The mission of most fraternal benefit societies is to foster and promote the positive social impacts its members have on the communities they serve. To fund these efforts, most look to the results of their insurance operations, where they typically offer a range of personal financial services products to their members.
In a recent article for the Fraternal Observer, Consulting Actuary Howie Heidorn of Heidorn Consulting suggests that fraternal benefit societies need to focus their efforts on three key areas:
Marketing - Societies cannot compete with the marketing budgets of the big commercial players, but they can focus their marketing dollars on the market they own - their members. Focus should be on turning around a declining membership trend. The key is to develop innovative, not costly, campaigns that penetrate and expand their existing market base.
Professional Expertise - Hire and retain professionals who understand the society's special niche and can provide direct value.
Cost Management - Revisit all discretionary spending decisions, particularly those that you can move off the balance sheet and into relatively predictable operating expenses, particularly investments in technology.
The systems and services you use have a significant and immediate impact on your results. They must provide you with proven, cost-effective and repeatable solutions that match your product mix today, and in the future. Here are two with big payoffs:
Compliance - Regulations were recently enacted that require all fraternal benefit societies to submit an audited financial report. It is likely that cash flow testing requirements will follow. Several small actuarial firms specialize in helping fraternals.
Investments - Professional asset management is available from a number of investment advisors who can help you take advantage of higher return strategies with acceptable risk. Accounting and reporting systems can also be outsourced, with results delivered over the Internet instead of staffing and maintaining an in-house operation.
SS&C's Direct outsourcing solution for your asset management needs will allow you to focus on building your business - not your infrastructure.