AALU speaker: Watch for these 15 changes come 2020

The stakes, he added, are immense. Consider: now retiring baby boomers are transferring to the next generation their accumulated wealth, assets estimated at more than $30 trillion. To capture and retain the lion’s share of this market — and more generally, of assets destined to fund consumers’ retirement and financial protection needs — then life insurers and producers will have to keep pace in adopting technologies that can ease and speed underwriting, policy sales and practice managements.

With this as background, Gerrish offered his vision of the life insurance industry in 2020. If realized, here’s how the market will look in 5 years’ time:

• Uniform applications and secure e-signature will have eliminated old paper-based processes.

• Carriers and advisors will have instant access to medical records through a National Personal Medical Archive.  Streamlined databases will enable clients to apply for and get policies approved in a fraction of the time today.

• Multi-carrier permanent policy illustrations will be easily accessible. Monte Carlo illustrations will also avail producers of more intelligent policy forecasts.

• Clients will assess the quality of insurance professionals based in part on the advisors’ ability to provide multigenerational insurance and financial services over a period of decades.

• Most AALU members will no longer operate as independent producers, but rather as partners and associates of financial services firms structured like law, accounting and investment firms.

• In tandem with the shift in focus to multigenerational services, compensation will be structured to better align with advisors’ new business model.

• Level commission-based and AUM-based based fees will be fully disclosed. And by, generating a recurring revenue streams, commissions and fees will also enable advisors to more easily recruit and retain high-caliber professionals to sustain the business long-term.

• The industry position, that life insurance is now taxed appropriately, will gain currency among lawmakers. The products’ key tax benefits — income tax-free death benefits and tax-deferred growth of cash values — will be removed from Congress’ list of “tax expenditures.”

• The evolution of insurers’ underwriting, sales and service capabilities will enable better client experiences, at both the high and low end of the market, enhancing the industry’s value proposition and reputation.

• Policyholders will still be able to borrow against life insurance cash values, just as consumers use margin loans and equity credit lines.

• Women and minorities, who now comprise 5 percent of AALU’s membership, will increase to 30 percent. The average age of members will also have declined to 50 from 58.

• As the industry broadens its base of advisors demographically, it will better positioned to serve markets domestically and internationally. About 20 percent of new sales come from product sales in Europe and Asia.

• Continuing innovation becomes a signature, driving attribute of the industry, as evidenced through the implementation of personalized medicine, genomics and the science of gerontology to enable consumers live longer, healthier lives.

• New insurance products — including inflation-indexed annuities and life insurance products with health dividend riders– will better reflect Americans’ lifestyles and life, health and wealth expectancies.

“To sum up, the future of the industry and our association looks amazing, said Gerrish.”By 2020, we will be attracting the best and brightest young talent from all over the world.

“The days of young professionals leaving for Wall Street has changed because they now see our profession as one offering unlimited upside potential, flexible work-life balance and the ability to work with some of the most interesting people in the world.”

See also:

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