By warren s. hersch

Most life insurance agents expect to do better in 2005 than they did last year. And a majority expects to achieve significantly superior results.

So concludes a survey released this month by LIMRA International, Windsor, Conn. The report, “Producers Optimistic About 2005 Sales,” reveals that of all agents who experienced a disappointing 2004, some 92% believe they will do better in 2005. Of this figure, 60% declare that 2005 will be “much better” for them.

Robert Kerzner, president and CEO of LIMRA International, attributes advisors’ optimism in large measure to a general improvement in the economy.

“Overall, the economic picture appears brighter,” he says. “That gives a more buoyant feeling to insurance professionals.”

Buttressing Kerzner’s view are the optimism rates by region. In the South, which has enjoyed superior economic performance compared to other parts of the country in recent years, 90% of life insurance agents say they anticipate a better sales year in 2005. That compares with 86%, 82% and 75%, respectively, for the West, the Midwest and the Northeast.

“The Northeast has not recovered as quickly as other regions,” says Kerzner. “So a macroeconomic explanation [for the varying rates] makes sense. As the economy goes, so goes the optimism.”

Expectations are similarly high for all agents, regardless of their performance in 2004.

Among those who say they had an “excellent” 2004, for example, 46% anticipate doing “much better” and 29% “somewhat better” in 2005. This contrasts with 43% and 42%, respectively, among agents reporting a “flat” 2004; and 36% and 49%, respectively, among those who described last year as “good.”

Kerzner credits producers’ optimism as well to the introduction of more competitive and attractive insurance products. He cites, for example, the development of guarantees for variable universal life offerings.

“The insurance companies have done a lot of retooling of their products in recent years,” says Kerzner. “So, producers have exciting things to talk to consumers about.”

Kerzner points also to continuing robust demand for insurance products among consumers. According to LIMRA’s “2005 Survey of Life Insurance Ownership,” 44% of U.S. households say they need more life insurance. And 27% say they expect to buy life insurance within the next year.

As the economy goes, so goes the optimism