A Significant Unmet Need — But No Unmet Demand: Dennis Martin on Why Life Insurance Still Has to Be Sold

Paul Tyler (00:02) Hi, this is Paul Tyler, and welcome to another great episode of the L&A Hub Podcast. Today we're going to be talking about some very interesting macro trends in the life insurance, retirement, and long-term care space with somebody who knows a lot about this: Dennis Martin, president of OneAmerica. Dennis, welcome.

Dennis Martin (00:24) Paul, thank you. I appreciate the opportunity to be here and share my thoughts.

Paul Tyler (00:30) Well, I've been the beneficiary. You actually participated in that angel investor event James Wong pulled together, I don't know, six or seven months ago, and you brought some great insights to the room. Maybe we'll talk a little more about that later, where business, technology, and innovation all overlap. But first, give people a little of your background: where you came from and how you ended up in the position you're in now.

Dennis Martin (01:03) Sure. Maybe I'll do a little plug here for James Wong and The Founder's Chair. It's been a fun group for me to be a part of, really trying to help early-stage startups bring technology into the insurance industry. It's a group of people who have cut their teeth or had success in the industry and are trying to find ways to give back and help us move forward. So it's been an honor to be part of that, and I certainly continue to learn from it. I was only able to be there remotely, but it was still great to be part of it. So James, thank you if you see this.

A bit about me. I've been in this industry since 1991. I started on the actuarial side, so I learned the business from the inside out, I guess is how I'd say it. Math was something that came easy to me, so that's where I started. But I really got engaged in the industry in the late '90s, when I got a chance to work more with the field and see what the products do and the impact they have on clients. I moved to the US in 2000, worked at a prior company, and I've been here at OneAmerica since 2009 — going on a little more than 17 years at this point. I now lead our life insurance and long-term care businesses at OneAmerica. I'm really excited about a lot of things going on at OneAmerica Financial, but also in the industry, and the direction and opportunities ahead of us. We've certainly put some things behind us, and I'm excited for what's ahead.

Paul Tyler (02:28) Well, maybe we should start off talking about life insurance. We're about to have our own off-site here and I'm talking about some of the industry trends, so this will help me prep for my discussion. COVID had such a transformational effect on the life insurance business. At the carrier I was at, I think maybe twenty percent of our applications were electronic before COVID. After, we were closer to ninety percent. Straight-through processing, medical records — people talked about those things before, but then it all came to a head and people actually applied them. Did that fundamentally reshape the life insurance business during that period?

Dennis Martin (03:23) One way I view the pandemic is that it was the ultimate accelerator of so many trends, right? Even you and I, Paul — we're doing a Zoom here, talking like this, and it's no big deal. It's how we do business. But prior to the pandemic, this wasn't even possible technologically in any cogent way that felt like it allowed us to interact in a real human way. So technology really accelerated through the pandemic.

On the life insurance side, we had a lot of tools that were around, and all of a sudden we were forced to use them. And not just from the carrier side. Historically a lot of this was driven by carriers. We were trying to move to these kinds of processes, but there's some fragmentation in distribution, and it wasn't always easy to get people to change. Very quickly, all of our interests were aligned. We all had to find a way. So it became the ultimate accelerator, and there's no going back. We've all seen the benefits of doing it this way.

I meet with a lot of producers now who don't even see clients. They do very little face to face. I was in Southern California last week for an event, talking to producers there. Think about what it takes to see two clients in a day in Southern California. In California they don't talk about distance in miles, they talk about it in minutes, right? So many pieces of the puzzle fell into place. Not that you'd ever want to repeat the event, but in a way it was the thing we needed, because we had the ingredients. We just weren't ever forced to put them into the oven and bake them. Now there's more to be done, but we've pushed ourselves past a threshold — a tipping point, as Malcolm Gladwell might say. What's beyond that is really interesting as well.

