Everyone knows life insurance companies are battling. Many consumers are putting off buying life coverage, while some are suspending or even cashing in their policies. In the United States, more than 40 percent of adults have no life coverage at all—and the figure is rising.
At the same time, consumers seem more willing than ever to invest in their retirement. A global survey by Accenture last year found that most people realize they can’t depend on state or employer funds to preserve their standard living when they stop working—they have to take care of themselves. In fact, 54 percent said it was important that they save now for their retirement, and 60 percent said they needed to increase their level of savings by an average of 17 percent of their pre-tax income. I don’t need to tell you that this adds up to a lot of money.
This should be great news for life insurers, after all, retirement services has always been a significant contributor to their overall revenue. But in recent years their dominance in this sector has slipped, and today only 17 percent of consumers looking for help in sorting out their retirement needs would contact a life insurer as their first choice.
So on the one hand we have an opportunity of massive proportions, yet on the other, insurers, who should have been ideally positioned to capitalize on it, are finding themselves sidelined.
In this series of posts I’ll delve into the reasons why many life firms are becoming uncompetitive in the retirement market. I will discuss the far-reaching changes that are taking place, including the disruption caused by a radically different breed of competitors. And then finally I’ll propose three steps, which, I believe, are essential for any insurer that wants to be a serious contender for the massive pool of investment that consumers have earmarked for their retirement:
- Provide tailored, differentiating experiences that meet customers’ expectations.
- Collaborate with regulators to drive innovation that provides real customer value.
- Develop an ecosystem that meets more of the customer’s higher-level needs.
I hope you’ll stay with me over the next few weeks—it’s going to be a fascinating discussion!