Printer Friendly

SHIFTS IN POPULATION WILL AFFECT U.S. INSURANCE INDUSTRY PRODUCTS AND PRACTICES, REPORT SAYS

 SHIFTS IN POPULATION WILL AFFECT U.S. INSURANCE INDUSTRY
 PRODUCTS AND PRACTICES, REPORT SAYS
 ATLANTA, May 28 /PRNewswire/ -- LOMA today issued the following:
 Between now and the year 2000, there will be about 18 million more people in the United States. The population will become more middle- aged and more racially and ethnically diverse. Married couples and families will decline as percentages of total households, and there will be fewer young adults.
 These are some of the shifts in population affecting the life insurance industry in the 1990s. But how? Demographics in the 1990s and the Life Insurance Industry, a new report from LOMA, looks at demographic projections for the next 10 years and analyzes the data from two points of view:
 -- Insurers will be marketing their products to people with
 different needs and priorities.
 -- Insurance companies will be hiring and managing employees from
 an increasingly diverse work force.
 While working on this report, author Jean Crooks Gora looked at demographic projections from the U.S. Department of Labor, the Census Bureau and other sources; determined which trends would have the greatest effect on the insurance industry; and described the probable outcome for life insurance companies. Insurance company executives reviewed chapters and offered suggestions as Gora wrote the 118-page report.
 Demographics and Marketing Strategy
 The first half of the report points to the impact of demographics on marketing strategy. Here are some probable occurrences the book examines:
 -- The population increase and the middle-aging of baby boomers
 should expand insurance company revenue.
 -- Married, dual wage-earner households with large incomes will
 find annuities increasingly attractive.
 -- Individual annuities and group pension/insurance products are
 likely to enjoy revenue growth. Individual life may not fare
 so well.
 -- To gain the assets of high net-worth households, insurance
 companies may have to diversify further into investment
 products.
 -- Because people will live longer, living benefits riders may make
 individual life policies more attractive. However, the much-
 publicized explosion of the mature market will not occur until
 well into the 21st century.
 A key question confronting planners is whether the baby boomers with average incomes will begin saving. Evidence on this issue is mixed because of non-demographic factors such as access to employer-sponsored group life, the rising cost of health insurance, and high debt levels.
 Demographics and Human Resource Strategies
 The second half of the report examines how changing demographics will affect the insurance industry's employment practices. By the year 2000, it's likely that insurance companies will face major discrepancies between their traditional organizational pyramids and the supply of workers available to fill positions within those pyramids. Companies will have to restructure the distribution of work and the incentives used to motivate performance.
 Here are other predictions found in this report:
 -- Companies will have a surplus of middle-aged baby boomers and
 not enough entry-level employees. Automation and re
 -engineering will allow companies to resolve the problem, but
 employers will have to make major investments in training.
 -- The likely decline in the number of young adult workers may
 create a skills gap, since growth of highly skilled jobs is
 likely to outstrip growth of low-skilled jobs.
 Insurance company executives can use Demographics in the 1990s and the Life Insurance Industry to help plan strategies in this decade. It offers insights into the people who will buy -- or not buy -- life insurance products in the future, and the labor pool companies will draw from.
 "To prosper, insurance companies will need both creativity and agility. While unforeseen events may alter these scenarios, this study has identified many of the variables likely to determine future behavior," said Stephen Forbes, Ph.D., FLMI, senior vice president of research at LOMA.
 The demographics analysis is available to LOMA members for $50 and to nonmembers for $250. To order, contact Chris Denman at 404-984-3780.
 LOMA, an association of life-health insurers with more than 800 member companies in the U.S., Canada and around the world, provides education, research, information sharing and resources to help insurance leaders manage and operate their companies effectively.
 -0- 5/28/92
 /CONTACT: Faith Tomei of LOMA, 404-951-1770, ext. 618/ CO: LOMA ST: Georgia IN: INS SU:


BN-EA -- AT008 -- 4865 05/28/92 15:21 EDT
COPYRIGHT 1992 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:May 28, 1992
Words:695
Previous Article:HARRIS BANK FIRST TO SELL LOW-INCOME RENTAL HOUSING MORTGAGE PORTFOLIO IN THE SECONDARY MARKET; NEW EFFORT TO EXPAND AFFORDABLE HOUSING
Next Article:FLOWERS NAMED PRESIDENT OF BANC ONE SECURITIES CORPORATION
Topics:


Related Articles
DEMOGRAPHIC CHANGES PRESENT OPPORTUNITIES, PROBLEMS FOR INSURANCE INDUSTRY, STUDY SAYS
On excluding the AIDS crisis.
Health Care in Transition.
Insurers change direction in shifting Japanese market. (Briefing).
Insurers Must Develop Strategies for Shifting Demographics, Says Industry Analyst.
Nursing--21st century trends.
Can health care be fixed?

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters