Robert A. Kerzner

President & CEO

LIMRA, LOMA & LL Global

August 17, 2017
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77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16

▬Premium

Source: LIMRA’s Individual Life Sales Survey and LIMRA estimates

Total U.S. Individual Life Sales

Policies (millions)

▬ Policies

Premium ($billions)

30yr T-Bill 

14% 

UL 

replacing 

WL

Weak 

economy

Market 

conduct

issues

S&P 

↑ 20% 

per yr

Growth of 

LTG UL

Great 

recession

1

st 1

st Quarter 2017: -2% quarter 2017: +5%

Annualized premium CAGR: +1.62%
U.S. Individual Life Product Market Share

1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016

Variable

Products

Universal

Life

Term

Whole Life

Annualized New Premium ($Billions)

Source: LIMRA’s Individual Life Sales Survey and LIMRA estimates
$3.0 $2.9 $3.1 $3.2 $3.2 

$3.6 $3.9 

$4.2 $4.4 $4.6 

$5.1 $5.3 

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Whole life sales

(Annualized Premium)

U.S. Whole Life sales have increased more than 

80 percent since 2006 

Source: LIMRA’s Individual Life Sales Survey and LIMRA estimates
Cash Accumulation Products 

Increasing Market Share 

24% 23% 17% 13% 15% 16% 20% 25% 22% 29% 34% 41% 46%

37%

28% 36% 40% 38% 36% 27%

29% 39%

34%

35%

36%

34%

38%

49% 47% 47% 47% 48% 53%

45% 39% 37% 29%

23% 20%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Cash Accumulation Current Assumption/Other Lifetime Guarantee

UL Sales by Product Type

Source: LIMRA’s Individual Life Sales Survey and LIMRA estimates
Middle market owns the majority of permanent 

life insurance policies

14.7%

57% 28.3%

Lower

Upper

Middle

Market share permanent life insurance policies by household income 

Source: 2016 Facts of Life and Annuities, LIMRA
Fixed annuity sales surpass variable annuity sales in 2016 

Source: LIMRA Secure Retirement Institute, U.S. Individual Annuities survey. Dollars in Billions

Total U.S. Annuity Sales 

$73

$109 $111

$82 $81 $72 $84 $96 $104 $117

$184

$156 $128

$141 $158

$147 $145 $140 $133 $105

$257 $265

$239

$222

$238

$220 $230 $236 $237

$222

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Variable Fixed

The last time fixed annuity sales surpassed VA sales was in 1992
Variable annuity sales have declined 

42 percent since 2006

$111 $117 $129 $133 $137

$160

$184

$156

$128 $141

$158 $147 $145 $140 $133

$105 $93

$78

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 *2017 *2018

Source: LIMRA Secure Retirement Institute, U.S. Individual Annuities survey. Dollars in Billions

Annual Variable Annuity Sales

Variable annuity sales decline to lowest levels since 1998
Sales Projections for 2017 and 2018

Source: LIMRA Secure Retirement Institute Analysis

Overall annuity sales will drop 10-15% 

in 2017 and 2018
Source: 2016 Life Insurance Ownership in Focus - Households

The US life insurance ownership remains at its 

lowest level

46%

54%

53%

52% 52%

49%

46%

[VALUE]+

[VALUE]+

62%

55%

50% 50%

44% 44%

83% 83%

81%

78%

76%

78%

70% 70%

30%

40%

50%

60%

70%

80%

90%

100%

1960 1976 1984 1992 1998 2004 2010 2016

Percent Owning Life Insurance

*Includes Individual, Group, SGLI & VGLI 

+ Individual Life Sold Face-to-Face through an Agent

Owns Group Life Owns Individual Life Owns Any Life*
60 million U.S. households need more 

life insurance...

Source: 2016 Life Insurance Ownership in Focus - Households

*Based on LIMRA Life Insurance Needs Model analysis

If it was easier – would they buy?
6 in 10 US households would experience a negative 

financial impact quickly if the primary-wager-earner died

15%

23%

13%

8%

4%

12%

25%

One

week

One

month

Six

months

One year Two

years

Five or

more

Don't

know

How quickly consumers would feel the financial impact from the loss of the primary wage earner. 

59%

Source: 2016 Insurance Barometer Study, LIMRA and Life Happens
13

Individual life insurance 

ownership by ethnicity

36%

47%

63%

52%

44%

Hispanic Chinese

American

Asian

Indian

African

American

U.S.