Paul Tyler (05:18) The technology side clearly accelerated life insurance sales. I think COVID also forced a lot of people to think about mortality, and we saw sales spike for a period of time. I think it dropped off a little. Do you think it changed consumer demand for life insurance?

Dennis Martin (05:42) Interesting question. The pandemic certainly elevated some folks' awareness of, or concern about, mortality. But you used a very interesting phrase there: consumer demand for life insurance. For as long as I can remember, LIMRA has published a report on the trillion-dollar coverage gap — this huge unmet need for life insurance, with the emphasis on need. The one thing that's always been true, and isn't changing, is that there is a significant unmet need. But there isn't much unmet demand. There's no natural demand for life insurance. It's not immediate gratification. It's not like a concert or your new cell phone. It's need-based.

So where does the demand come from? Historically it's been producer-driven. We have distribution networks that go out and educate clients on the power of life insurance and how it fits in their overall financial security plan. They generate the demand and they move clients to action. So our focus is very much on the producer side of this equation, because demand is not natural — it's generated. It's generated by distribution partners or producers. And that's been in the shortest supply over the last twenty years, because the number of producers is declining and the sources of demand have been diminishing. That's one of the biggest factors in how you do this.

Certainly there are those who self-serve, and if you want to buy your own insurance online, those tools have been available for quite some time. But for us, we're very much looking at how to partner and align with distribution partners and producers who are out there educating clients and showing them the power of the products — not just term insurance, but whole life insurance and long-term care, and how these things fit in a holistic plan. How do we help and enable the folks who help clients do what they need to do? Obviously having the process be as easy as possible matters for the producer, but also for the client, because clients' expectations go up every year. As much as they don't want to buy life insurance, they use Amazon all the time. Our experience isn't nearly as frequent as Amazon — at least at my house — but the customer's expectations are framed by it.

Paul Tyler (08:07) Mine too, trust me. We know them well. Let's tread a little further into the technology side. We both heard a lot of interesting pitches at the session James put together. At what point in the whole value chain do you think technology will have the biggest impact in the life insurance space? Will it be increasing the productivity of advisors, letting them sell remotely on Zoom? Product design? I go to these conferences all the time and people say the products have got to be simpler. I'm not sure that will drive demand. What's your perspective?

Dennis Martin (09:02) Maybe a couple of ways to frame it. First, I think technology can help anywhere on the spectrum, and I'll come back to that. But from a strategy perspective, there's the Jeff Bezos quote that you want to build a strategy around the things that aren't changing. For us, that core is that producer-driven demand drives our business overall. That's not going to change, and neither is the need to have a human involved in the process.

For a long time, carriers drove tech. If you go back ten, twelve, fifteen years, the only people investing in technology in the insurance business were carriers. There wasn't much of an insurtech or fintech space. It was all carrier-driven, from inside the industry. And I don't know about you, but if you were deciding who the most innovative people in technology in the world were, you probably wouldn't have said the life insurance industry. So we made progress, but it was very much focused on what I'd call going paperless, or going electronic. It wasn't true digital enablement across the spectrum. It was very internally focused.

The progression since then has been insurtech starting up and investment coming in from outside the industry — initially, ostensibly, trying to disrupt or disintermediate the industry. A lot of capital came in trying to improve the process across the spectrum. Early on, much of it went to engagement and selling insurance, with people trying to become full-stack insurers, who learned pretty quickly that's not very attractive. Now there's a lot of investment on the distribution side and the process side, and all of those things have to connect. So you're starting to see it all the way across: how do you enable the very front line, from lead generation to getting in front of people? And I think AI is probably the next ultimate accelerator of some of these things.

Each of us along the way is starting to figure out how to apply it locally. We all do that, right? You take technology and apply it where you are and to the things you're good at. The same thing happens in our back office, our underwriting team, our new business team, our marketing team, our distribution team, and the frontline salespeople. Everyone's applying it in their own local environment. Part of the key is how you go across that whole interconnected loop.

