What Is Driving Our Growth?
There are countless reports of an underinsured America. Many of the people who need what we have to offer may be very different from those whom the industry has been successful in serving for decades. What markets are experincing growth and how can you tap into it?
What Is Driving Our Growth? By John Vaccaro
Increased accessibility and the introduction of new and digital channels are helping us reach a widening consumer base.
Let’s face it. There are countless reports of an underinsured America. The bar is set high and growing higher for the insurance industry, as it should be. And many of the people who need what we have to offer may be very different from those whom the industry has been successful in serving for decades.
This presents an opportunity for financial professionals across the country and for companies like MassMutual. Over the past decade, we have added more than 880,000 new policies and more than $490 billion in new insurance protection for our customers, demonstrating our ability to address the vast financial unpreparedness in our country. According to the LIMRA 2016 Trends in Life Insurance Ownership Study, for example, more than 37 million households have no life insurance protection.
And for the first time in its history, MassMutual has topped the list for placing the most whole life insurance business in the industry, according to LIMRA (as of December 31, 2016). The company experienced a 34 percent growth rate in 2016, compared to an industry average of 9 percent. This marks more than a decade of industryleading growth for our whole life insurance offerings, and the momentum continues in 2017.
Where Growth is Occuring
Not surprising, the growth cuts across a broad range of consumer groups. Of the new whole life insurance policies issued in 2016:
- One-third (36 percent) were purchased by people of non-Caucasian descent.
- Just over a quarter (27 percent) of policies were purchased by people ages 25 to 44.
- Sixteen percent were purchased for children, grandchildren or other young family members under the age of 17. This helps ensure future insurability and establishes a strong financial foundation early on.
- Families with members with special needs continued to appreciate the value of permanence with lifelong protection, living benefits, and guaranteed death benefit, as well as cash value growth and premium.
- Guaranteed acceptance, 10-pay, high-early cash value, survivorship and hybrid policies with long-term-care features stood out.
REACHING TODAY'S CONSUMERS
Increased accessibility has been a key driver in reaching today’s consumers. The industry’s traditional model of face-to-face consultation remains strong, with momentum being fueled by a record 9,000-strong financial professional network resulting from our acquisition of the MetLife Premier Client Group last summer. Through an expanded network, consumers in more communities across the country now have direct access to holistic financial-planning services that encompass insurance, investment, retirement and estate planning.
Of the new whole life insurance policies issued in 2016, one-third were purchased by people of non-Caucasian descent.
Transformative ideas and approaches have also fueled momentum, including the introduction of new and digital channels, which represented nearly 30 percent of new MassMutual policies last year, including whole life insurance.
From numerous investments in startups, to using data science to build business-changing models, to appealing to younger generations through online channels, progressive methods are helping companies like us reach and protect a widening consumer base.
SEIZING THE OPPORTUNITY
So what does this mean for today’s financial professionals? The opportunity has never been greater. The stakes are high and the opportunity to serve these customers is just as high.
Many in today’s younger generations are balancing student loan payments while getting started in adulthood. Older generations are balancing the care of aging parents alongside retirement and college planning. Retirees are balancing a new way to manage an income stream with healthcare concerns and desire to pass along wealth optimally to loved ones. And families are making tradeoffs between day-to-day spending and long-term planning and emergency savings.
In fact, a recent study commissioned by MassMutual revealed that over three in four (78 percent) people rate a stable income source in the event of something unexpected as a high priority, with saving for retirement (74 percent) and paying for child’s higher education (73 percent) close behind.
While the world evolves and technology advances and online channels grow, there is plenty of opportunity for financial professionals to help today’s customers achieve financial well-being at all stages of their lives.
FACTORS FOR GROWTH
So what are some of the steps you can take to help grow your business? Here are three you can take right now.
1. Walk the talk. Own it first. When you’re personally invested, you come from an authentic place when educating others on the value of what you have to offer.
2. Understand needs and goals before suggesting options. Always share the pros and cons of various approaches as well as other or next options that should be considered to further secure a financial plan.
3. Be thorough while keeping it as simple as possible. Leverage technology to the fullest extent and in a way that reflects how your clients wish to be served.
John Vaccaro is head of MassMutual Financial Advisors.
This article appeared in Advisor Today.