A ‘Quantum Leap’ Into Retirement Research

By Cyril Tuohy

InsuranceNewsNet

Robert A. Kerzner, president and chief executive officer of LIMRA/LOMA, said the organizations would take a “quantum leap” into retirement research and data analysis.

In the past, much of the work conducted by LIMRA/LOMA has been focused on life insurance research, but the exploding need to help Americans prepare for retirement has added to the emphasis on retirement research.

“We’ve been moving it along at a slow, steady speed over the past five years, but we are doing things to take a quantum leap,” Kerzner told InsuranceNewsNet after his second-quarter industry briefing in mid-May.

Three initiatives are underway, he said. LIMRA, based in Windsor, Conn., employs a staff of more than 200. The organization will hire more researchers to expand the scope of its research. The organization already employs scores of analysts, researchers, editors, consultants, meeting planners, and library and information specialists.

LIMRA also has formed “a very high-level retirement advisory board” staffed with senior people from institutional and retail financial services companies, as well as insurance companies. LIMRA/LOMA will also create the Secure Retirement Institute, which Kerzner described as “a separate entity” using data collected from both organizations.

LOMA, based in Atlanta, is more focused on management, education and operations research. Both organizations were once separate, but merged several years ago. They operate as subsidiaries of LL Global Inc.

While LIMRA often has been top of mind for life insurance, that “isn’t good enough anymore. We want to be top of mind when it comes to retirement,” Kerzner said.

The baby boomers, 77 million strong, are part of the reason for the burgeoning retirement market and, as they begin retiring in bigger numbers, insurance companies are looking to meet their needs. Behind them are Generation X and Generation Y. Together, Gen X and Gen Y are about 107 million strong.

Surveys show, however, that millions of Americans across all generations are going to need help with retirement, as many Americans have not prepared adequately for it.

From the perspective of the financial services industry, those numbers represent a trillion-dollar income opportunity, Kerzner said.

For organizations that represent primarily the interests and workings of the life insurance industry, expanding into retirement is a natural offshoot for them and the 1,300 members they represent, but industry experts note LIMRA/LOMA are moving into a crowded field.

Do LIMRA and LOMA run the danger of creating a turf battle with, say, the Investment Company Institute, which represents the mutual fund industry? Or with the Employee Benefit Research Institute (EBRI), which already provides retirement data widely cited by the industry and consumers alike? Then there are data clearinghouses serving pension funds, and the government Pension Benefit Guaranty Corp., all of whom can dig into mountains of retirement data.

Kerzner sees no reason why anyone should mind if LIMRA expands into retirement. “Others may feel that we’re coming somewhere where they are, but that is certainly not our intent,” he said. And on the contrary, there are many new opportunities for LIMRA to share the data with other organizations.

“We prefer to work with other trade associations collaboratively,” he said. “EBRI does great research — they are very focused in the (retirement) plan area. We could work together.”

Financial advisors, he also said, would benefit “unequivocally” from LIMRA/LOMA collecting retirement data as LIMRA already represents many life and annuities brokers. Advisors would have access to even more information, which they could then distribute to retailers' brokers, who in turn would use the information to better target their retirement products.

At its core, LIMRA/LOMA’s move into the retirement space isn’t about muscling in on the retirement sector. Rather it’s an attempt to expand the mission of the organizations to keep up with the changing needs of members.

“It’s much more about where we think we should take the associations, not just about what the members are saying today,” Kerzner said. “It’s much more strategic.”

Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at [email protected].

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Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at [email protected].