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A matter of trust. (Financial Planning).

In today's environment of complex financial products and an aging affluent population, insurers are finding new -- sometimes radical -- ways to help their clients plan for the future.

Insurers have grown accustomed to adapting as the individual marketplace changes, but increasingly sophisticated and affluent customers--facing ever-greater complexity in managing their wealth--have pushed companies toward reaching their clients through the financial-planning process. That imperative for change has sent the industry's heavyweights down divergent di·ver·gent  
1. Drawing apart from a common point; diverging.

2. Departing from convention.

3. Differing from another: a divergent opinion.

 paths with a common trait trait (trat)
1. any genetically determined characteristic; also, the condition prevailing in the heterozygous state of a recessive disorder, as the sickle cell trait.

2. a distinctive behavior pattern.
: many of them would have seemed extreme just a decade ago.

The biggest change has been the evisceration evisceration /evis·cer·a·tion/ (e-vis?er-a´shun)
1. removal of the abdominal viscera.

2. removal of the contents of the eyeball, leaving the sclera.

 of career agency forces, which were expensive and didn't meet the sophisticated buyer's expectations for objectivity. But while most big insurers have cut back on career agents or transformed them into independents, the companies have added their own, unique combinations of distribution strategies. Today, they acquire business not only through agents but through stockbrokers, bankers and independent, third-party professionals. Some insurers maintain sales forces-they call them "wholesalers"--to solicit and help those third-party advisers.

Mutual funds, stockbrokers, banks and independent planners provide plenty of competition, but insurers are doing well, especially in today's bear market in stocks, said Elda DiRe, a partner at Ernst & Young. "Consumers are no longer seeing insurance products as those with low rates of return, and they see value in the guarantees and death benefits," she said.

Insurers have always excelled at sales through planning, said Charles an Ratner an Ernst & Young principal and national director of personal insurance counseling. "Their agents are better trained than stockbrokers or people in banks, and they're more comprehensively trained than people at mutual funds. In many cases, they give financial planners Financial Planner

A qualified investment professional who assists individuals and corporations meet their long-term financial objectives by analyzing the client's status and setting a program to achieve these goals.
 a run for their money."

Insurance representatives might now have a leg up over competitors, given concerns about outliving retirement money, the costs of long-term care long-term care (LTC),
n the provision of medical, social, and personal care services on a recurring or continuing basis to persons with chronic physical or mental disorders.
 and security issues besides death, Ratner said. "Whether they can execute and get over the credibility problem, that's another matter," he said. Their "age-old problem" is the perception they're trying to solve every problem with life insurance.

Another weakness of insurer distribution is that advisers still are motivated primarily by sales as opposed to fee-only planning, according to according to
1. As stated or indicated by; on the authority of: according to historians.

2. In keeping with: according to instructions.

 DiRe. But in fairness, countered Ratner, so is most every other kind of adviser. "I'm more sympathetic to the agents' approach in the sense that necessity has caused at least the well-trained folks to look very broadly at their clients' situation," he said. "In many instances, the product is the solution, and [since] these folks can bring pretty good knowledge of planning with a breadth of product, they can really help people along." But he cautioned, "They're going to fall short when the planning becomes complicated."

Shopping Around

A tenet TENET. Which he holds. There are two ways of stating the tenure in an action of waste. The averment is either in the tenet and the tenuit; it has a reference to the time of the waste done, and not to the time of bringing the action.
 of insurers' switch to a financial-planning strategy is what the industry calls "open architecture," which means advisers are free to sell any company's products. Even New York New York, state, United States
New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of
 Life, which continues to fully support a strong career agency force, allows its agents to sell other products.

Boston-based John Hancock Financial Services The examples and perspective in this article or section may not represent a worldwide view of the subject.
Please [ improve this article] or discuss the issue on the talk page.
 Inc. in January 1999 converted its career-agent force into a general agency system under the trade name Signator as a way to offer "substantive, unbiased advice for both proprietary and nonproprietary products," said James Morris There have been several people named James Morris:
  • James Morris (North Dakota) (1893–1980), Justice of the Supreme Court of North Dakota (1935–1964), a trial judge for the IG Farben Trial
, chairman and chief executive officer of the Signator Financial Network. The nonproprietary products include mutual funds, traditional life insurance, universal life and variable universal life. The agents still have Hancock benefits, including health-care and 401(k) plans.

Signator agents' mutual fund sales are about 65% nonproprietary, Morris said. Agents use a mix of proprietary and nonproprietary funds in wrap accounts Wrap Account

An account in which a brokerage manages an investor's portfolio for a flat quarterly or annual fee. This fee covers all administrative, commission, and management expenses. Sometimes this also includes funds of funds.
. A wrap account has a minimum-required value that is low for a fee-only account. But Signator agents almost exclusively choose Hancock long-term-care insurance "because the product is so good," and more than 90% of the life insurance they sell is Hancock products for the same reason, he said. Signator agents also choose Hancock variable annuities Variable annuities

Investment contracts whose issuer pays a periodic amount linked to the investment performance of an underlying portfolio.
 most often.

"An advantage of the system is that this isn't a company that makes you go in one direction regardless of what's in the best interest of your client," said Morris. "This is not to say we aren't going to encourage people to do business with the parent company."

In its first three-plus years, Signator itself has changed significantly. Morris said it has transformed from an asset-gathering organization that sold variable annuities and mutual funds into an organization with full trading capabilities, including wrap accounts, separately managed accounts and fee-based planning, all initiatives to give Signator's agents the ability to "compete in a world that's not just an insurance world today." Part of the reason for the transformation is to be able to recruit and retain agents, Morris said. About 2,000 agents are registered with the organization.

Hancock uses several other distribution channels. For many years, it has worked effectively with the M Group, a large independent brokerage organization. In July 1999, it formed a direct brokerage for annuities, life and long-term-care products, which previously had to be sold through the agency system. The brokerage works with about 30 independent distribution organizations, the largest being National Financial Partners, Ogilvie Securities Advisors and Highland Capital. Morris described them as "boutique Boutique

A small investment firm specializing in offering specific, but limited services to a select number of individuals.

These investment firms are the alternatives to large financial supermarkets. They provide a highly personalized environment for investing.
 broker dealers" in the upscale market, meaning they tend to specialize spe·cial·ize
1. To limit one's profession to a particular specialty or subject area for study, research, or treatment.

2. To adapt to a particular function or environment.
 in protection sales vs. asset gathering.

Hancock has set up wholesalers to work with these companies. These organizations each might have 400 high-end producers, many of which are members of the Top of the Table, the upper echelon of Million Dollar Round Table members. The wholesalers often work individually with those producers, Morris said. Hancock also owns Essex Corp., a third-party marketer of annuities.