One of the biggest areas of progress I see, and one that's taking root across the industry, is foundational data exchange. The insurance space isn't like banking. We're very non-standardized. We're not like the securities space, because we don't have daily clearing. We each have our own way of doing it. So we've spent a lot of time investing in our underlying core data — to talk to ourselves internally very effectively, but also to exchange data with our distribution partners and interact with our customers in a better way. When you have better data foundations, that takes you into what I call a digital environment versus an electronic one. We're old enough to know what that means — it's almost like analog to digital. True digital goes beyond just getting paperless. It looks at the data and how you interact with it. And once that layer is there, you can build your digital experience on top of it much more effectively. Frankly, that's been a picture many of us have had in our heads for twenty-plus years, but only in the last three, five, seven years have we really figured out how to decouple ourselves from our legacy systems, put the data in between, and build our business on top of that.

Paul Tyler (12:43) Let's double-click on that a little. We've spent a lot of time with our friends at IRI — in fact, Katherine Dease was just on the podcast last week — and I think they've done some remarkable things on the annuity side. Do you think there's the same need for a Digital First initiative in life insurance as there has been on the annuity side? What would it look like?

Dennis Martin (13:08) I think there's the same need everywhere: ease of doing business and more standardized approaches. The need is certainly there. But the annuity space is a little different. It's often a bit simpler and a bit more transactional. There's a lot more turnover in the business than on the life insurance side, and the products can be more similar than different. On the life insurance side there's more variation. That's not a good thing or a bad thing, just an observation.

You made a comment earlier about simplifying the products. I think it's more about simplifying the approach to buying the products. There's a necessary complexity to building a good permanent life insurance product that provides long-term value, flexibility, and performance to the customer while also providing some level of guarantee and service. A degree of that is necessary to take full advantage of both the insurance components and the tax benefits available through these products and good planning. So you're not going to get all the way down to a simple annuity structure on the life side. But I do think there's room for more standardization.

I think the one you're talking about is the 1035 exchanges and the Digital First work, right? There are some archaic reasons behind how those used to work. It used to be, "Well, we're going to do conservation, we're going to talk to them." At some point that stopped being the right move. If the client wants to move the money, we have to move the money. So how do we help people do business and engage with distribution the way they want, in a way that makes sense?

Paul Tyler (14:39) I think the other challenge on the annuity side, which you don't necessarily have on the life side, is that advisors want to see annuities inside a portfolio, next to investments. Not that life shouldn't be there, but I don't think people have said yet that they need to see a complete balance sheet of a person's finances. Some of the life insurance product types I've seen are starting to need the same type of services, like private placement life insurance. I don't think OneAmerica does private placement, correct?

Dennis Martin (15:23) We don't do private placement at all. It's probably not a place for us.

Paul Tyler (15:27) It's an interesting market. It sounds ironic, but it's one of the most creative and dynamic spaces I've ever encountered in business, Dennis.

Dennis Martin (15:39) We're very much focused on the mass market and mass affluent, really working through advisors and holistic planning. The private placement market tends to get ultra-high-net-worth pretty quickly. We're focused on the core, Paul.

Paul Tyler (15:52) One need we talked about as you start to get older is long-term care. As I told you, I worked for a company that made a big bet there, and unfortunately we were on the wrong side of it. I remember being with the actuaries, and the long-term assumptions were something like a seven-and-a-half percent ten-year Treasury rate and a three percent lapse rate. That did not have a pleasant ending, Dennis.

Dennis Martin (16:25) No. You and I talked about some of those markets just before we started. For us, long-term care through our hybrid, asset-based long-term care products has been a very successful business that we've grown, and it's a huge opportunity for us going forward.

By contrast, in the traditional long-term care space — the things you talked about — pricing assumptions didn't turn out as expected. In some cases that was catastrophic, and in others materially negative. It has created both a challenge and an opportunity. The challenge is that for a long time advisors have moved away from traditional long-term care, or long-term care in general, because of the rate increases and those kinds of things. On the flip side, our population has continued to age, the need for long-term care has continued to go up, and the demand is probably as great as ever. So there's a huge opportunity in front of us.

