Industry Leader Forum: MetLife
With new challenges, often come new opportunities. This type of response has certainly been true with regard to the depressed economy. This economy has renewed people’s interest in the idea of financial protection. The guarantees afforded by insurance products are very appealing. This interest both in the individual and group marketplace spells opportunities for brokers and advisors.
The Appeal of Protection and Guarantees. It is notable that in the workplace, employees are taking more interest in what their employers are offering as benefits—even if they have to fund it themselves. MetLife’s 9th Annual Employee Benefits Trends Study (2011) found that 52 percent of employees are interested in a wider array of voluntary benefits that they can choose and pay for on their own. Specifically with regard to financial protection products, 54 percent say they believe it is important to have life insurance available through the workplace, even if they have to pay 100 percent of the cost, and even more—58 percent—say the same about disability income insurance.
The economy has also spurred greater interest in life insurance as an asset class. Marketplace volatility has investors looking for alternative places to put their money, and permanent life insurance products with minimum guaranteed rates can be a “steady” investment vehicle with tax deferral while also providing a needed death benefit.
In addition, when it comes to permanent life insurance sales, women represent a large, underserved opportunity. The MetLife study found that working women who do have life insurance mostly have term coverage. For example, 52 percent of working women who have life insurance have term life insurance, while only 22 percent have universal life insurance.
The study also found that while women generally have less life insurance coverage than their male counterparts, they are more concerned about the financial impact of their premature death to their families than men. In addition, the study found that 67 percent of working women are very concerned about outliving their retirement money.
With heightened interest now on financial protection, producers can discuss with women how permanent products can not only help accumulate money to supplement their retirement savings, but also help with a child’s education, as well as protect the family should the unexpected happen. A concentrated effort in approaching women with different messaging should help advance the industry’s overall efforts to narrow the underinsured gap.
Reaction to Health Care Reform. Health care reform is another area that has brought both challenges and opportunities, particularly for those of us in the employee benefits market. For example, according to the 2011 MetLife Broker and Consultant Study, nearly three-fourths of brokers and consultants expect their clients to rely on them even more three years from now than they do today, and 97 percent feel that they have worked hard to keep their clients up-to-date on health care reform developments. The study found that three out of five surveyed brokers and consultants expect that employer-paid medical insurance will still be an important growth opportunity in the next three years, but 73 percent are very concerned about reductions in medical insurance commissions in light of health care reform.
The most popular strategies identified by brokers and consultants in the study to increase profitability of their firms post-health care reform are enhancing consulting services, selling more voluntary and ancillary products, and playing a greater role in health and wellness. In addition, by 2013, more than half of brokers and consultants expect to see more opportunities to help clients with benefits administration such as enrollment, billing and claims.
The study also found that while participants may be wary of how health care reform might change their firm’s operating models, there also is an apparent confidence in their own ability to meet these and other challenges. [WJR]
January 2012 Issue of Brokerworld Magazine. Author’s Bio William J. Raczko Senior Vice President, MetLife