Insurers fight to regain waning confidence

Amid bad news in the financial sector, life insurance executives were urged to fight for clients’ trust in their industry and products at the research organization’s annual meeting in Hollywood, Fla. Oct. 26-28. In addition, LIMRA International Inc. of Windsor, Conn. today unveiled new data reporting the levels of consumer confidence in financials services firms, regulators and ratings agencies. Sixty-six percent of surveyed consumers said that the economic conditions were “very unfavorable.” Twenty-eight percent of the consumers believed that the conditions would improve over the next 12 months. But that shakiness has spread out to the financial services industry: 30% of Americans had no confidence in insurers, while 34% had no confidence in mutual fund companies. Another 47% lacked confidence in stock brokerage or investment firms. Consumers have become even more skeptical of ratings agencies, as 48% of those polled reported having no confidence in those firms. Regulators were among the least trusted, as 51% had no confidence in them. The information came from a survey of approximately1,500 U.S. customers taken earlier this month and was released at the conference. However, amid all that bad news, industry leaders spoke of surviving through these tough times and garnering consumers’ trust. Not only does that require a focus on insurance products as savings and risk management vehicles, but it also entails a fight for consumers’ confidence. “There are two significant lessons from the credit crisis that are relevant to our business: At the base of all the problems was bad underwriting and bad product design,” said Robert Kerzner, president and chief executive of LIMRA, LOMA of Atlanta and Windsor-based LL Global Inc., parent to both LIMRA and LOMA. “We need to better communicate to customers and make them more aware of the protections available to them,” he added. “All policyholders should feel their death benefit is secure: There has never been a time when a death benefit wasn’t honored because of a company’s insolvency.”