It's debatable if the fiduciary standard is 'higher' than suitability. But the better question might be, who's holding the bar?
Question: What are two trends that will dominate the life and annuity business in 2014, and why?
“The mobile network is one of the trends. It’s changing the things we do to accommodate the younger purchasers and the agents, especially those who use the iPhone and iPad. Buyers are already going online to learn about life insurance and compare prices. Soon the whole process will change —taking the app, submitting it over the net, and having the agent do the entire process — selling, e- signature, getting the app, and submitting it. We still deliver the policy to the agent who then delivers it to the customer. The agents will embrace this as long are they are involved. What the agents like is that it significantly cuts down on the communications they have with the home office, and that expedites the process. With the iPhone, for instance, they can email any questions or concerns they have about a case at midnight if they want — and get the answer back by morning. A second trend is growth in sales of fixed annuities. This is due to the economy, the low interest rate environment, tax deferral and the safety that’s due to the guarantee of principal.
—Neil P. Riordan, field vice president-marketing, Federal Life Insurance Company
“I watch for disruptive changes out there. Google could come into the U.S. market and completely change the life insurance business, for example. They already have plans to come into the auto insurance market and life insurance is second on their list. Or, Amazon could come in and starts selling life insurance in a radically disruptive way. It’s conceivable that we could see something like this happen in life insurance in the next year or two. Right now, the industry is not prepared for a dramatic shift like that. A second trend is the simplification of products to get to the middle market customers who aren’t buying life insurance. There are fewer agents in the business today so carriers are looking to use simplified products, simplified underwriting and simplified processes to reach this market. It’s the overall simplification of insurance that we will see.
—Kaaren Neunedorf, senior product manager-individual life and health products, CUNA Mutual Group
“Differentiation of distribution is one trend. There will be more non-standard distributors for life insurance products. For example Amazon could be a distribution channel that would be disruptive. MetLife already is selling its Term in a Box through Wal-Mart; they started testing it last year and they are still moving forward with it. I see more companies testing things like that. The distribution will change because the consumers are requiring it by the way they shop. Another trend is the stratification of consumers: How we engage with them (the different segments) will change in 2014.
—Steven Cvijanovich, executive client manager and senior vice president-Americas, Swiss Re