Hitting the Hot Buttons.
Brand identity and the baby boomer market are the target areas for growth within the insurance industry.As insurance and financial-services companies gathered at the second annual Insurance Conference in New York, the hot topics impacting the industry soon became clear.
Establishing brand identity and wooing the baby boomers are the goals of companies that made presentations at the conference sponsored by A.M. Best Co. and Lehman Bros., May 21-22.
For low-profile companies, the strategies include establishing a distinct corporate brand and strengthening it with advertising. For life insurers, the goal is to create life products that can take advantage of the burgeoning market of aging baby boomers in the United States, including the depth of capital available in the affluent market.
Both Aflac Inc. and Ace discussed their branding campaigns. Although Bermuda-based Ace has carved out a name for itself in the industry, it still needs to raise its profile in corporate boardrooms, said Vice Chairman Donald Kramer.
To do that, Ace is launching a new advertising campaign targeted at chief executive officers and chief financial officers, he said. "The issue is, we're not known outside the risk-manager circle," Kramer said.
Aflac, on the other hand, already is reaping the rewards of an ad campaign that Chief Executive Officer Daniel P. Amos said had grown the company's name recognition in the United States from 2% in 1990 to 80% today. Four of 10 people not only recognize the company's name but can identify it as a supplemental insurer, he said. The humorous and well-received ad campaign features a duck quacking the word "Aflac."
UnumProvident's CEO, Harold Chandler, also said his company plans to work on its brand recognition. Lincoln Financial, however, sees opportunity in the mushrooming of retirement savings that will come from the baby-boomer market in the near future. The company is betting that aggressive product development and marketing in its annuity business will capture a good share of that money.
Drayton Nabers Jr., chairman and CEO of Protective Life Corp., said its sales in the area of guaranteed-investment contracts will see an uptick as baby boomers look to more stable investments as they bear retirement.
Lorry J. Stensrud, executive vice president and Hief Financial Officer for annuities, pointed out that the gap between net cash flows and total annuity sales for the industry in the United States has been widening considerably since 1996. That gap--representing surrenders, exchanges and withdrawals--is an opportunity, Stensrud said. "That trend shows that companies in the business are not training and educating their brokers and agents," he said. "Basically, they are just trying to grab each other's business."
The baby-boomer phenomenon isn't just limited to the United States, said Stan Tulin, vice chairman and CFO of Axa Financial Inc., New York. "In the United States, with the aging of the population, the number of people turning 50 is incredible--and that's being matched in France, Germany and the U.K.; he said.
In Europe, 24 million customers have 6 trillion euro (about $5 trillion) of investable assets. That is expected to enlarge to 42 million customers and a total market of 11 trillion euro by 2005, Tulin said.
Add to that the U.S. prospects--11% of all households have more than $75,000 of investable assets--and the Asian potential--1.7 million people with more than $1 million in financial assets in 1999--and the significance of the global market is apparent, Tulin said.
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| Title Annotation: | brand identity, baby boomer market |
|---|---|
| Comment: | Hitting the Hot Buttons.(brand identity, baby boomer market) |
| Author: | Saucer, Caroline |
| Publication: | Best's Review |
| Article Type: | Brief Article |
| Geographic Code: | 1USA |
| Date: | Jul 1, 2001 |
| Words: | 569 |
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