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Traditional Life Savings Tools ‘Face Extinction’: Consultant

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The Boston Consulting Group has posted a new video that shows how the world looks now to BCG’s top life insurance strategist in Europe.

Walter Reinl, the executive director of BCG’s life insurance practice for continental Europe, works out of Zurich. Before he went to work for BCG, he was the head of insurance group planning at Allianz, an insurer based in Munich.

Reinl, who has a bachelor’s degree in classics from Cambridge University, sees the aging of societies and low interest rates leading to a dramatic shift in how life insurers operate.

(Related: Here’s why life insurance agents must disrupt their approach to marketing)

In the past, Reinl says in the video, life insurers focused on offering retirement savers variable annuities.

European life insurers focused on offering savers whole life policies or participating whole life, Reinl says.

Now, “these kinds of products are basically facing extinction,” Reinl says. “Insurance companies will have to reinvent their offerings.”

Within the next 10 years, he says, most life insurers will have to move away from offering long-term accumulation products that pay a percentage of the interest earnings to the insurer, and toward fee-based products that pay immediate benefits.

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