ID 20 WINNERS — Q&A
Three-part Q&A from page 16
Hagelman, Jr.: The challenge has always been the necessity of
corporate profitability continuing to find common cause with
our core desire to leverage risk by building innovative products
that truly serve the needs of American Consumers.
Verbos: I expect 2020 will be another year of consolidation
across our industry, and especially across distributors as we
seem to continue our fight to find relevance and focus on
mergers, acquisitions, and “roll up” believing that the answer
is higher comp and that we can get this with more aggregation.
This claim that we need higher comp to compete and “buy”
business is making us our own worst enemy. If we would focus
on energy on finding something of value to deliver our clients,
compensation wouldn’t even be part of the conversation
but when we continue to forget that words like “margin
compression” only exist when a customer no longer feels the
cost is worth the spend, we’re going to continue to be in our
own way.
Distributors who can find a way to deliver value beyond
the comp will see significant opportunities. The organizations
that can successfully deploy technology to better understand
their business, their advisors, and their advisors’ clients will
ultimately find new ways to reach new consumers, create
efficiencies in processing. not so that they can decrease the
time spent underwriting an application, but to redirect how
they invest human capital and talent toward growing their
business will ultimately lead the path forward in this new
decade and re-establish the integrity behind our profession.
Unattractive rates
Moore: Continued low interest rates are one of the biggest
challenges the life/annuity industry face. Rates on annuities
have become downright unattractive, but that has also
stimulated innovation such as the structured annuity product.
On the life side, the same unattractive rates plague product,
but regulatory requirements for 2017 CSO and Principle-
Based Reserving have made the challenge to offer “attractive”
products a monumental exercise. It will be interesting to see
innovation of the life side, as a result of these trials.
Rubin: The interest rate environment has made it tough to
rely simply on caps/rates to position product, but I see this
as an opportunity to get back to the basic concepts of what
the products we recommend were built for: down-side
protection, tax deferral, tax-leveraged wealth transfer and
household protection. IT makes us all step our game up while
recommending indexed annuities and life insurance the way
they were originally intended.
Garcia: The headwinds that the insurance companies are facing
are with the continued low interest rate environment, creating
a lot of margin and resource pressure on their P&Ls. While I am
not meaningfully concerned about any companies defaulting, I
am sure we will see some M&A activity or continued sell off of
blocks of business causing profit pressure.
Sladek: If I am being honest, I would have to say longevity is the
biggest challenge. The low interest rate environment is making
it harder and harder to keep carriers profitable, and we should
all be concerned about that. Carrier profitability is key to all of
us honoring our commitment to our policy holders and clients.
Pam Sheehan
Senior Director, NAILBA ID Media Network
[email protected]
Look to the Q2 issue of
Perspectives magazine for “Genie in the bottle”
PART 2:
18
Perspectives
Q1 2020
Impact of new regulations