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Life Health > Health Insurance > Life Insurance Strategies

Fact Book Shows Effects Of GLB, Boomers

By Arthur D. Postal

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Regulatory changes are helping banks sell more insurance, and the baby boomers are getting older.

The new edition of the Financial Services Fact Book tells those stories in columns of data.

The Financial Services Roundtable, Washington, and the Insurance Information Institute, Washington, the publishers of the new fact book, released the book here today at an economic outlook briefing.

The Gramm-Leach-Bliley Financial Services Modernization Act of 1999 made it easier for bankers to sell insurance and for insurers to sell banking services.

Bank annuity premium revenue increased to about $52 billion in 2003, from $24 billion in 1999, while bank revenue from sales of individual life and health products increased to $2.4 billion, from $1.8 billion, according to the Fact Book.

After weighting to adjust for the effects of single-premium products, banks’ share of the fixed annuity market rose to 36% in 2004, from 22% in 1995, according to the Fact Book.

At the briefing, Steve Bartlett, president of the Financial Services Roundtable, welcomed the “democratization of investment.”

“The economy is more vibrant than ever and the Roundtable is working to increase incentives and opportunities for Americans to invest in it,” Bartlett said.

Dr. Steven Weisbart, an economist at the Insurance Information Institute, noted that members of the baby boom generation, like members of earlier generations, are showing a tendency to shift toward more conservative products — such as fixed annuities, long-term bonds, variable annuities with yield guarantees, and long term care insurance — as they age.

But the boomers have an even stronger incentive than members of the “Greatest Generation” and the “Silent Generation” have to shift to more conservative investments, Weisbart said.

“What the baby boomers are looking for are the qualities defined benefit plans used to provide,” Weisbart said

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