Anyone who thinks there’s nothing new under the sun in retirement insurance should have attended a session Thursday at the 2022 Retirement Industry Conference in Boston, hosted by the Secure Retirement Institute and the Society of Actuaries. Change, if it’s not already here, is coming, the presenters agreed, whether it’s welcome or not.
The session, titled “Harnessing the Power of Change,” looked at a wide variety of innovations impacting the retirement investing industry, from cutting-edge technology updates to even considerations on changing the term ‘retirement’ to ‘lifelong personal care’.
Term of “retirement” considered outdated
“For the generation now approaching retirement, the term doesn’t fit them,” said Allison Salka, senior vice president and director of research at LIMRA. “The notion of a retiree just sitting on the beach is not how he sees himself.”
New ways to work and save will quadruple the country’s retirement savings pool, said Justin Singer, director of the wealth and asset management consultancy Ernst & Young. Along with this will come consumer and investor demand for a better and more familiar experience in dealing with investment advisors, tracking performance and understanding new products.
“Product providers have really been in the driver’s seat of distribution, but now we’re seeing investment advisors playing a bigger role,” Singer said.
Companies adopting AI
And the advisor might not always be human, Singer noted, as more companies are embracing artificial intelligence and virtual reality as ways to give consumers more control when making their choices. investment for retirement and review the options.
But Singer noted a dichotomy in how technological advancements in the industry are viewed by different sectors. Recent surveys, including a live poll conducted during the presentation, showed that a majority of retirement investment executives believe tech companies will disrupt the industry. Fintechs invading the space, however, maintain that they want to be partners rather than true competitors.
“Look at the experience of tech companies when they announced they were getting into healthcare,” Singer said. “Faced with the complexities of compliance and regulation, they backed out.”
Instead, he said, technology companies can offer advanced platforms to facilitate the sales process and experience that current generations have become accustomed to when dealing with businesses. He used companies such as Travelocity and Kayak as examples. These companies do not offer travel or vacation packages, but provide an easy-to-use platform for consumers to book their trips.
Fintech: partner or competitor?
“We see fintech partnering with us for platforms,” said Bryan Hodgens, corporate vice president and director of distribution and retirement research for LIMRA LOMA. “They’re not going to compete on the product but on the platform and the process.”
Hodgens said fintechs can therefore be both partners and disruptors, but not necessarily in a bad way.
Continued technological disruption to the industry is inevitable, but big tech can be seen as an enabler rather than a competitor, Singer noted.
The consumer is really driving much of the change affecting the industry, as investors seek personalized results at speed, cost and scale, he said.
Experience is the new product
“Experience is the new product,” Singer said, referring to a chart displaying takeaways from several E&Y “innovation studio metrics.”
Under “experience” as a new product, E&Y found:
- Holistic counseling providers will prevail
- Platform ecosystems will disrupt and control the customer experience.
- Choice and personalization will lead to better engagement.
In the perhaps hotter and fuzzier categories of impeding change, Singer said companies that embrace diversity, equity and enhanced culture goals, show improved profits,
“Culture and strategic growth are closely linked,” he said. “Diverse and innovative cultures transform businesses.
Silks noted that there are currently five generations of people in the workforce, creating the need for what is often seen as a static industry to evolve.
“Product evolution will have to happen,” she said, and we see ourselves in the crow’s nest of a ship in anticipation of what’s to come in terms of consolidations, partnerships and technology.
Doug Bailey is a freelance journalist and writer who lives outside of Boston. He can be reached at [email protected].
© All content copyright 2022 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reproduced without the express written consent of InsuranceNewsNet.com.