Changing Competition

Often, the independent producers have relationships with other financial services professionals, such as attorneys and accountants, and will bring them into a case as needed as needed prn. See prn order. . But Hancock has an advanced sales unit it can offer for estate and business planning that Morris said is "very supportive in nonqualified plans Nonqualified plan

A retirement plan that does not meet the IRS requirements for favorable tax treatment.
, corporate-owned life insurance Corporate-owned life insurance (COLI) is life insurance on employees' lives that is owned by the employer corporation. COLI was originally purchased on the lives of key employees and executives by a company to hedge against the financial cost of losing key employees to  and business-owned life insurance." Many producers use the advanced sales group, not just career agents or direct brokerage, he said.

Hancock's chief competitor in its career channel is the independent broker dealer, much more than wirehouses or career agents of other companies. "That's a 180-degree turn from 10 years ago," Morris said. "Then, 90% of the competition was other insurers and their captive broker-dealers."

Like Hancock, Minnesota Hancock is a city in Stevens County, Minnesota, United States. The population was 717 at the 2000 census. Geography
According to the United States Census Bureau, the city has a total area of 2.6 km² (1.0 mi²), of which 1.00% is water.
 Life spun off its career agents into an independent distribution arm with its own brand name. The broker-dealer organization is Securian, which Minnesota Life The Minnesota Life Insurance Company was founded in St. Paul, Minnesota in 1880 as a mutual insurance company. It was originally organized as a mutual because a general distrust of stockholder-owned businesses prevailed at that time and there was a shortage of people willing to buy  created in May 2001. It has 1,100 full-time representatives located in about 60 firms that are locally owned and spread across the country. The representatives still have health insurance and retirement programs through Minnesota Life, but the firms are owned by local management teams made up of people who never were employees of the insurer. Securian works with representatives to provide better training, including the credential credential verb To determine or verify titles, qualifications, documents, completion of required training, and continuing education, in those persons who function in a professional or official capacity–eg, ER physician, neurosurgeon, etc. Cf Credentials.  of certified financial planner Certified Financial Planner (CFP)

A person who has passed examinations accredited by the Certified Financial Planner Board of Standards, showing that the person is able to manage a client's banking, estate, insurance, investment, and tax affairs.
, said Peter D. Seltz, vice president of sales and marketing at Securian Financial Services Inc.

The representatives earn commissions from product sales, but income from fee-only planning will double this year over last year, Seltz said. The insurer uses its own wholesalers to compete with wholesalers from other companies for shelf space at Securian.

New York Life Insurance Co. is among the few large insurers that rely primarily on career agents. The company sells fixed annuities Fixed annuities

Contracts in which an insurance company or issuing financial institution pays a fixed dollar amount of money per period.
 through many distribution channels, including banks and stockbrokers, and it sells life insurance through membership associations and the AARP AARP, a nonprofit, nonpartisan national organization dedicated to "enriching the experience of aging"; membership is open to people age 50 or older. Founded in 1958 by Ethel Percy Andrus as American Association of Retired Persons, AARP now has over 30 million , but its agent force continues to lead the way.

Agents do have access to outside products, however, said President Frederick J. Sievert sie·vert
Abbr. Sv A unit of ionizing radiation absorbed dose equivalent in the International System of Units, obtained as a product of the absorbed dose measure in grays and a dimensionless factor, stipulated by the International
. Those products can be used for diversifying a sale or when underwriting Underwriting

1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt).

2. The process of issuing insurance policies.
 is unsatisfactory to a client. But agents are overwhelmingly loyal to New York Life and can sell it on the basis of the company's financial strength, highest ratings and strong brand, he said.

New York Life also offers its agents a registered investment advisory firm, Eagle Strategies RIA (Rich Internet Application) A Web-based application that approaches the speed and elegance of a local application. An RIA may refer to a browser-based application that uses AJAX or another enhanced coding technique. . Through the firm, agents can participate in fee-only planning and can offer a broad array of products, including outside life and annuities as well as securities. Sievert said about 250 to 300 agents have registered. The company has more than 10,000 agents in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area.  and 8,000 in other countries.

At one time, Prudential Financial Inc. had about 18,000 career agents. Today, the number is down to about 4,500 as a result of a major overhaul promulgated prom·ul·gate  
tr.v. prom·ul·gat·ed, prom·ul·gat·ing, prom·ul·gates
1. To make known (a decree, for example) by public declaration; announce officially. See Synonyms at announce.

 by Art Ryan after he became chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board.  in November 1994.

"The impact has been tremendous," said Jeff Draper drap·er  
n. Chiefly British
A dealer in cloth or clothing and dry goods.

[Middle English, weaver or seller of cloth, from Old French drapier, from drap, cloth; see
, vice president of financial planning Financial planning

Evaluating the investing and financing options available to a firm. Planning includes attempting to make optimal decisions, projecting the consequences of these decisions for the firm in the form of a financial plan, and then comparing future performance against
. "First, there has been an overall effort to provide choice, both for producers and clients, so the product architecture has been opened dramatically the past five years. Second, we've made a dramatic effort to get financial planning--needs-based analysis--to our clients." He said the program has included efforts to ensure that every client has attention from an active producer.

Biannual bi·an·nu·al  
1. Happening twice each year; semiannual.

2. Occurring every two years; biennial.

 client-satisfaction surveys have shown that the changes are useful and have been in the right areas, Draper said. Prudential's clients are primarily people with at least $100,000 to invest.

Prudential pared its agent force by more than doubling productivity standards and beefing up training for the surviving agents and management. The agents still sell mostly Prudential products, but they choose others if pricing is an issue, when Prudential doesn't offer a product or when it is an investment product without an insurance component. Prudential also offers financial advisers through its investment arm, Prudential Securities. The company's agents, however, are more involved in sophisticated planning than are the securities dealers, and most of the fee-based planning offered through Prudential occurs among the agents, Draper said.

Relationships Have Advantages

"Insurers are well situated due to the depth of relationships with clients," said Draper. "That's not to say that bankers and brokers don't need to do a fair share of needs-based analysis, but stockbrokers, oftentimes of·ten·times   also oft·times
Frequently; repeatedly.

Adv. 1. oftentimes - many times at short intervals; "we often met over a cup of coffee"
frequently, oft, often, ofttimes
, have never met their clients face to face. Insurance producers will have closer relationships with clients and a greater understanding of their goals and dreams."