Population

(Percent of households)

Household income of $25,000 or greater

Source: 2016 Life Insurance Ownership in Focus - Households
Consumers understand the value of life insurance

Millennials 

(18-35)

Gen X 

(36-51)

Boomer 

(52-64)

Senior 

(65+)

Most people need life insurance 88% 88% 83% 82%

I personally need life insurance 78% 77% 63% 50%

I own life insurance 51% 62% 67% 65%

I own group life insurance obtained 

through an employer or labor 

union.

68% 64% 53% 31%

I own individual life insurance that 

was individually purchased, and 

was not received as a benefit of 

employment.

55% 65% 76% 84%

Source: 2016 U.S. Life Insurance Ownership Study, LIMRA
What people say and do are entirely different things...

U.S. households that say they 

need more life insurance

U.S. households that say they 

will purchase life insurance 

with the next 12 months

U.S. households that actually 

buy life insurance

50% 

25% 

10% 

Source: U.S. Life Insurance Ownership Studies, LIMRA

U.S. households that say they 

need more life insurance

U.S. households that say they 

will purchase life insurance 

with the next 12 months

U.S. households that actually 

buy life insurance

41% 

45% 

10% 

2010 2016
18,700,000

New LIMRA/Maddock Douglas study finds

PEOPLE ARE “STUCK SHOPPERS”

56%

49%

42%

Millennials

Married

With Kids

Source: Get Real Already: Industry Innovation Through Authentic Language. LIMRA & Maddock Douglas, 2014
4 in 10 Millennials still want to buy face-to-face

Most Preferred Way to Purchase Life Insurance by Age

Age Group

Total Millennials Gen X Boomers Seniors

In person (outside of the workplace) 

through a financial advisor or agent 51% 42% 47% 55% 73%

Complete an online form

21 22 24 22 11

Through my workplace 11 15 14 7 3

Complete application (offline) and email it 

to an insurance company/professional 6 10 6 5 3

Complete an application and mail it to an 

insurance company/professional 6 4 5 8 8

Over the phone 5 7 4 3 2

Source: 2016 Insurance Barometer Study
Almost half of millennials say that they don’t buy life insurance 

because they haven’t been approached by a life insurance agent.

Source: U.S. Life Insurance Ownership Study (2016), LIMRA
256,735

144,600

1973 1975 1981 1983 1986 1989 1991 1993 1996 1998 2001 2004 2007 2010 2013

Sources: NOT constant groups of companies, Census of U.S. Sales Personnel, LIMRA [1973-2010]

U.S. Insurance Sales Professions, LIMRA [2013 Agency-building and home service combined]

The number of affiliated agents has 

declined more than 40 percent 
34

30 29

28

26

34

37

39

41

44

0

5

10

15

20

25

30

35

40

45

50

0

100

200

300

400

2000 2010 2015 2020 2030

U.S. population (millions) Recruits (000) actual and projected Recruits (000) needed to keep up with population growth

The Recruiting Gap

• U.S. Census Bureau and LIMRA’s U.S Recruiting Trends

Betterment now 

offering human advice 

with its robo
84% 82%

77% 71%

16% 18% 23%

29%

1998 2004 2010 2016

Buyers are adapting to direct-to-consumer 

life insurance initiatives

Face-to-Face Direct Channels

Source: 2016 U.S. Life Insurance Ownership Study, LIMRA

More consumers buying directly from insurers
Majority of Americans want to use technology in 

addition to a human advisor for financial guidance

54%

33%

11%

2%

A human relationship coupled with

technology is ideal

Requires a human relationship

Can be fully automated (e.g. based

on client demographics, lifestage,

etc.)

Other

Source: Northwestern Mutual's 2016 Planning & Progress Study
25

Emerging wealthy and high-net-worth investors 

prefer “hybrid” investment advice 

(a combination of traditional advisory services and low-cost digital tools)

More satisfied

More likely to seek help 

Source: Insight: New Face of Wealth Management, Accenture
Schwab combines robo with humans to 

create hybrid advice model

With a $25,000 minimum, Schwab Intelligent Advisory will provide 

clients a customized financial plan and ongoing live advice from 

certified financial planners.

Source: Investment News, Dec. 13, 2016
Raymond James to put 

“Connected Advisor” robo 

in advisers' hands

Connected Advisor is focused on three key areas:

• Greater automation to help advisors more efficiently manage their businesses 

and their clients’ basic investment management requirements so they can 

spend more time on building relationships and more fully 

understanding client needs.

• Increased collaboration through tools that support online communication 

and information sharing between advisors and their clients.

• Enhanced sophistication of proactive financial solutions through the use of big 

data to provide advisors with insights into their practices and their 

clients’ needs.

Source: Raymond James Press Release, Jan. 30, 2017

and
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“Consumers without significant 

wealth currently find it more 

difficult to access advice or 

support to meet their needs.”