Imagine somebody described to you a market where there's a huge demographic opportunity with very little competition. Wouldn't you think that would be a place you might want to play? But we still see people approaching it with a degree of caution, and we approach it with the right amount of prudence ourselves, understanding the marketplace and the risks. From our perspective, the need for long-term care insurance is going to keep growing. The good news is that the products out there today, on the hybrid side and even the standalone side, reflect what the industry has learned from the mistakes of the past. I think we have really solid solutions to put in the hands of clients through advisors. There's still room to help advisors understand what's in their toolbox and what's available to help their clients. So there's much work to be done, but also much opportunity, and we have as much technology as ever to help accelerate it. Penetration on long-term care is less than ten percent of people with a long-term care policy — even less than you'd see on the life insurance side. So there's a significant opportunity for the industry.

Paul Tyler (18:37) A number of people have asked me about long-term care, and I think I'll start giving them a slightly different answer based on what you've told me. Let's come back to AI; you touched on it briefly. How is it going to shape our business? On one hand it's technology accelerating things. On the other, it could end up changing some of our assumptions — people living longer because of it, for good or for bad.

Dennis Martin (19:08) My mind tends to go to the good stuff first, though we certainly want to pay attention to what it could be used for that's bad. Maybe in the business context first. AI is going to be impactful at a material level across all aspects of our lives. It's like the old Henry Ford line: if I'd asked people what they wanted, they would have said a faster horse. We don't know whether this is just a faster horse, but it could be a lot more than that. All of us are experiencing how AI helps us do things we normally do, faster — drafting, assembling and composing information, distilling it down and giving us a good place to work from. That's happening everywhere.

From a business perspective, I don't think we're going to differentiate on AI. Unless you're Anthropic or OpenAI, AI is not your business. It's going to be a fuel for your business. It's going to be part of your business. So how are you going to use it? I've talked with advisors about this, and a friend in the data and AI industry gave me this analogy: if you're a doctor, AI makes you a better doctor, but it can't make you a doctor and it can't replace doctors. The same thing applies to advisors. Your competition is going to be other advisors who use AI better or more efficiently than you do, or clients who are using it in ways you're not aware of. So you need to start understanding how AI is going to affect your business, use it, and figure out how your clients are going to see it and how your competitor — the advisor down the street — is going to use it.

As a carrier, there's significant opportunity in the traditional sense: streamlining processes and using AI for more menial tasks that aren't truly value-added. Those are huge opportunities, and I think we're just beginning to understand how robust AI can be. On the flip side, we've all written an AI prompt and gotten something back where you think, "Huh, that doesn't seem right." So there's a regulatory aspect for us to consider as well, especially in the realm of recommendations for an advisor. Right now, for the most part, everything we do is still human-in-the-loop. On the underwriting side, AI is helping us, but all the determinations are made by an underwriter. And when we think about creating the experience we want for advisors and clients, we want AI and any other technology to make us better at it. But in those pure moments of truth, like claim time, we want to make sure there's a human touch and people get the experience they need and deserve.

Paul Tyler (22:00) I'm curious: where has AI had the biggest impact at OneAmerica so far? Or are you still cautiously figuring it out?

Dennis Martin (22:15) AI in many forms has been around for a while. A lot of the tools we use to assemble underwriting information take advantage of AI. Right now we're seeing it take root more and more in our associate base — giving our associates access to it and helping them see what they can do with it, because we all use it locally, and those closest to the work often know how to use it best. The open question is what's beyond the faster horse, back to my earlier analogy. We're probably just starting down that path, like many carriers. I'd love to say we have it all figured out, but I don't think anybody does. We are trying to organize around it intentionally and use it where it makes sense — and to stay abreast of it as much to help our distribution partners as our own business, and to learn from them too. A lot of our partners are big businesses in and of themselves, so we're trying to build partnerships and understand how these things interact.

