Forecast for Life Insurance Industry Challenging, LOMA Resource Survey Finds
Key decision makers from a cross-section of insurance industry companies participated in the 2009 forecast. According to participants:
In 2009, life insurance sales will hold steady, premium growth will be modest, but profits will decrease. Stock market volatility and the implosion of venerable financial institutions in 2008 have made consumers wary; consequently, variable products will be vulnerable as consumers move to more fixed products with guarantees. On the upside, whole life products from strong companies will do well. Term insurance will continue to do well as consumers look to keep expenses at a minimum. Immediate and fixed deferred annuity sales will be strong. Variable annuity products with guaranteed minimum withdrawal benefits (GMWB) or principal protection features will weather the storm, but expect to see new products in the very near future that offer reduced guarantees at a greater cost. The battle will intensify over who should regulate insurers-- the feds, the states or both.
"This clearly will be a challenging year for our industry," said
The executives think most insurance companies are well positioned to survive the current financial crisis. Nonetheless, companies will rethink the guarantees built into some products and they expect we will see some industry consolidation as smaller and financially challenged players look for an exit.
The technologies with the greatest potential to help the industry include straight through processing (STP), voice call recording analytics, self service technologies, nanotechnology, videoconferencing, semantic Web (also called Web 3.0), wireless devices, electronic signatures, and biometrics (for customer authentication). The industry's biggest roadblocks are legacy applications and traditional processing platforms.
The 2009 Forecast is published in the January issue of LOMA's Resource magazine. The complete article is on-line at http://www.loma.org/Resource.asp
Established in 1924, with 1,200 plus member companies in over 80 countries, LOMA is committed to a business partnership with its world-wide members in the insurance and financial services industry to improve their management and operations through quality employee development, research, information sharing, and related products and services. To find out more about LOMA and the learning opportunities it offers, visit LOMA's Web site at http://www.loma.org
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