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Condron: Risk Management Is Key

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In spite of short-term concerns about the current market crisis, life insurers continue to be uniquely poised to help prevent a retirement crisis, according to Christopher Condron.

Condron, chairman of AXA Equitable Life Insurance Company, New York, talked here during a life insurance industry executive conference about life insurers’ opportunity to help the baby boomers handle retirement challenges.

The conference, the 19th in an annual series, was co-sponsored by Dewey & LeBoeuf L.L.P., New York; Ernst & Young L.L.P., New York; and Summit Business Media L.L.C., New York, the parent of National Underwriter.

Condron told attendees that insurers must be as focused on the soundness of the guarantors as on the guarantees that they are making.

Insurers are well placed to help baby boomers accumulate retirement assets, then shift toward drawing on the assets, Condron said.

Retirement savers want guarantees, Condron added.

Eight of 10 consumers polled for AXA Equitable said they would be willing to pay double for a variable annuity that provided a guaranty, Condron reported.

But, to create confidence, the financial stability of the guarantor must be assured, Condron said.

The best risk managers–the companies that avoid excessive risk and balance earnings with ensuring safety–will be the ultimate winners, Condron said.

Condron also urged insurers to do a better job of reaching out to young families with children, not simply to sell insurance to older consumers for estate planning reasons.

The industry has not been doing a good job with younger consumers because it is not recruiting enough young agents, Condron said.

Condron also talked about the need for regulatory reform.

To maximize insurers’ ability to help with the retirement crisis, the industry must shift to a national system of insurance regulation from the current state regulatory system, Condron said.

With the takeover of AIG, “there is the first nationalized insurer,” Condron asserted.

Life insurers “need a streamlined path and the current state-by-state regulatory regime is no such path,” he said.

The state regulators are diligent, hard workers, Condron said.

“It is not the people that are the problem, it’s the system,” Condron argued.

“Could FINRA oversee the industry?” Condron asked. “I think it could.”


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