The company also has relationships with independent distributors. In 1987, Prudential Select Brokerage began marketing a portfolio of life insurance products to life brokerage general agents, national general agencies and producer groups. More recently, it is targeting banks and wirehouses. Prudential actively competes with other carriers for the business of these distributors by compensation, service, underwriting, technology, marketing support and quality of products.

A network of wholesalers--regional brokerage directors and regional marketing directors--represents the company throughout the United States. A single relationship manager also is assigned to large national general agencies or producer groups, said Michael Arcaro, a Prudential spokesman.

Philadelphia-based Lincoln National has two distribution work forces. Members of Lincoln Financial Advisors work directly with clients, while Lincoln Financial Distributors is a wholesaling team that works with third-party intermediaries. The latter is growing faster.

"Today, the top advisers that have built a holistic practice are thriving," said Westley Thompson, president and CEO of Lincoln Financial Distributors. "We're seeing that at Lincoln Financial Advisors, too. Our top planners are having a very good year."

Thanks to the financial-planning approach, sales through LFD LFD Laufend (German: current)
LFD Laboratory for Fluorescence Dynamics (University of Illinois at Urbana-Champaign)
LFD Left for Dead (band) 
 beat industry averages in the first half of the year, and most are up on an absolute basis, despite the difficult market environment. Sales of the ChoicePlus Variable Annuity Variable Annuity

An insurance contract in which, at the end of the accumulation stage, the insurance company guarantees a minimum payment. The remaining income payments can vary depending on the performance of the managed portfolio.
 were up 37% over the same period last year, compared with a 1% drop industrywide in·dus·try·wide  
adv. & adj.
Throughout an entire industry: sales that have decreased industrywide; industrywide cooperation. 
, Thompson said. Retail life sales were up 23%, better than overall industry growth that was in the single digits, primarily reflecting universal life sales. Variable universal life sales were down 14%, compared with a 28% drop for the industry as a whole. Sales of Lincoln's mutual funds, Delaware Investments, were up 11%, compared with a 5% decline for the industry. Separately managed accounts sales were up 33%, but Thompson said there are no good industry data.

Lincoln formed LFD in March 2000, just as the bull market was ending. Previously, Lincoln wholesalers tried to win shelf space from third-parry distributors one product at a time, usually with one wholesaler having no idea when another wholesaler had paid a sales visit. Lincoln transformed itself into a single, cohesive cohesive,
n the capability to cohere or stick together to form a mass.
, solutions-based wholesaling company. "We would have been very limited in our ability to gain shelf space" in the emerging bear market with the former business model, Thompson said. The company still has life, annuity and investment wholesalers, but they work as a team, saving the customer time.

High Standards for Wholesalers

LFD carefully measures the performance of its wholesalers and has developed a hiring and screening process to help recruit the best candidates. "It's not just up to each manager," said Thompson. "We institutionalized in·sti·tu·tion·al·ize  
tr.v. in·sti·tu·tion·al·ized, in·sti·tu·tion·al·iz·ing, in·sti·tu·tion·al·iz·es
a. To make into, treat as, or give the character of an institution to.

 a format for getting at behavior and skills to screen out wholesaling prospects. It's created a much higher rejection rate, from five prospects interviewed to hire one, to as many as 15.

LFD had about 250 wholesalers in October, about the same as a year earlier.

Despite their static number, wholesalers are bringing in 20% more year-to-date revenue than over the same time last year, Thompson said. One of the drivers of higher productivity has been formal and better training, he said.

Lincoln's retail broker-dealer, Lincoln Financial Advisors, is made up of career agents from the old Lincoln National, the acquisitions of the retail life insurance business of Cigna Corp. and Aetna Inc., and newer members. They number more than 2,200. They're still statutory Lincoln employees and earn compensation and benefits from the parent company, but they aren't captive agents. "We embarked on becoming a financial-planning firm seven years ago, and we're much further down this path than any career agency system we re aware of," said J. Michael Hemp, president and CEO.

What is different about LFA LFA left frontoanterior (position of the fetus).


leukocyte functional antigen.
 is its "absolute commitment to open architecture" and the "complete conversion of the mind set of LFA management structure and infrastructure toward providing support of the financial-planning process," Hemp said. Under the change, LFA's agencies became "regional planning regional planning: see city planning.  firms" and its managers "regional directors of financial planning," said Hemp. Fee-based planning revenues rose to $20 million in 2001 from $17.3 million in 2000, and Hemp said LFA is "in the business of selling plans selling plan

See rule 105b-1.

While LFD generated more than double the first-year life insurance premiums that LFA generated in 2000, Hemp said owned distribution has advantages over alternative distribution. "You can always exercise more influence in the channel you own," he said. "All distribution will ultimately be owned. Many career agency systems or broker-dealers have been bought. Everyone is trying to buy distribution, so if you already own it, and it's part of the family, it's a great relationship to have." He added that there's little chance companies can now succeed in starting their own distribution from scratch.

"Lincoln has figured out how to do both," Hemp said. "If you can do both, then you'll be a very viable organization long term. Companies that opt to get rid of their career systems lose that leg of the stool stool (stldbomacl) feces.

rice-water stools  the watery diarrhea of cholera.

silver stool

Nationwide Life Insurance Co., the main life subsidiary of Nationwide Financial, has evolved as a financial-planning competitor in a much different way. Nationwide Life had slightly more in assets in 2001 than Lincoln National Life Insurance Co., the main life subsidiary of Lincoln National Corp., but almost twice the net premiums written.

Relying on Partners

Until recently, all of Nationwide Financial's financial-planning business was written by third-party distributors Third-Party Distributor

The name given to institutions that sell or distribute mutual funds to investors for fund management companies without direct relation to the fund itself.
, except for some written by the career agents of its sister property and casualty company, Nationwide Insurance. Nationwide Financial has partnerships with about 50,000 third-party producers, about 16,000 of whom are active writers.

Partners by channel include independent firms Linsco Private Ledger The principal book of accounts of a business enterprise in which all the daily transactions are entered under appropriate headings to reflect the debits and credits of each account. , Royal Alliance, Caderet Grant and Raymond James This article or section is written like an .
Please help [ rewrite this article] from a neutral point of view.
Mark blatant advertising for , using .
; wirehouses UBS UBS Union Bank of Switzerland
UBS United Bible Societies
UBS United Blood Services
UBS United Buying Service
UBS Used Bookstore
UBS University Business Services
UBS Universal Building Society (UK)
UBS Ulaanbaatar Broadcasting System
 Paine Webber Paine Webber and Company was an American stock brokerage firm that was acquired by the Swiss bank UBS AG in 2000. The company was founded in 1880 in Boston, Massachusetts, by William Alfred Paine and Wallace G. Webber. , Morgan Stanley To comply with Wikipedia's , the introduction of this article needs a complete rewrite. , and Waddell and Reed; and banks Citigroup, BankOne, First Union, Wells Fargo Wells Fargo

armored carriers of bullion. [Am. Hist.: Brewer Dictionary, 1147]

See : Protectiveness

Wells Fargo

company that handled express service to western states; often robbed. [Am. Hist.
 and Wachovia (which merged with First Union). The fastest growth in recent years has been with financial institutions (banks) and wirehouses.

