The picture’s not completely rosy for 2015, but there are still opportunities in the life insurance market, according to the experts. And lots of those will come from retiring boomers looking to secure their income with annuities.

According to the LOMA 2015 Life Insurance Industry Forecast, low interest rates and a less-than-stellar economic recovery are going to continue to be thorns in the side of the industry — especially for annuities. But the news from the panel of executives and industry analysts that LOMA interviewed about their predictions for the next 12 months wasn’t all bleak.

The experts were asked about what they saw as upcoming trends in sales, distribution, service, technology and social media for the life insurance industry. In response, they said they see millennials and Gen Xers as strong target markets, especially for conservative savings vehicles, easy-to-understand propositions, and digital offerings – although, critically, several conceded that it can be challenging to gain their attention and trust.

“Unless the industry can figure out a way to attract the millennial generation, and be easier to do business with, I think our industry will only experience single-digit growth,” said John DelPozzo, senior vice president, PGA distribution, Ohio National Financial Services.

Still, retiring boomers looking for a steady income stream are seen as an opportunity to boost annuity sales as they “shift their retirement accounts strategy from accumulation to decumulation,” according to the forecast.

Investments in Big Data and analytics can be a means of boosting sales as well, although according to Tom Scales, research director at Celent, the industry hasn’t really made the leap that will allow it to benefit from its use. “The wealth of data in insurers is huge, but they have not leveraged it well,” Scales said.

He added, “Think of the direct link between your social media posts and your life events. Surely there is an opportunity to make sales of life insurance when someone posts pictures of their new baby on Facebook. Similarly the post ‘pictures of my retirement party’ certainly leads to an opportunity for retirement products or postretirement planning.”

Whether such moves will be welcome to prospective customers remains to be seen, although the relentlessness of Big Data came through in something else Scales said:

“There still seems to be concern about channel conflict in using customer data, but that time has passed — if the carrier doesn’t use it, a competitor will.”

Instant Insights /

Retiring boomers present annuity sales opportunities

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