CHICAGO — Insurance and financial services companies need to focus on two separate strategies to effectively reach the two key generations, LIMRA President and CEO Robert A. Kerzner, CLU, ChFC, told an audience of nearly 1,000 financial services industry leaders as he opened LIMRA’s 100th Annual Conference in Chicago on Monday morning.
“Millennials and Boomers – because of their numbers – are where the action is,” Kerzner said. “Yet their needs, concerns and how they buy are so different, forcing companies to bifurcate their strategies.”
His remarks explored the impact of the two very different but influential generations – and how companies must respond to capture their attention.
Amidst challenging economic conditions, increased regulatory oversight and ever-changing technological advances, the retirement and life insurance industry is facing significant disruption and Kerzner challenged industry leaders to “think differently” about how to engage consumers and grow in this environment.
Citing various research, Kerzner demonstrated the unique needs and concerns of the two generations. From the way they travel and want to receive health care, to how they interact with each other and businesses, Kerzner showed these two generations have very different priorities and suggested companies need to stay abreast of new technology to remain relevant.
“You might think you are current because you have a strong social media program,” Kerzner said. “Change is constant. You may have to rethink your strategy. Last year, more people were using text messages than social media. In fact, texting is proving to be a more effective tool in reaching consumers.”
Research from Dynmark found that 98% of texts sent were read and 90% were read within three minutes of being received.
Kerzner devoted a large portion of the speech discussing the growing economic challenges of an aging society. He highlighted the massive expected costs of providing health care and long term care for Boomers as they age. He asserted the financial services industry is in a perfect position to help consumers mitigate these risks if companies focus on innovating products and services that will appeal to these seniors.
“Based on the population, it is estimated that more than 45 million American seniors will need long term care during their lifetime, yet LIMRA research indicates that only 7 million actually have long term care insurance,” he said. “Globally, the cost of long term care will rise to more than $2 trillion by 2030. We are looking at a problem of epic proportions – nothing like we have ever dealt with before.”
Consumers are most concerned about how they will take care of themselves when they are old and possibly suffering from Alzheimer’s or other debilitating ailments, he continued. “As an industry, we need to build completely different products that will help them address their biggest fears.”
DOL rule to ‘transform’ industry
Kerzner ended his remarks by focusing on the implications of the Department of Labor’s fiduciary rule, possibly the most seminal regulatory event for the industry in 40 years.
“This rule is just the first domino, causing a chain reaction,” Kerzner said. “It will undoubtedly transform distribution, products and indeed, the entire industry.”
At a time when the financial risks for people trying to plan for retirement are at their greatest, Kerzner stated that the new regulation would likely diminish consumers’ ability to access financial advice they want and need. He provided examples of changes already occurring in the industry – mergers and acquisitions, layoffs and reallocated resources – as a result of companies adapting to comply with this rule.
Despite all of the obstacles and challenges mentioned, Kerzner closed on a positive note. He reminded the audience of the industry’s long history of providing products and services consumers rely on for their financial security.
The LIMRA 2016 Annual Conference theme, “Future Forward. Accelerate. Innovate. Transform,” focuses on the unprecedented pace of change in the financial services industry and the need to innovate and transform business strategy to meet the demands of today’s consumer and future generations. The conference brings together leading experts and company executives to examine today’s most important issues, and to revisit, and possibly rethink, the ideas that have informed the industry’s strategies and tactics to date.
The event continues through Tuesday, and features keynotes from Condoleezza Rice and Tom Brokaw in addition to concurrent workshops and general sessions.