Nationwide has recently been setting up partnerships with certified public accountants Certified Public Accountant (CPA)

An accountant who has met certain standards, including experience, age, and licensing, and passed exams in a particular state.
. In October, it completed an acquisition of Provident prov·i·dent  
1. Providing for future needs or events.

2. Frugal; economical.

[Middle English, from Latin pr
 Mutual Life Insurance Co. after it sponsored that company's demutualization Demutualization

The process of changing corporate structure from a mutual fund company to some other form, such as a limited liability or corporation.

This means mutual/life insurance companies convert from policyholder companies to stock companies.
. Through the acquisition, Nationwide has picked up about 770 career agents and 1,100 independent agents, which for the first time gives it a career agency force that specializes in financial planning.

"The Provident Mutual people will help us because career agents have represented about half of all variable life sales today," said Brian Haviland, Nationwide Financial's public relations officer public relations officer nencargado/a de relaciones públicas

public relations officer nresponsable m/f des relations publiques

. "This takes us from No. 6 in variable life sales to No. 4, and close to No. 2. We're able to provide them a broader suite of solutions for their clients. Our intention is to grow the number of agents and the number of solutions those agents can offer."

Haviland said Provident Mutual also brings a "highly affluent" clientele, wealthier than Nationwide's already typically affluent customer, which it defines as having at least $100,000 in investable assets.

Nationwide uses about 180 wholesalers, and it has realigned them, much as did Lincoln Financial Distributors, "so that we don't have different wholesalers calling on the same people with different products," Haviland said.

As part of its wholesaling model, Nationwide has an advanced sales team. It is made up of experts that can help financial planners solve some of their clients' more complex problems, particularly on questions of taxes. While general wholesalers call on producers, they are supported by wholesalers who specialize in life insurance, annuities or other products.

"Financial planning has been the core focus from our very beginning," Haviland said. "We're structured to provide financial advisers with the products and tools to properly advise clients through a range of solutions."
Top 10 Reasons to Plan

Results of a 2002 survey of upper-income households of all ages revealed
the following top 10 reasons people begin financial planning:

                                Percentage of
                                Survey Respondents

Building a retirement fund      83%
Building an "emergency fund"    38%
Managing/reducing current debt  34%
Home purchase/renovation        35%
Vacation/travel                 32%
Building a college fund         32%
Accumulating capital            31%
Providing insurance protection  30%
Sheltering income from taxes    28%
Generating current income       23%

Source: Certified Financial Planner Board of Standards

Note: Table made from bar graph

Who Does the Planning?

The 2002 survey received responses from 996 households of all ages with
income ranging from $60,000+ to $80,000+. The 1999 survey included
responses from 897 households of all ages with income ranging from
$50,000+ to $80,000+.

                            Percentage of
                            Survey Respondents

                            Current  1999

Percentage of Survey

Consult financial planners    37%     32%
Use financial planners        22%     19%
  as primary advisers
Do their own planning         45%     48%

Source: Certified Financial Planner Board of Standards

Note: Table made from bar graph

When to Seek Financial Planning Help

Results of a 2002 survey of upper-income households of all ages pointed
out nine situations that encourage the use of financial-planning

                                             Percentage of
                                           Survey Respondents

Receiving an inheritance/windfall                 72%
Increasing complexity of investments              61%
Portfolio growth                                  52%
401(k) distribution decisions                     52%
Loss of assets from own trading/investing         43%
Market downturns                                  37%
Change in marital status                          30%
Change in job status                              23%
Birth of a child                                  15%

Source: Certified Financial Planner Board of Standards

Note: Table made from bar graph

Where the action is

Many large life insurers have embraced financial planning -- through a
variety of distributors and programs -- to reach the end buyer in
nontraditional ways. Below is a sampling of what companies do.

Company                 Career Agents          Advisers      Banks

John Hancock Financial  System revamped          Yes          Yes
Lincoln Financial       System revamped          Yes          Yes
Manulife Financial      No                 Yes-an affiliate   No
Minnesota Life          System revamped    Yes-an affiliate   Yes
Nationwide Financial    Recently acquired        Yes          Yes
New York Life           Yes                      Yes          Yes
Prudential Financial    System enhanced          Yes          No
Sun Life Financial      No                       Yes          Yes

                                     Professional          Open
Company                 Wholesalers  Services (1)    Architecture (2)

John Hancock Financial      Yes          Yes               Yes
Lincoln Financial           Yes          Yes               Yes
Manulife Financial          Yes          Some      Vies for shelf space
Minnesota Life              Yes          Yes               Yes
Nationwide Financial        Yes          Yes               Yes
New York Life               Yes          Yes               Yes
Prudential Financial        Yes          Yes               Yes
Sun Life Financial          Yes          Yes       Vies for shelf space

                            Fee-Based             Planning
Company                    Accounts (3)         Packages (4)

John Hancock Financial         Yes                   Yes
Lincoln Financial       Through 3rd Party            Yes
Manulife Financial             Yes                   No
Minnesota Life          Through 3rd Party            Yes
Nationwide Financial    Will offer in 2003           Yes
New York Life                  Yes                   Yes
Prudential Financial           Yes          Only for Pru advisers
Sun Life Financial      Through 3rd Party            Yes

(1.) Company can provide attorneys, accountants or other professionals,
directly or indirectly, to facilitate a sale

(2.) Practices that acknowledge a competitive marketplace, such as
allowing one company's agents to sell other companies' products

(3.) Wrap accounts, managed accounts or separately managed accounts

(4.) Company-designed financial planning strategies to solve common


A demographic juggernaut Juggernaut, India: see Puri.


(Jagannath) huge idol of Krishna drawn through streets annually, occasionally rolling over devotees. [Hindu Rel.: EB, V: 499]

See : Destruction
 is pushing through middle age in the United States, pouring unprecedented wealth into the financial system, but making unprecedented demands in return. The challenges of building that wealth--and making it last--point to at least two facts of financial planning at the start of the 21st century: Never has it been more complex, and never has it been more necessary.

How insurers, particularly in the life industry, respond to those challenges will determine their success in enduring the strains and seizing the many opportunities. At the point of sale, insurers are reaching out to customers through trusted advisers, and they have been willing to surrender control of those distribution channels to establish that relationship.

