What changes are in store for the life insurance market in 2010? Two leading experts share their outlook in Part 3 a preview to ASJ’s complete insurance market outlook, which will appear in our upcoming January 2010 national print edition.
The past year has been a difficult time for our industry. According to Fitch ratings, the top 25 companies lost $63 billion of capital. The ratio of capital required for every new dollar of premium generated is approximately 4.5 to one, or $4.50 of capital for every $1 of new premium. This loss has put a tremendous financial strain on the companies.
The result of this will be re-pricing of products, or perhaps the elimination or lowering of some product guarantees. Even with these changes, LIMRA predicts that in 2010 we will see a 10 percent growth rate in the sale of life products, especially those products that focus on guarantees and conservative investments.
Those agents and advisors who have been proactive in working with their clients through these troubling times have had a successful year, and will continue to do so. It will be important for agents to reach out to their clients in 2010 to provide guidance through these financially troubling times.
Marvin H. Feldman, president and CEO, LIFE Foundation
The financial crisis of 2008 and ’09 exposed previously unimagined vulnerabilities, greatly increasing the public’s awareness of financial risk and the need to mitigate it. Job insecurity has led many Americans to rethink their reliance on employer-sponsored benefits, such as 401(k)s and group term life insurance, to protect their retirement and their families. As Americans climb back from layoffs and investment losses, they will seek new ways to invest with some measure of insurance protection.