earth and methodical in their solutions.

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