Some Scary Stuff Challenging The Life Insurance Industry
We are winding down an important week for the financial services industry, the annual observance of National Retirement Planning Week.
Also on the calendar for this week are two notable back-to-back events. The first is the annual Life Insurance Conference co-sponsored by LIMRA, LOMA, Society of Actuaries and the American Council of Life Insurers. That conference is followed by the annual Retirement Industry Conference co-sponsored by LIMRA-LOMA Secure Retirement Institute and Society of Actuaries.
Alas, InsuranceNewsNet did not have a sheet cake and balloons to celebrate this special week. But we did consider these two conferences to be so important that we sent our contributing editor, Linda Koco, to hobnob with the speakers and attendees and bring her special brand of reporting to our readers.
Here are some highlights of the conference that just ended and the one that is just beginning.
- A huge percentage of consumers – 76 percent to be exact – said they are only slightly likely or not likely at all to buy life insurance next year, according to the 2014 Insurance Barometer Study published jointly by Life Happens and LIMRA. Matt Derrick of Life Happens called that number one of the “scariest statistics” and said that finding represents a “challenge” for the industry.
- Indexed universal life insurance is taking off in popularity among UL products. That’s according to Milliman consulting actuary Rob Stone, who said that indexed life policies are more attractive for carriers to offer today compared to the other two types of universal life.
- Some areas of the business are long overdue for a makeover, Life Insurance Conference attendees told InsuranceNewsNet. Those areas include the streamlining of processes at the carriers, technology and speed-to-market of products.
- Industry leaders are looking over their shoulders at online giants such as Amazon and Google. Life Insurance Conference attendees told InsuranceNewsNet that Google already plans to enter the auto insurance market and Amazon could “start selling life insurance in a radically disruptive way.”
- Innovation in the industry will come from “challenging orthodoxy,” according to Marla Capozzi, leader of the global innovation practice at McKinsey & Co. The industry is looking to step up its game even further as more and more baby boomers approach and enter retirement.
- Sales of fixed annuities will remain strong into the next few years and income annuity sales are on such a tear that they will double by 2018, according to LIMRA researcher Joseph Montminy. Among the factors driving sales are baby boomers’ need for guaranteed income in retirement and an expected increase in interest rates.
So there you have a few highlights of a very busy week in the industry. Helping clients to make that crucial transition from working life into the much-anticipated but often scary world of retirement is worthy of a special week but, in reality, it’s something that our readers do each and every day.