NEW YORK — Despite the shaky economy, life insurance sales are moving upward and consumers’ confidence in the industry is slowly returning, according to LIMRA International Chief Executive Officer Robert Kerzner.
Kerzner spoke here at LIMRA’s annual meeting.
In October 2008, the proportion of consumers who told LIMRA researchers that they had confidence in the insurance industry had dropped to 12%, from 32% in July 2008, Kerzner said.
Earlier this month, the Windsor, Conn., organization found that the consumer confidence level has rebounded to some extent, but only to 18%.
“We must restore trust and confidence among those we serve,” Kerzner said.
Shrinking sales capacity remains a key issue for life insurers, requiring them to increase the number of producers and to find new channels of distribution, he said.
But sales have stagnated, partly because the number of independent producers declined 7% between 2004 and 2007, Kerzner said, citing new LIMRA research.
Meanwhile, he said, competition will remain intense. While some companies may be reevaluating the individual lines of business they are in, others will be entering new markets.
To maintain sales, it is increasingly important to convince members of Generations X and Y–those born between 1965 and 1995–to buy more life insurance, he said.
Today, “60% of universal life buyers are over 65,” Kerzner noted. “Many of them let it drop. We’d better start getting sales from younger people.”
Another challenges facing the industry is that, as a result of the economic crisis, many companies were shown not to have inadequate capital.