Golden Age For Life Insurers Is Just Around The Bend: Analyst
The life insurance industry is poised for a “golden age” that will eclipse its recent problems, an insurance analyst told attendees at a meeting of the New York Society of Security Analysts.
A major reason for this prediction is that “baby boomers are moving toward the industry,” according to Steven Schwartz, a senior vice president-equity research, with Raymond James & Associates, Chicago.
In spite of recent challenges that include new accounting requirements, losses associated with guarantees in variable products and unfavorable tax treatment of insurance products, the needs of an aging population offer insurers a tremendous opportunity, Schwartz said.
But that opportunity will be for a smaller number of insurers as consolidation continues to whittle away at the number of life insurers in the United States, he added.
Among things the industry needs to improve, says Schwartz, are its tax treatment in Washington and the pricing of products such as long term care insurance.
President Bush did not directly attack the insurance industry, he says, but rather, made other investment options more appealing by lowering their tax rates.
Even so, he called the opportunity for insurers starting in 2009 and running through 2050, a “golden age of life insurance.”