New insurance strategy: Simplify

Seeking to wrest market share from the asset management industry, life insurance executives will embark on a campaign of simplified consumer communications and stress real-life contexts for the use of their products. A panel of life insurance executives at the Managing Retirement Income pre-conference in Boston yesterday considered how they would regain consumer confidence in their industry. The event was sponsored by the Institute for International Research in New York. Although guarantees through annuities and insurance attract baby boomers, carriers need to establish trust with consumers to be competitive, said Stephen Deschenes, senior vice president and chief marketing officer of MassMutual Retirement Income, a unit of the Massachusetts Mutual Life Insurance Co. in Springfield. “There’s no mandate for market share, but we have to build that with trust, clarity of communications and product value,” he said. “By no means are the other industries going to lie down — trust has eroded everywhere.” But that trust begins at the individual-adviser level, Mr. Deschenes said. Rather than launch into a rapid-fire discussion of “reducing risk of ruin” and other concepts that may seem foggy to clients, it is easier to think about success in terms of four goals: income, health care, contingency and legacy. Phil Eckman, president and chief executive of Transamerica Retirement Management Inc. of St. Paul, Minn., suggested a shift in sentiment: “Package reality with hope, not fear.” Clients most likely will have to keep working longer than expected and must trim expenses in order to make it to retirement, but by addressing reality in a hopeful context, advisers can provide planning-centered alternative solutions, Mr. Eckman said. “We have to talk about the soft issues, including budgeting,” he said. “Solving the retirement income need requires context: Understand the need, then solve the need.”