Paul Tyler (23:29) Who knows, Dennis? I'm blown away by something I come across or try myself every week. I'm an optimist, but as you say, this is a complicated technology to drop into any industry. From a macro perspective, there's been a lot of change in the insurance industry — change in ownership, change in capital structure — and interest rates have certainly changed in the last five or six years. What's your overall outlook for the US and North America over the next several years?

Dennis Martin (24:17) I'm always an optimist, partly because people really need what we do. But I'll give you some dimension to it. First, interest rates are now at levels that are attractive for the insurance industry for the most part. When the thirty-year Treasury got down to one percent a few years back, that was not a place to be or to stay. Rates coming back to a more normal level have put some air back into the balloon. You start to see carriers doing a bit more proactive product development and a bit more investment in the business again, because margins are restored to a level where we can actually thrive, grow the business, and give good value to our clients. That opportunity continues to exist.

There's also a lot more competition emerging, so we have to pay attention to that. We're very focused on our core product set, which is largely built on guarantees and long-term performance — products that do what they say they're going to do and are built to stand the test of time. We're focused on putting promises inside people's long-term plans and having them know they can count on them. That's a big part of how we market ourselves, and we do it through advisory, distribution partner, and producer networks focused on holistic planning who look at the value of these products with a long-term lens. We don't chase the hottest product or the best illustrated return, which I think can create tension in the market in lots of ways. Growth is important; sustainable growth is more important. As a mutual, we have the benefit of strong capital and a long-term perspective, while at the same time trying to build a performance culture so we can compete in the markets we serve.

Paul Tyler (26:14) Let me come back to a comment you made. You mentioned joining the industry in 1991. That's pretty close to when I did — I think my first job in insurance was in 1992, so you have me by a year. For somebody entering the business in 2026, what advice would you give them?

Dennis Martin (26:40) My advice is probably timeless. The first advice I got was to be curious. It's a little Ted Lasso in a sense. There's some complexity to how the business works. I started in the home office of an insurance company with twenty-six hundred people, all doing something, and I'm twenty-one or twenty-two years old trying to understand how it all works together. I had a manager who said to me, "Bring your running shoes to work, put them on, and walk around the building. Go meet people. Ask them what they do and how it fits into what you do." People are always flattered when you ask them what they do. And if you listen and you care, you can learn so much just by being curious and then sharing what you do. That served me really well. So number one: try to understand, and get beyond your boundaries. Number two is building relationships along the way. And just keep learning. There are no bounds to learning. I've been doing this thirty-six years and I still learn every day. I have a pretty good foundation at this point, but there's always more nuance. The insurance business is very dynamic.

My other message is that this business is very resonant and has a high purpose. I have three daughters who are Gen Z, and purpose matters to that generation. They want to come into something that makes a difference. And a big part of why we have to modernize, as a carrier and as an industry, is to attract that generation. It sounds great: you help people build financial security and you're there for them when they need you most. Those are really compelling purpose statements. Then they get in here and they're looking at archaic technology and dated processes, and they ask, "How do you do that?" So a big part of this is being able to attract talent, on the distribution and producer side as well as the home office side. We have to bring ourselves into the modern age, not just for the efficiency and all the reasons the calculus tells us, but for the real, important task of attracting the right talent for the next hundred and fifty years.

Paul Tyler (28:58) Great. Dennis, thanks so much for joining us. Hopefully I'll see you at LIMRA in September. For anyone who wants to get in touch, learn more about OneAmerica, or get more great career advice like this, what's the best way to do that?

Dennis Martin (29:05) I'm confident our paths will cross before long, Paul. The best way is to reach out to me on LinkedIn. I'm more than happy to connect there.

Paul Tyler (29:27) Great. Thanks so much, and thanks to our listeners. Be sure to join us next week for another great episode of the L&A Hub. Thanks, Dennis.

Dennis Martin (29:37) All right. Thanks, Paul.