- excerpt from final report

The middle market was left behind
29

Regrets?

Tracey McDermott

Acting Chief Executive 

Financial Conduct Authority

“The Financial Conduct Authority is 

examining the possibility that commission 

payments be allowed once again for 

certain investment or pension products.”

Source: “Financial Conduct Authority considering return of commission payments,” 

Financial Times, January 9, 2016


Historical Interest Rate Trend

1.00%

3.00%

5.00%

7.00%

9.00%

11.00%

13.00%

15.00%

17.00%

1790 1805 1820 1835 1850 1865 1880 1895 1910 1925 1940 1955 1970 1985 2000 2015

Interest rates represent 10-year Treasury rates beginning in 1962 and a proxy for prior years.

Sources: Federal Reserve Bank of St. Louis, Bloomberg and Arbor Research

1791

Fed gov't 

assumes

states’ debt 

1842

8 of 26 states

default on debt

Civil

War

1918

End 

of WWI

Depression

1945 End of WWII

1971

U.S.

abandons

gold 

standard

1981

Volcker 

rate hikes

2008

Great

Recession

begins

2016

1919

Spanish flu 

epidemic

Sept. 11,

2001
Rise of the Consumer 

Improving customer experience 

across the enterprise

Uber

AirBnB

Upwork

Task Rabbit

threadUP

Peerby

Millennials Drive the Sharing Economy

Rather than buy, 

Millennials share
Carpooling?

Need a designated driver?

Borrowing a friend’s car?

Get insurance 

only for the time 

you need it!

86%

CEOs who believe technology will completely 

reshape competition in the industry or have a 

significant impact over the next five years.

Source: PwC's 20th CEO Survey
Insurance companies using Amazon’s Echo to 

connect consumers with agents
Builds engagement 

Identifies cross-selling 

opportunities 

Generates referrals from 

friends and family

Transamerica launches 

voice ID for their help lines

“Implementing Voice Pass allows our 

customers to communicate with us more 

easily, and with added security...to 

enrich the overall customer experience.”
Agents engaging with their clients via social media
Top reason 

consumers shop for 

life insurance

41% 

cite life event

Source: LIMRA 2011 Buyer Nonbuyer Study
“$1 million in coverage approved within 15 minutes...”

In partnership with Generation Life (a 50-year-old insurance company 

that was recently acquired by Swiss Re), Quilt is targeting under-insured 

population of millennials can have the coverage they need.
Ladder sold $100 million in coverage in first 

100 days*.

*only available in California

“We’ve found that the faster 

we get a quote in front of 

someone, the more likely 

they are to buy.”

- Jamie Hale, Ladder CEO

Source: Nearly 40% of adults don’t have life insurance — these startups are trying to change that, 

MarketWatch, July 3, 2017

60% of its applications occur outside normal 

business hours
Fabric – a new online platform offering 

accidental life insurance

Policyholders can ‘upgrade’ to a 20-year Term 

Life policy, issued by Vantis Life 
Companies selling on the app include: American General, Assurity Life, Banner 

Life, Mutual of Omaha, Principal Financial, Prudential Financial, Protective Life, 

Sagicor Financial and SBLI

Tomorrow Ideas App offers 

wills, trusts, and life 

insurance in all 50 states.

“We've created an easy-to-use 

phone app that lets people do 

[insurance and estate planning] 

together.”

 - Dave Hanley, Tomorrow Ideas president/co-founder 
Lapetus introduces facial recognition into underwriting
7 in 10 consumers say they would buy a 

simplified life insurance product

10%

18%

51%

21%

Very unlikely

Somewhat unlikely

Somewhat likely

Very likely

Likely to buy life insurance priced without a physical exam

Source: 2017 Barometer Study, LIMRA and Life Happens

72%
Why consumers are interested in buying a 

product with simplified underwriting

45%

64%

64%

66%

67%

71%

It avoids the need for a face-to-face

conversation

It avoids the need to see a doctor

It avoids the need for a medical exam

It is unbiased and objective

It provides transparent explanations of risk

classification and product pricing

It is fast and easy

Benefits of simplified underwriting: Appeal to consumers 

Consumers who felt the benefit was extremely or very appealing

Source: 2017 Barometer Study, LIMRA and Life Happens
Launched in 2015 ─ $5 million in sales

Projected $30 million in 2016
Expanded to 33 states in 2016
Up to $1 million term life insurance coverage through 

online application with competitive pricing and no medical 

exam for a majority of people under 40.
“Most people overestimate the change that will 

occur in two years and underestimate the change 

that will occur in 10 years.”

Source: The Road Ahead, 1996

- Bill Gates, 1996