Spotlight Issue 2 - 2012
As they say, the only constant in life is change. That is as true in our industry as in any other. However, it is also true that as demographics are changing, families are changing and lifestyles are becoming more diverse, some themes remain constant. People still have the need to protect assets, the commitment to make sure that loved ones are taken care of, and the desire to contribute to a favored cause.
After many years in the life insurance and annuity business, I have attended countless meetings, presentations and seminars. These same themes still resonate with producers. Earlier this year I had the opportunity to attend the Society of Financial Service Professionals (FSP) Arizona Institute. Planning tools and techniques are always an interesting topic of discussion and this meeting was no exception. What I found even more interesting were not the tools and techniques, but the unique situations that were addressed. It brought home the realization of how much the market for insurance and annuity products is changing.
The presenters were excellent, as expected. The topics were a great reflection of the changes in demographics, technology and legislation that are impacting our industry. Topics as diverse as Medicare Planning with Annuities, Planning for the Changing American Family and The Missing Link in Networking all had a common theme— things have changed, but the need for planning and good planning tools remains.
Let's take a moment and look at changing demographics. Americans are living longer than ever before. I recently read that there are over 40 million people in the US that are over age 65. With the start of the baby boomer generation reaching age 65 in 2011, AARP reports that approximately 8000 people per day will reach retirement age for the next 18 years. The population over age 85 is growing as well. As more individuals join the age 65 and older ranks planning for longer retirements, long term care and the life style changes that this aging population will experience is a growing market. The increase in this age group is also reflected in the surge of assisted living and specialized care facilities aggressively marketing their services.
The US household is changing as well. The presence of non- traditional households continues to rise. In this country there are over 475,000 grandparents raising grandchildren. The number of female headed households has increased, as has the number of single fathers raising children and the number of non married couples living in the same household. These non-traditional households have many of the same needs for protection and asset preservation as any other client. Your producers are working with grandparents raising, and wanting to protect and provide for, grandchildren, blended families with step children or perhaps couples who choose not to marry, but still want to provide for their loved one. The planning opportunities and challenges abound.
Another changing dynamic is women who are better educated, wealthier and making more financial decisions than ever before. Women are earning more bachelor's degrees than men and more advanced degrees. This is significant in several ways. Better educated people tend to have more earning power and better educated women are more likely to share in or make family financial decisions. This has far reaching impacts in the marketing and sales of financial products. One cannot make assumptions about who the decision maker is in a household.
Lastly there is a significant market in the US among foreign born residents. There are 38 million residents of the US who were born elsewhere. Primary sources of this population include Latin America and Asia. Cultural differences in this population have led some carriers to tailor marketing specifically to this demographic. Statistics show this population to be growing.
There are a wide range of opportunities for carriers and producers to make contact with these diverse groups of prospects and clients. Many of those in the older demographics are using technology as never before. While carriers are grappling with the compliance aspects of Facebook, Twitter and LinkedIn, many producers and prospects are using these tools in various ways. How will you and your producers establish a presence in the many social media sites available? What requirements will your producers have to meet? This area is evolving quickly and will continue to change and grow as people become more connected.
Your producers are working with these diverse groups. How are they marketing your products? What networking tools are they using? What support are you providing to them as they address the changing demographics of the US? For example, retirement planning takes on a much longer horizon based on the current statistics. Will your clients be working longer? Will they be caring for grandchildren or a partner who needs specialized care? The opportunities and challenges are many. With this changing market your producers will appreciate the support you can offer. The extensive options to provide supplemental marketing materials and communication via Foresight can be part of this support. The ability to provide a customized illustration along with supplemental materials will help your producers be more successful in marketing your products.
Tracy McGurran
EVP, Professional Services
CLU, ChFC
Insurance Technologies