Click here to see this article in our upcoming redesigned website

Carriers Eye Simpler Products In 2014



Financial advisors can anticipate that life and annuity carriers in 2014 will develop simpler products for consumers, and will develop new products targeting underpenetrated market segments like Generation X, according to a new report from the Deloitte Center for Financial Services.

The strategy is designed to grow the size of the total life insurance market pie as low interest rates dampen growth of life carriers, the report said.

“The goal will be to make more efficient use of capital as well as expand the overall market pie by reaching out to underserved consumer segments in innovative ways,” wrote Gary Shaw, vice chairman and U.S. Insurance Leader of Deloitte LLP, and Jim Eckenrode, executive director of the Deloitte Center for Financial Services.

Products that were once lucrative, small niche markets, and tweaks to operating strategies are “no longer producing sufficient returns,” according to Shaw and Eckenrode, lead authors of the report titled “2014 Life Insurance and Annuity Industry Outlook: Transforming for Growth, Getting Back on Track.”

Gen X buyers, historically underpenetrated, “provides a tempting target for carriers, as well as life and annuity agents and other intermediaries looking to increase their client base,” the industry analysts wrote.

Tacking toward simplicity, for example, Nationwide last month announced the launch of an indemnity-style benefit to its long-term care coverage in which policyholders don’t have to submit monthly receipts for reimbursement.

The past few years have seen many more carriers adding long-term care benefit riders to their policies to sweeten the appeal of their base life policies.

Still, Shaw and Eckenrode, indicate that carriers are going to have to do more than settle for “subtle changes along the edges.” Wholesale revamping of products, core computer systems and distribution channels need to be part of the 2014 agenda, the industry analysts wrote.

That’s because big, structural challenges remain in the area of talent management and recruiting, even with an ample supply of qualified labor. Life and annuity carriers face a shortage of workers with skills in analytics, predictive modeling and mobile technology, said Andy Liakopoulos, a principal in the Human Capital Practice of Deloitte Consulting, who is quoted in the report.

Investment banks, mutual funds, hedge funds and high-tech companies compete with the insurance industry for the same candidates, and the siloed nature of the industry limits its ability to redirect top talent to solve more pressing needs.

BRAMCO & Prudential: An Alliance For Life

“The rapid adoption of a data-driven initiative has widened the talent gap for insurers, given the economy-side demand for individuals with analytical skills,” said Liakopoulos.

is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. Cyril may be reached at

© Entire contents copyright 2014 by Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from


  More Top News

More Top News >>
  Most Popular Top News

More Popular Top News >>
Hot Off the Wires  Hot off the Wires

More Hot News >>

insider icon Denotes premium content. Learn more about becoming an Insider here.
BRAMCO & Prudential: An Alliance For Life