Page 51 - Executive Warfare

Attitude, Risk, and Luck

market. Thousands of jobs may hang on your decision, not to mention
the forward movement of your own career.
Let me tell you about a moment when I was unwillingly forced to bet
the house.
I’d taken over John Hancock’s retail division in 1991, a huge step up for
me. I’d hardly been there six months when I found myself in the midst of
a decade-old problem that was about to boil over. For the last 10 or 15
years, a number of salespeople throughout the life insurance industry had
been taking advantage of their customers in two ways.
First, some of them were rolling over existing insurance policies with
a cash balance into new policies for one purpose only—to generate com-
missions. In some cases, the customers didn’t even know they were being
rolled over because the documents were forged.
The second problem was salespeople selling life insurance on the basis
of “vanishing premiums.” The idea was that because the customer’s pre-
miums were invested in the stock mar-
ket, there would be a point at which the
premium bills would vanish and the life
HIGHER
insurance would be paid for out of
MANAGEMENT IS
investment returns.
ALL ABOUT
This was sold aggressively as a way to
HANDLING RISKS
have life insurance without having to
INTELLIGENTLY
worry about the cost as you grew older.
AND IN A
Our sales presentations virtually guar-
CALCULATED
anteed vanishing premiums. Then the
FASHION.
stock market stopped cooperating, and
customers began getting bills they’d
never expected. And if they didn’t pay, the only thing that would “vanish”
was their policies.
There was plenty of blame to go around for this stuff. Fortunately,
though, it did not fall on me and my team, since we were new. Life insur-
ers had clearly either not put sufficient checks and balances on their sales-

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