ACLI’s Kempthorne: “We must help Americans make insurance a bigger part of their lives”

Life insurers are approaching a new era that requires a "revolution of thought" by its leadership to provide more solutions to more people, according to Dirk Kempthorne, president and CEO of the American Council of Life Insurers (ACLI).

This was the underlying message in Kempthorne's "President's Perspective" address to ACLI members attending the ACLI Annual Conference in New Orleans, Oct. 27-29.

Kempthorne pointed toward the lack of savings plaguing many Americans and underserved markets as primary reasons why the industry needs "to reintroduce ourselves to a generation of Americans who may have never met a life insurance agent or a financial advisor, who have never been encouraged to think about long-term financial planning."

The consequences of failing to meet this challenge, Kempthorne said, would be even more reliance on government entities that are not well-positioned to help.

"The public has little appetite for states providing retirement plans for private sector workers," he said. "But, if they perceive the private sector as void of ideas or solutions, the public will take a government solution. If government is the only guarantor of people's retirement security, government treasuries can be strained to a breaking point. People must know what we can offer, what we can do for them."

Whether they realize it or not, Kempthorne said Americans are desperate to hear from the industry. "This is the generation of 9/11 and the financial crisis," he said. "They have learned that life is unpredictable. They will welcome our guarantees. But please keep this in mind… absent a strong message from us, they will hear a strong message from government about the guarantees it offers. If we fail to connect with our customers, if Americans look to government and not to us, we will have forfeited an enormous opportunity. And the consequences to the Treasury of this government may be onerous."

Kempthorne also asked whether the industry is making effective use of new communication mediums like Facebook and Twitter, and how that impacts connections with younger consumers. "Are we gaining the attention of America in ways America understands? Our customers of tomorrow are communicating in a variety of new ways," Kempthorne said. "We need a new emphasis on communication, simplification and distribution."

He also mentioned that half of the nation's pre-retirees — workers between 50 and 64 — have saved only enough to last them through about 16 months of retirement, and many boomers are ill-equipped for the realities longevity brings. "If age and ailments extend your life beyond your personal means and you are placed in the care of whatever system can care for you, what is your quality of life?" he asked.

Next page: More from Kempthorne; additional news from ACLI conference

Americans, he said, need ideas and guidance from the private sector to help them achieve financial independence. "We can help create a new revolution in thought, where people look to themselves, and to life insurers and others in the private sector, for the tools for their financial and retirement security," Kempthorne said.

"We must help Americans make insurance a bigger part of their lives — be it life insurance, annuities, long-term care, or disability income insurance. The burdens on government, the burdens on family, and the self-respect and dignity of millions of Americans hang in the balance."

More from the ACLI Annual Conference:

ACLI elected John D. Johns, chairman, president and CEO of Protective Life Corporation, to a one-year term as its 2014 chairman. Johns succeeds James T. Morris, chairman and CEO of Pacific Life Insurance Company, who now serves as ACLI immediate past chairman.
ACLI also elected Roger W. Crandall, chairman, president and CEO of Massachusetts Mutual Life Insurance Company (MassMutual), to its chairman-elect position. Crandall will assume the chairmanship during the Annual Conference in 2014, which will be held Oct. 19-21 in Washington, D.C. ACLI's chairman-elect designate post was awarded to Deanna Mulligan, president and CEO of The Guardian Life Insurance Company of America. Mulligan will become ACLI chairman in October 2015.
ACLI lauded the newly formed Congressional Income Protections Caucus in the 113^th Congress that will focus on workplace disability insurance benefits. "ACLI congratulates the organizers of the caucus, Sen. Kay Hagan, (D-NC), Sen. Mark Kirk, (R-IL), Rep. Stephen Fincher, (R-TN), and Rep. Carolyn McCarthy, (D-NY). They recognize the vital role that employer-based benefits such as disability income insurance can play in the financial lives of American families," Kempthorne said. ACLI is pleased the caucus leaders reported on how group disability income benefits reduce reliance on public assistance, Kempthorne said. "Especially relevant to policymakers in Washington, an economic analysis by Charles River Associates showed that employer-sponsored benefits, like disability insurance, save the government up to $4.5 billion per year by reducing pressure on the public safety net," the caucus leaders said.
The 2013 Life Insurers Fact Book is now available for download on the ACLI website. The book shows life insurance industry assets continue to grow, increasing to an all-time high of $5.8 trillion at year-end 2012 from $5.4 trillion in 2011 and $5.1 trillion in 2010.