The distributors--agents, financial planners and other professionals--need to know more than ever before. Their training requirements seem endless, but even so, they look to the insurers for further support in making sales that make sense for the customers. Questions about long-term care, estate planning Estate Planning

The overall planning of a person's wealth, including the preparation of a will and the planning of taxes after the individual's death.

Contrary to popular belief, estate planning involves much more than preparing a will, and it is not only for the
, even the fledgling business of life settlements, all can figure into building a client's comprehensive financial plan, because it's no longer just about retiring comfortably. Meanwhile, some customers resolutely res·o·lute  
Firm or determined; unwavering.

[Middle English, dissolved, dissolute, from Latin resol
 go it alone, and for those too, there are services to help them navigate an increasingly bewildering be·wil·der  
tr.v. be·wil·dered, be·wil·der·ing, be·wil·ders
1. To confuse or befuddle, especially with numerous conflicting situations, objects, or statements. See Synonyms at puzzle.

 world of financial choices.

The competitive environment is pushing insurers to develop new products and services and to beef up their capabilities to handle the flood of customers that will only grow as the baby-boom generation matures. Insurers don't have the financial-planning marketplace all themselves; in fact, they risk becoming also-rans if they don't compete vigorously against the banks, brokerages and mutual-fund companies vying vy·ing  
Present participle of vie.

vying vie
 for dominance. No one strategy has emerged as the best way for insurers to prevail. But however they go about it, a common denominator common denominator
1. Mathematics A quantity into which all the denominators of a set of fractions may be divided without a remainder.

2. A commonly shared theme or trait.
 is the quest to win the customer's trust.

Brendan Noonan

The Life Settlement Option

The life settlement industry thinks it holds an important piece of the financial-planning puzzle; its challenge is to build credibility with investors, consumers and regulators.

The industry has evolved out of the viatical vi·at·i·cal  
1. or vi·at·ic Of or relating to traveling, a road, or a way.

2. Of or relating to a contractual arrangement in which a business buys life insurance policies from terminally ill patients for a percentage
 business and into the life settlement business, said Kenneth Klein, president and general counsel for Living Benefits Financial Services. Its role in financial planning involves using insurance funds to provide for long-term care or retirement income, and advocates for the industry say it's an option people will need to know about as they age and their needs change.

"We tend to look at what we do as trying to create an industry around a new product," said Paul Moe, chairman and chief executive officer of Living Benefits. Life insurance is an asset owned by 78% of all U.S. households, he said. People need to know about life settlements because they might be a valid option in later years, he said. Perhaps no more than 10% of the people will take advantage of it, but that's still a large market, he said.

Some experts say the life-settlement industry is poised for growth. Institutional investors Institutional Investor

A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions.
 have committed $1 billion to buy life settlements this year, according to industry players. Within four to five years, they expect to need $2.5 billion annually to buy expected face amounts of $10 billion to $15 billion. Industry experts estimate annual life-settlement sales could hit $20 billion to $50 billion in face amounts within the next 10 years. There have been at least six or seven international institutional sources of capital coming into this business, which confirms that the present-value sale of a life insurance policy is credible, Klein said.

For seniors with children in their 30s, holding a life policy might make less sense than using its liquidity to fund a long-term-care policy, Klein said. It becomes a transformational asset, he said. "We know the capital markets see the potential, and we know the legislative people see it," Klein said.

Until recent years, life insurance policies were bound by a monopsony monopsony

In economic theory, market situation in which there is only one buyer. An example of pure monopsony is a firm that is the only buyer of labour in an isolated town; such a firm would be able to pay lower wages to its employees than it would if other firms were
, in which there was only one buyer for the instrument. If a consumer wished to sell a life insurance policy, the only buyer was the company that originally sold it.

In the late 1980s, viatical settlements viatical settlement

Arrangement by which a terminally ill patient's life-insurance policy is sold to provide funds while the insured (viator) is living. The buyer (funder), usually an investment company, pays the patient a lump sum of 50–80% of the policy's face
 were offered to life policyholders who needed immediate cash, usually to pay for medical care related to a terminal illness. That business was plagued with fraud, but this type of sales of life insurance has shifted to the purchase of policies from consumers who are usually over the age of 65, have a projected life expectancy Life Expectancy

1. The age until which a person is expected to live.

2. The remaining number of years an individual is expected to live, based on IRS issued life expectancy tables.
 of 10 or more years and no longer have the same needs for life insurance they once had.

"If there's about $500 billion of life insurance in force today that is held by seniors, then there's still a lot of room to grow with this market," Moe said. "And as the next wave of baby boomers See generation X.  comes into the 65-plus age market, they have an even higher level of insurance coverage."

The key is education, Moe said. If the capital markets can be educated about this asset class and see portfolios growing, the industry will attract more capital and provide more opportunities for policyowners, be they individuals or corporations, he said.

Regulation Needed

When viaticals started, there was virtually no barrier to entry, and some people thought they could make a quick buck, Moe said. The industry is trying to get appropriate legislation passed on life settlements, as it did for the viatical marketplace, Moe said. There are only 16 states with regulations about life settlements, compared with 36 that have regulations for viaticals, and that's not enough, he said.

Life settlement companies have been "hoping to attract more attention from regulators, because the market that life settlement serves is growing and is in the age range of many of the regulators: senior citizens who are every politician's favorite voting block," Moe said. "Senior citizens and wealthy senior citizens are the market for this product. The average transaction is somewhere north of a $1 million policy size in face amount. Florida has been very active in getting regulations passed and in enforcement of those regulations, because why have the regulations if nobody enforces them?"

The current environment is such that if the insurer doesn't provide fair value to policyholders, they will turn to the secondary markets, presumably pre·sum·a·ble  
That can be presumed or taken for granted; reasonable as a supposition: presumable causes of the disaster.
 life-settlement companies, said Alan H. Buerger, cofounder co·found  
tr.v. co·found·ed, co·found·ing, co·founds
To establish or found in concert with another or others.

 and CEO of Philadelphia-based Coventry First LLC (Logical Link Control) See "LANs" under data link protocol.

LLC - Logical Link Control
, an institutional buyer of viatical or life settlements.

Life-settlement companies add value to life insurance, Buerger said. Any financial planner advising clients over 65 needs to look into what assets might be there, including the possibility of life settlements, he said, It's a "good news-good news" situation with a life-settlement review, he said. If the policy is worth the cash value, the policyholder Policyholder

An individual who owns an insurance policy.
 can plan appropriately and perhaps keep the policy for a while. If the life-settlement value is the higher value, however, the client knows this and can get the additional value, or, if there is sufficient cash flow, might gain more by keeping the policy for a while longer, he said.

