An enormous opportunity exists for life insurers to participate in providing retirement income for consumers, according to speakers at a conference here.
In the next 3 to 5 years, annuity sales will double to $300 billion from $150 billion, said John Walters, co-chief operating officer and president of the U.S. wealth management division of Hartford Life Inc., Simsbury, Conn. There is more than $9 trillion of money in motion, he added.
Companies should be ready to provide innovative products to the market, but they also need to make sure innovation does not outstrip prudent risk management, he told the audience of senior executives at the 18th annual executive conference for the life insurance industry organized by National Underwriter, a Summit Media company.
It is important that life insurers find this balance because retirement products with guarantees are commitments for 25 to 40 years, he said. Variable annuities with guarantees are complex products that require either reinsurance or costly hedging programs, he noted.
If the life insurance industry is to have the capacity to meet this enormous need with guaranteed products, capital markets will need to evolve with the industry, he said.