HOLLYWOOD, FLA. — A nationally known economics forecaster said here that he believes this is a great time to sell insurance products.
But he qualified the comment.
It is a great time for selling insurance as long as producers are confident that the company can deliver on the products, said Don Ratajczak, who is regents professor emeritus of economics at Georgia State University, Atlanta.
Speaking during a breakout session at the annual meeting of National Association of Independent Life Brokerage Agencies, Fairfax, Va., Ratajczak reviewed events leading up to the economic crisis of the past year and offered his own assessment of what might be next.
At one point, he asked, “Is there something better [for consumers] than investing in bank certificates of deposit?”
“Sure,” he continued, “as long at they [consumers] are sure of the security of the product. That is why they are putting money into banks–so they [are sure] they will get their money back.”
That certainty is what makes this a great time for insurance products, he said.
“This is the best market you can have,” he said, adding that insurance is “so much more dominant than the other products that are available.”
As for the status of the U.S. economy, Ratajczak said it is still on government life support via the stimulus program. “We need to see real earning power created by the economy” before recovery can be assured, he said.
The vital signs for the economy look okay, he said, but there is no real earnings growth as of yet.
Right now, he said, “we are not creating jobs,” but he added that the deterioration in the job market is happening at a reduced rate. When the unemployed are called back to work, the professor said, their paychecks will help create the purchasing power the country needs to return to health.
“We also need inflation,” he said. He predicted the November inflation rate will be up by 0.4%., and the Consumer Price Index will probably be at 3% in the first quarter 2010. Then the CPI will decline. “Wait for 2012 for rapid inflation,” he said.
What about job growth? “Near zero through the summer and then equilibrium in mid-2011,” he predicted.
Another breakout session speaker, Joe Schmieder, a senior associate of the Family Business Consulting Group Inc., Marietta, Ga., said, “It’s not all doom and gloom.”
In the economy right now, “there are some green shoots coming out,” said Schmieder, who is also an adjunct professor in family business at Notre Dame.
He said he has developed the impression that many insurance professionals tend to be optimistic and so have a positive feeling about the future. But they can still benefit from tips on how to conduct business during bad economic conditions, he said.
He presented 100 “action thoughts” he has pulled together from his from work with companies and others.
For instance, “plan as if the downturn will be longer and harsher than what you expect,” he said. Also, “over-communicate” to staff and others, and “instill a culture that says it is good to help make the company stronger.” Another suggestion: “List every benefit the company offers and quantify it.” And also this: “Strengthen your relationship with your banker.”
In general, he said, “prediction drives what you do in your company. The key people have to agree on the overall direction.”