John Hillman Hillman was a famous British automobile marque, manufactured by the Rootes Group. It was based in Ryton-on-Dunsmore, near Coventry, England, from 1907 to 1976. Before 1907 the company had built bicycles.

Planning Needs Foster New Products, Services

Even in the individual market, the business of insurance isn't just about insurance anymore. As insurers gear up to meet the financial-planning needs of buyers, they are racing to offer individually tailored investment accounts, higher levels of service, more and better packaged plans, long-term-care insurance and new annuity designs.

Much of today's action is in the fee-based investment Fee-Based Investment

An investment account in which the advisor's compensation is based on a set percentage of the client's assets instead of on commissions. Contrast this to commission-based investment, in which the advisor makes money based on the amount of trades made or the
 accounts, with the new entry, so-called "managed accounts," offering tax-sensitive, individualized in·di·vid·u·al·ize  
tr.v. in·di·vid·u·al·ized, in·di·vid·u·al·iz·ing, in·di·vid·u·al·iz·es
1. To give individuality to.

2. To consider or treat individually; particularize.

 portfolio management for people with as little as $100,000 to invest. Before improvements in software technology, such accounts were open only to people able to invest from $250,000 to $1 million. Major insurers for years have offered a lower-minimum alternative, wrap accounts, or the full-service, high-minimum accounts for the affluent known as separately managed accounts.

Toronto-based Manulife Financial Manulife Financial (NYSE: MFC, TSX: MFC, SEHK: 945, PSE: MFC), also known as The Manufacturers Life Insurance Company, is a major Canadian insurance company and financial services provider.  in September announced its entry into the managed-account business as a way to "get the early-mover advantage and secure some key accounts," said Marc Costantini, senior vice president and general manager of managed accounts for the insurer's Boston-based U.S. subsidiary The Manulife product makes use of the company's wholesalers, independent distributors, service capability through the Internet, investment manager selection and oversight, and back-office support. About 90 of Manulife's 150 regional wholesalers will work with intermediaries on managed accounts, and eight new dedicated experts will help those wholesalers.

"We were absolutely better prepared than many competitors to enter this business, the same as we were to enter the 529 college savings plan business," said Costantini.

Prudential Financial has the most experience among insurers in managed accounts, having offered them for at least five years. The company continues to see them as "a huge opportunity for Prudential and the planners to build a business with recurring re·cur  
intr.v. re·curred, re·cur·ring, re·curs
1. To happen, come up, or show up again or repeatedly.

2. To return to one's attention or memory.

3. To return in thought or discourse.
 revenue that properly compensates them for serving their clients on an ongoing basis," said Jeff Draper, vice president of financial planning. "Managed accounts are extremely attractive mostly due to their tax benefits"--namely, the ability of individual account holders to decide when to take their profits, Draper said. "It's a powerful concept."

Prudential calls its product Managed Account Consulting Services Noun 1. consulting service - service provided by a professional advisor (e.g., a lawyer or doctor or CPA etc.)
service - work done by one person or group that benefits another; "budget separately for goods and services"
 (MACS). It is a member of the Money Management Institute, the trade association for managed accounts. Prudential, UBS Paine Webber, Merrill Lynch Merrill Lynch & Co., Inc. (NYSE: MER TYO: 8675 ), through its subsidiaries and affiliates, provides capital markets services, investment banking and advisory services, wealth management, asset management, insurance, banking and related products and services on a global basis. , Morgan Stanley and Salomon Smith Barney Smith Barney is a division of Citigroup Global Capital Markets Inc., a global, full-service financial firm, that provides brokerage, investment banking and asset management services to corporations, governments and individuals around the world.  controlled 70% of the $417 billion of managed-account assets at, mid-year, according to the institute.

Lincoln National doesn't offer a product per se but rather supplies the products to third-party distributors that do offer a program. "They have built very sophisticated platforms," said Westley Thompson, president and chief executive officer of Lincoln Financial Distributors. "We in turn provide product to them to fit the various asset classes that form their platforms. They look for the best of breed. Then, on the back end, we have the technological capability to support their platforms electronically. Delaware Investments [Lincoln's mutual fund subsidiary] happens to be really strong in that since it has had a strong institutional business."

Other insurers, including John Hancock Financial Services Inc. and Minnesota Life Insurance Co., offer some version of managed accounts through their distributors, and customers of Ernst & Young's personal financial counseling business have been asking for and receiving it. "We're finding that it's necessary," said Elda DiRe, an Ernst & Young partner. "Financial planners are recognizing that it's hard to go in and be the planner and deal with just one component of a plan. The client is pulling for you to take care of everything."

lieutenant colonel
 and Immediate Annuities immediate annuity

An annuity that is purchased with a lump sum and that begins making payments one period after the purchase. Immediate annuities are most commonly purchased by people who have accumulated a sum of money and are ready for retirement.

Insurers have long seen promise for long-term-care insurance and immediate annuities as fast growers in the future. But DiRe said they aren't popular in the high-networth market, and she doubts they will be because such clients believe they can self-insure. Charles Ratner, a principal and national director of personal insurance counseling, said the products are hampered by their complexity and the time and effort producers must devote to learning about them, and by the fact that they generate lower commissions than other products.

But Ratner noted one trend that augurs augurs

Roman officials who interpreted omens. [Rom. Hist.: Parrinder, 34]

See : Prophecy
 well for the products: People lately seem to care less about estate taxes--even if repeal The Annulment or abrogation of a previously existing statute by the enactment of a later law that revokes the former law.

The revocation of the law can either be done through an express repeal
 never takes place. "As long as the surviving spouse gets to keep the assets, then the thinking is that the kids get what they get," he said of the trend.

Some in the industry have maintained that failing to recommend LTC insurance could set up a financial adviser for liability lawsuits in the future, but DiRe and Ratner said the recommendation of an inappropriate product is a bigger problem than a failure to recommend. "Product suitability is important," said Ratner. "People have a kind of fluidity to their lives today that requires a lot of flexibility in the products they're buying. When people are sold insurance products that don't allow them to adapt, a lot of problems occur."

A major writer of LTC insurance, John Hancock is very pleased with its sales, said James Morris, chairman and CEO of the company's broker-dealer, Signator Financial Network. Hancock has introduced several LTC products in the past two years. "We're not giving it away; we're controlling the underwriting," he said. "But the public is willing to pay."

Prudential's Draper predicted LTC insurance would be the product that booms through the financial-planning process. "It's a very emotional product," he said. "The higher the relationship between adviser and client, the likelier the issue of LTC will come up."

