What’s Coming Down the Producer’s Pipeline in 2012?

December 21, 2011

By Ray Ohlson

The past few years have been trying for the world’s economy. We still have a very high unemployment rate and an anemic economic growth rate. And just when we think that our financial markets are bouncing back, we have another setback – the interest rate environment.

Interest rates are at, or near, an all time low and Americans’ retirement plans are still suffering from a lost decade in the stock markets. All of this has made for a very uncomfortable retirement for many. It also provides a scary outlook for those nearing their target retirement dates. I think it’s safe to say that America is facing a crisis in the financial confidence environment.

The avalanche of boomer retirees is bringing about a desire and need for products that are safe and predictable. So, what does that mean for the insurance industry – particularly those of us that make a living offering these products?

Here are 10 of my predictions for 2012:

  • You’ll need to have a brand. Your prospects will be asking, “Who are you and what do you stand for?” The consumer will (under their breath) ask those questions when you offer solutions and products. They will say, “So what. What’s in it for me?”
  • The day of the ‘one size fits all’ product is gone. Prospects in 2012 will buy programs that are tailor-made for their needs. They are becoming keenly aware that it’s not the economy…but the “econo-me”.
  • An agent or business without a website is not a business. Enough with the excuses. It’s easy and inexpensive to get in the game.
  • Put your golf shirts and casual clothes back in the closet. People want to deal with people that look professional. Casual dress worked well when the economy was thriving but it is different today.
  • Agents will align with marketing organizations that offer more than just product and commission. They are looking for assistance and a partnership approach. “Independence with Affiliation” will be the desired relationship.
  • Suitability standards will be more stringent, compensation (commission) structures will be subject to change. We will see a ‘leveling’ approach and possibly a reduction in total commissions. And, I foresee an ‘asset under management’ approach to the commission payments on fixed annuities.
  • Products will become more consumer-oriented. The insurance companies will be under the microscope too. They want policyholders to stay with them for a long period of time. And the boomers will demand quality.
  • Life insurance sales will surge in the boomer market. They are in need of coverage and it will be buying it from someone, somewhere else. The reduction of Social Security benefits upon the death of a spouse also indicates the need for additional coverage.
  • Online/offline transactions are evolving. Consumers will gather financial information online and execute the transaction offline. They will come prepared – which means it will also be the year of listening.
  • Heirs will inherit ‘tax time bomb’ annuities. Many annuities that are positioned to be passed down to other generations are actually tax time bombs. Much of this money will be moved to single premium life policies.

Yes, these are just my predictions for what will happen in our business during 2012. But there is one thing I firmly believe – it is over for the amateur producer that is ‘winging it’. Next year will truly be the year for true professionals. I believe 2012 will bring the best of times for us.

Raymond J. Ohlson, CLU, is president & CEO of The Ohlson Group, www.ohlsongroup.com.

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