Carmi Margalit, on the left, moderated a discussion with Mark Mullin of Transamerica (center) and Mark Pearson of AXA Equitable (right). (Photo: Allison Bell/ALM) Carmi Margalit, on the left, moderated a discussion with Mark Mullin of Transamerica (center) and Mark Pearson of AXA Equitable (right). (Photo: Allison Bell/ALM)

Two life insurance company leaders told an audience full of money managers that the world needs annuities, and that the life industry needs to do better job of explaining how important and necessary annuities are.

Mark Mullin, the chief executive officer of Transamerica Corp., and Mark Pearson, the CEO of AXA Equitable Holdings Inc., talked about society’s need for annuities Thursday, in New York, at an insurance conference organized by S&P Gobal Ratings.

The conference brought insurance company financial executives together with the investment bankers and other professional advisors that help insurers get financing.

In the United States, the baby boomers are now starting to draw on their 401(k) plan assets, and they need help with income planning, Mullin said, during a life company CEO panel discussion.

“We have a moral responsibility to help people retire with grace and dignity,” Mullin said.

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Pearson said that many of the 10,000 Americans who retire each day want to travel, take classes, or start new businesses.

“This requires funding,” Pearson said. “We’re very positive about annuities because of the good they do for society.”

Pearson said later during the session that he is happy to see the American Council of Life Insurers and other organizations working to explain the value of annuities.

“There are great products,” Pearson said. “Where else are you going to get guaranteed retirement income?”

Here are four other things Mullin and Pearson talked about during the panel discussion.

1. Memories of the Great Recession Annuity Issuer Shakeout

Mullin and Pearson agreed that the annuity market is far more sober than it was in early 2007, before the 2007-2009 Great Recession rolled in.

Although the market is now more active than it was, “it’s not irrational,” Pearson said.

2. The New Players

Mullin and Pearson agreed that private equity funds and other alternative capital providers have a place in the annuity market.

Mullin said he would like to see a consistent regulatory environment apply to both the traditional players and the new players.

“Our industry is based on trust,” Mullin said.

Buyers of life insurance companies, and of blocks of life and annuity business, need to consider their overall risk profile, Mullin said.

3. Insurtech

Mullin and Pearson said that life insurers have to balance the need to innovate and become more efficient against the need to respect how consumers want to do things.

Some criticize life insurers’ dependence on traditional agents and advisors, but “what’s driving it is that consumers are still very much wanting a human interface,” Pearson said.

Mullin said that the same consumer might want a combination of access to online systems, telephone call centers, and face-to-face meetings.

“I think you have to be omni-channel,” Mullin said.

4. Facebook, Amazon, Apple, Netflix and Google (FAANG)

Mullin said he sees any FAANG interest in financial services more as an opportunity than as a threat.

To become life and annuity writers, the FAANG companies would have to face regulatory moats that are far more complicated than the antitrust barriers they sometimes run into now, and they would have to put up with return-on-equity ratios around 12% to 13%, Mullin said.

“That doesn’t sound terribly exciting,” Mullin said.

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