As insurers increasingly rely on the financial-planning adviser to sell their products, their support for advisers, will continue to grow. "It's not just the products but what the company offers alongside those products," said Jeff Botti Raphael Jose Botti (born February 23, 1981) simply known as Botti, is a Brazilian professional footballer. He plays as a midfilder for Vissel Kobe.

Botti is a hard-working and talented player who may not get on the scoresheet too often – just 14 times in his five years
, a spokesman for Nationwide Financial. "Does it have the service to help producers bring the solutions clients really need?"

Ron Panko

A Designated Field

In recent years, The Years, The

the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109]

See : Time
 American College American College is the name of:
  • American College Dublin, Dublin, Ireland
  • The American College in Madurai, Tamil Nadu, India
  • The American College of the Immaculate Conception, Leuven (also known as Louvain), Belgium
 has adapted its curriculum to meet changes in demand for professional education, as growing numbers of life insurance agents move from selling to advising roles.

Beginning in the mid-1990s, officials of the college, located in Bryn Mawr Bryn Mawr (brĭn mär), uninc. town (1990 est. pop. 10,000), Montgomery co., SE Pa., a residential suburb of Philadelphia. It is the seat of Bryn Mawr College (for women), opened in 1885 by the Society of Friends. , Pa., recognized that their courses needed to include more financial planning and the application of that planning. In fact, Retirement Planning Retirement financial planning refers to a collection of systems, methods, and processes which, in their aggregate, support a family unit's (client's) desire to achieve a state of financial independence, such that the need to be gainfully employed is optional.  became a key course because so many baby boomers were accumulating wealth. "Everyone was rushing to the planning process," said Samuel H. Weese, president and chief executive officer. "There was this whole concern about having the financial wherewithal where·with·al  
The necessary means, especially financial means: didn't have the wherewithal to survive an economic downturn.


 for living too long and very little concern about the risk of dying too soon, which was the life insurance side of it."

The college began to see an increase in registrations, largely driven by securities firms, Weese said. Companies such as Morgan Stanley and Merrill Lynch, which had been doing very little business with the college four or five years before, now ranked among the college's top five or six companies, he said. "They have moved fairly quickly to the realization that they have to educate their retail brokers, now that they want to call them financial advisers or something similar," Weese said. "It's a vastly different marketplace today, and the demand for professional education is as strong or stronger than it's ever been."

Last year, the college counted 2,400 new designees as ChFCs (Chartered Financial Consultants) and about 2,200 new designees in CLU (language) CLU - (CLUster) An object-oriented programming language developed at MIT by Liskov et al in 1974-1975.

CLU is an object-oriented language of the Pascal family designed to support data abstraction, similar to Alphard.
 (Chartered Life Underwriter underwriter n. a company or person which/who underwrites an insurance policy, issue of corporate securities, business, or project. (See: underwrite)

UNDERWRITER, insurances. One who signs a policy of insurance, by which he becomes an insurer.
). "For us, it's been the best of everything," he said. "Our numbers for last year were up, and this year the momentum has continued."

Two years ago, the college realigned its curriculum so that the first five courses to be completed in advance of the CFP 1. CFP - Constraint Functional Programming.
2. CFP - Communicating Functional Processes.
3. CFP - Call For Papers (for a conference).
 (Certified Financial Planner) exam also bestowed credit toward earning the ChFC and CLU designations. The college also reduced the number of required courses from 10 to eight to obtain a CLU or ChFC. "That strategy seems to be really working," Weese said. "We wanted to be able to show that we had equal tracks for the CLU, ChFC and CFP," he said.

It now takes about two years to complete the five CFP courses and usually another year to obtain the CLU or ChFC designation. "We used to talk about five years and 10 courses, with two courses a year," he said. "That's pretty outmoded out·mod·ed  
1. Not in fashion; unfashionable: outmoded attire; outmoded ideas.

2. No longer usable or practical; obsolete: outmoded machinery.

For example, students who took an estate-planning course five years ago and now want to take the exam for certification might find that half the material they learned is wrong, simply because "the rules may have changed," Weese said. "It's behooved us to realize that we've got to package this education, so students, if they're disciplined, and stick with it, are certainly going to get it in less than five years."

The college has begun offering a series of online courses to expand the study alternatives for students. All five CFP courses were scheduled to be online by mid-October 2002. They integrate video and audio with text so students can use all three in the learning process.

The college's newest specialization A career option pursued by some attorneys that entails the acquisition of detailed knowledge of, and proficiency in, a particular area of law.

As the law in the United States becomes increasingly complex and covers a greater number of subjects, more and more attorneys are
 is Chartered Advisor in Philanthropy philanthropy, the spirit of active goodwill toward others as demonstrated in efforts to promote their welfare. The term is often used interchangeably with charity. , a three-course program on the graduate level. One CAP course already is up and running, and a second will be launched by the end of the year. The third will be available in Spring 2003. The goal is to make the CAP program appeal to fund-raisers as well as financial advisers, now that fund raising for nonprofits has become a fast-growing market, Weese said.

"This opens tip a segment of a whole new constituency for us, because these are the fund-raisers for nonprofits--the relationship-building people who get the charitable gifts--as well as the financial advisers who understand charitable trusts The arrangement by which real or Personal Property given by one person is held by another to be used for the benefit of a class of persons or the general public. , gift annuities and the financial tools appropriate for people with a higher wealth accumulation," he said.

In contrast to the 1990s, the pendulum is swinging back these clays to a much more balanced approach in financial planning--balanced in the sense that the importance of life insurance again is being recognized, Weese said. With the euphoria An interpreted programming language developed in 1993 by Robert Craig at Rapid Deployment Software that is noted for its execution speed, flexibility and simplicity. It can simulate any programming method including object-oriented constructs.  of the stock-market boom over, investors are realizing that a conservative, fixed rate of return is very appealing. There's even a renewed appreciation of whole life insurance with a fixed, guaranteed rate of return. "Nobody wanted that in the mid-1990s-they thought it was outdated," Weese said. "Well, it doesn't look so outdated now."

Barbara Bowers Bowers is a surname, and may refer to
  • Betty Bowers
  • Bryan Bowers
  • Charles Bowers
  • Claude Bowers
  • Dane Bowers
  • David A. Bowers
  • Elizabeth Crocker Bowers
  • Graham Bowers
  • Henry Francis Bowers
  • Henry Robertson Bowers, (1883 - 1912), polar explorer

The Path to Becoming A Financial Planner

The American College offers three main programs for certification in financial services:

* CFP: Certified Financial Planner. This program provides up-to-date education and information on financial planning and professional guidelines guidelines, a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks.
 for adviser/client relationships. Study highlights include securities markets; mutual funds; federal estate taxation; trusts; life insurance; health insurance; and annuities. Students who complete the five courses qualify to sit for the CFP Certification Examination administered by the Certified Financial Planner Board of Standards. Students who earn their CFP can go on to earn CLU or ChFC designations by completing three more courses.

