Forecasts always contain good news and bad news. As we enter2010, the good news for our industry is that there will always be aneed for professional health and life insurance agents, and theremight be fewer people competing for this business. The challengewill likely be a continued reduction in commission rates and fewerresources provided by the insurance companies. Also, the productsand how they are sold will continue to evolve, but that can be bothgood and bad news.

As I write this, the national health-care reform package isstill firming up, but whatever is eventually passed out of the111th Congress will have a major and long-lasting impact on ourindustry and all Americans. The changes are not likely to takeeffect until 2013, so the impact in 2010 will be incremental. Inthe short term, we likely will see insurers, agencies, and othersbegin to position themselves to play by the new rules.

Health insurers will probably have to implement numerous majorchanges to ensure compliance with the new rules. For example,underwriters likely will no longer have the option to decline,rider, or rate-up people for individual medical coverage. This willforce underwriting departments to transition into enrollmentdepartments, similar to what happened in the small group marketover the past 15 years. Actuaries will have to try to set ratesbased on assessed risk without the ability to exclude any of it. Ifan individual mandate passes (and stands up to likely lawsuitschallenging its constitutionality), requiring all Americans toobtain health insurance, commissions are sure to go down. Agentsand agencies will need to write more business, more efficiently, tocontinue earning a good living in the health insurance market.

Adapt to Succeed

Most agents and agencies that focus primarily in the employeebenefits market have begun to diversify over the past year or so.Those that have not will need to, quickly, if they plan to continuein this industry. Selling small group insurance against a publicoption or through an exchange, exclusively, is not likely to be aprofitable business. Employee benefits agencies have outstandingrelationships to position themselves as financial advisors tobusiness owners and their employees. Making sure that they are allaware that you can help with their life, disability, long-termcare, and supplemental insurances is crucial, as there willcontinue to be a great need for all of these products even if thegovernment eventually takes over the health insurance market.

Life insurance sales remain strong. I anticipate agents movingaway from just term sales to a total-needs approach that will paira small, guaranteed no-lapse universal life policy with terminsurance. This approach is generally the best one for the clientand can potentially double an agent's commission. Everyone willneed to have some life insurance in force when they die. Agentsshould strive to sell a blend of permanent and term insurance.Everyone who buys term life insurance should have at least $50,000to $250,000 of permanent coverage, as well, depending on theirsituation.

More Markets

Disability and long-term care insurance will become a focus formore agents and advisors. Agents who have not entered these marketsshould get the necessary certifications to do so, and then startdiscussing them with their clients. An eight-hour long-term carecertification is now required, followed by a four-hour refreshercourse every two years after the original certification. Manyagents took the certification course in 2007 when this requirementwas implemented. Those agents should have taken the four-hourrefresher course by now to remain in compliance. Agents can checkwith their local Association of Health Underwriters or NAIFAchapters to see if they are offering these courses.

Many agents have avoided selling disability income insurance inthe past. These reluctant agents would be wise to get up to speedon these products now, as the need for them is great and should notbe impacted by any of the legislation coming out of Congress.Agents should look to have a relationship with a general agent whomarkets disability income products or with a carrier that has asales representative in the field to support their efforts.Disability is not an easy sale, so you will want all of the supportyou can get for this product.

In summary, 2010 will be a year of transition. Insurancecarriers will be interpreting the new rules and responding withchanges to products, departments, staff, and marketing. Insuranceagents and agencies will have to decide which direction they wantto go. Some will choose to retire or close their doors, others willdiversify and/or change their focus. Those who remain in thebusiness will have to change how they do business. However, therewill continue to be an unlimited supply of people who need theproducts and services offered by professional insurance agents.This should be a very successful year for those who focus onopportunities and move in the right direction.

Dave Sherrill is vice president of SherrillInsurance Brokerage (www.sherrillins.com), a full-service wholesaleoffice in Central Florida marketing health, life, long-term care,dental, disability, annuities and Medicare supplements. He alsoserves as executive director of the Florida Association of HealthUnderwriters (www.fahu.org). He may be reached at 407-831-5000 [email protected].