Insurance executives are pessimistic about 2011, according to a survey released Wednesday by LIMRA. The survey found 59% of executives believe overall sales will be flat, and 68% say sales will stall.
Middle market sales, however, are expected to grow by a majority of respondents. LIMRA noted that the number of households that are uninsured or underinsured is at a 50-year high.
One-third of respondents said indexed insurance products had the most potential for growth, followed by 27% who said whole life insurance had the most potential. Low interest rates and the resolution of Rule 151A make indexed products more attractive to producers, according to LIMRA.
"Generally speaking, significant growth in life insurance sales is driven by new products in the market," Robert Baranoff, LIMRA senior vice president and co-author of the report, said in a press release. "While overall sales may not substantially grow in 2011, LIMRA predicts that certain products will stand out in this low-interest environment."
Recruiting suffered in 2009 and the first half of 2010, according to LIMRA, and executives don't expect that to turn around in 2011. Over 75% of respondents said they believe the sales force will shrink. Only 73% of companies are actively recruiting, according to the survey, and just five companies account for 65% of new hires.
Banks will be a major source of insurance products, though. Almost 70% of executives said bancassurance will grow in 2011. LIMRA notes that interest rates will be a "key driver" of whether bancassurance continues to grow.
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