2013 Life Insurance & Annuity Industry Outlook
Considering new directions in a recovering economy
Life and annuity insurers face enormous challenges in 2013. A U.S. economic recovery has been underway for quite some time, but it’s been slow and unsteady. Meanwhile, low interest rates and an uncertain stock market are making it very difficult for carriers to reliably offer guaranteed rates of return in their policies.
With millions still out of work or underemployed, and many more focused on repaying debts, a lot of consumers have shorter-term financial priorities to worry about other than life or annuity protection. The industry’s growth prospects are further hindered by events outside the country, which threaten to undermine or perhaps even derail the fragile U.S. recovery.
To adapt to this “new normal,” there are actions carriers can take not only to leverage opportunities emerging in the short term but to set the stage for longer-range gains, in part by improving their technology and talent base as well as their marketing and distribution capabilities.
In 2013 senior-level life and annuity insurance executives are likely to confront a series of 10 interdependent challenges that should be addressed for insurers to thrive, cited in the accompanying graphic below.
There are undoubtedly additional threats and opportunities on the radar of individual carriers. But few insurers will be able to avoid this list of 10 challenges, while those that can overcome them and even capitalize on the opportunities that emerge will be far better prepared to take on whatever other crises emerge in 2013 and through the rest of what could be a turbulent decade indeed.