The growth of technology, a slowing equity market, federal employer plan initiatives and continued rising interest rates spell growth in life insurance, and more access to retirement plans, according to a new report from LIMRA.
U.S. life insurance sales will grow 4% to $15 billion in 2019, fueled by increases in disposable income and bond rates combined with low unemployment levels, according to LIMRA’s annual predictions report released Tuesday.
The report, “2019 Predictions: More Than a Crystal Ball,” by LIMRA Research Director Scott R. Kallenbach, forecasts good news for retirement savings.
The new year will bring an uptick for private sector employees’ access to workplace retirement savings plans stemming from what LIMRA sees as an increased interest in multiple employer plans, or MEPs.
LIMRA also attributed the growing interest to FinTech’s rise and MEP federal initiatives.
These include President Trump’s Sept. 5, 2018, executive order to expand the number of small employers who can offer MEPs and the subsequent proposed Department of Labor rule that would expand MEPs to workers at smaller employers.
The DOL announced a proposed rulemaking following up on the “Securing Americans’ Retirement,” pronouncement with a platform making it easier for small businesses to offer retirement savings plans through these association retirement plans in October, as ThinkAdvisor reported at the time.
However, the story may be changing for the popular indexed universal life products, whose growth has been fueled by the low interest rates and the bullish stock market over the past decade, according to LIMRA.
The IUL market will still grow, but its “driving forces” will change, said LIMRA. It bases its economic outlook on slower equity markets and rising interest rates on data from Oxford Economics, which sees equity markets to slowing, but interest rates rising.
On the technology front, artificial intelligence (AI) applications and usage will grow in the coming years, being used in automated underwriting and other extensions of predictive modeling, according to LIMRA.
The use of AI will become more commonplace among companies, according to the report.
Companies that embrace ethical, authentic behavior and aim for greater social good will themselves be more and more embraced by consumers going forward, according to the report.
LIMRA also sees companies uniting more effectively to combat continued fraud and fraud attempts.
— Read LIMRA Aims to Surf the Tech Wave, on ThinkAdvisor.