* ChFC: Chartered Financial Consultant. This is the most extensive education available for a professional designation in financial planning, the college says. About 37,1)00 professionals have earned this certification through studies at the college. Its eight-course ChFC program, which includes the five-course CFP curriculum, offers advanced financial-planning knowledge for financial planners and others in this field. Electives include The Financial System in the Economy, Estate Planning Applications and Financial Decision Making at Retirement.

* CLU: Chartered Life Underwriter. This has long been recognized as the highest level of study for life insurance professionals. Since 1927, when the college began offering this program, about 90,000 people have earned their CLU designations there. The eight-course program focuses on the protection, accumulation, preservation and distribution of assets, as well as current estate-planning strategies and planning for business owners and professionals. Depending on their areas of specialization, students also may take classes on income tax, medical insurance, investment planning and retirement planning.

'I'd Rather Do It Myself'

Despite the growing complexity of financial planning, some individuals are choosing to do it for themselves, spurning the need for agents, brokers or advisers.

Do-it-yourself financial planning isn't for the faint of heart, said Bob Bland, chief executive officer of, an online insurance information and access service. Yet, "we believe in the existence of the self-directed insurance buyer," he said. "The industry doesn't believe that customer exists, and that's fine with us. All of our money spent in marketing--approximately $50 million over the past six years--has been directed to those people."

These consumers are the kind of people who would trade stocks at Schwab, might do online banking and habitually HABITUALLY. Customarily, by habit. or frequent use or practice, or so frequently, as to show a design of repeating the same act. 2 N. S. 622: 1 Mart. Lo. R. 149.
 buy online travel, Bland said. The buyers typically are slightly older than 40, married, own two cars, have $75,000 of household income or more, have been renewing insurance for a decade or more and are quite Internet savvy, he said.

"We've sold about 125,000 policies since 1996, and what we've found is that these people don't pick the lowest price, which we think is interesting," Bland said. "They either know what they want or think they know what they want."

Knowing what they want, however, can be a problem. Education is a big barrier to do-it-yourself planners, said Pete Jacques, associate scientist with LIMRA LIMRA Life Insurance and Market Research Association (now LIMRA International, Inc.)  International, an insurance industry research firm. Many people don't have the specialized knowledge or aren't familiar enough with the issues of financial planning, he said. "They generally think of financial planning as just retirement, when there are a number of issues which are relevant," he said. "They think of it as just estate planning or inheritance planning. They also don't understand the value that working with a financial planner brings in terms of understanding products and tax laws."

Lack of understanding can, in some cases, drive the impulse to go it alone. Financial planning is outside the comfort zone of many people, Jacques said. One reason is that consumers don't want to appear ignorant when speaking with a professional about insurance, he said. Rather than calling someone they know and getting a referral, they decide not to do it, he said.

In a recent telephone survey conducted by LIMRA, 76% of consumers said they had a strategy in their head, and for whatever reason just didn't get to it. But with the recent drop in value of 401(k) plans, more people are beginning to realize that maybe they can't do it themselves, he said.

For those who do want to plan their own financial future, however, there are avenues and information. its recent acquisition of consumers with 7,500 articles on a wide range of topics, indexed and searchable, with tools, calculators and "a cornucopia cornucopia (kôr'nykō`pēə), in Greek mythology, magnificent horn that filled itself with whatever meat or drink its owner requested.  of insurance information," all written from the standpoint of the consumer to facilitate an informed decision, Bland said. That site typically generates between 200,000 and 700,000 unique visitors A count of how many different people access a Web site. For example, if a user leaves and comes back to the site five times during the measurement period, that person is counted as one unique visitor, but would count as five "user sessions.  a month. If they prefer, consumers may purchase insurance online through, in many cases without seeing an agent, Bland said.

"In our customer service units, if we find out someone doesn't understand the difference between term life, whole life, universal life and variable life, we stop them and advise them not to buy through and to seek the counsel of a face-to-face agent," he said. "Online buying only works if you know what you want to buy"

"Most data we see says 1% of insurance is bought over the net," Bland said. The reason that number is stuck at 1% is the industry's insistence on "wet" signatures and paper applications, he said. "Once the industry moves to e-signatures--which I believe will be a watershed watershed, elevation or divide separating the catchment area, or drainage basin, of one river system or group of river systems from another system or group of systems. The term is also often used synonymously with drainage basin.  event in our sector sometime within the next 24 months--you've just eliminated the paper application. We believe that when e-signatures become accepted by companies, you will see an explosion of purchases online."

But the increase in online transactions won't be the end of the agent force in insurance sales, Bland said. "I think there is a very bright future for agents who provide consultative service and advice," he said. "I see agents moving. more toward the 'fee-for-service' situation, because insurance is inherently complex, and once you throw estate-tax or liquidity issues in, it becomes even more complex."

Hartford Financial Services Group Inc. has' developed a Web site that is very consumer friendly and designed not to barrage visitors with insurance jargon jargon, pejorative term applied to speech or writing that is considered meaningless, unintelligible, or ugly. In one sense the term is applied to the special language of a profession, which may be unnecessarily complicated, e.g., "medical jargon.  said Mananne Stefanov, the company's marketing communications Marketing communications (or marcom) are messages and related media used to communicate with a market. Those who practice advertising, branding, direct marketing, graphic design, marketing, packaging, promotion, publicity, sponsorship, public relations, sales, sales  manager.

"Our site is designed so that people who do want to do it themselves can go in and get a lot of information about insurance subjects without wading through tot of extra stuff," Stefanov said. "One of the most popular features of the site is what we call the Jargon Translator. It takes' the insurance terms and describes them in legalese legalese - Dense, pedantic verbiage in a language description, product specification, or interface standard; text that seems designed to obfuscate and requires a language lawyer to parse it. , then explains it in language a consumer can understand."

"The big thing is we're trying to help people buying insurance to be more informed in what their needs are, Stefanov said. "That way when they do go into an agent's office, they can talk intelligently about what they need, what they want and can ask intelligent questions and understand the answers."

-- John Hillman
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Title Annotation:insurance market
Comment:A matter of trust. (Financial Planning).(insurance market)
Author:Panko, Ron
Publication:Best's Review
Geographic Code:1USA
Date:Dec 1, 2002
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