Prudential’s Kent Sluyter: Life’s Challenge Is Relevance
September 22, 2014 by Bestwire
OLDWICK, N.J. – Kent Sluyter, chief executive officer for Prudential Individual Life Insurance, said insurers and producers must focus on showing that life products can be relevant to consumer needs at multiple life stages. Sluyter spoke with A.M.BestTV as part of Life Insurance Awareness Month.
View the video version of this interview at: http://www.ambest.com/v.asp?v=sluyter914
Q. What is the biggest opportunity facing the life industry today?
A: With the purchase rate for life insurance at a 50-year low, it raises maybe an obvious opportunity, I might say more of an imperative for the life insurance industry, to really change the conversation we’re having with consumers. Obviously with those kinds of statistics, we’re not doing a very good job right now in terms of reaching consumers. The biggest opportunity I would see is really improving that conversation and improving the result and the outcome. In terms of how we talk about life insurance, the relevance of life insurance, there are a lot of benefits that are associated with life insurance, some of which have been around for a long period of time that we’ve gotten away from, to some extent, in terms of talking about.
Certainly an example of that is, beyond the basic death benefit offered by life insurance, the fact that life insurance can be used in retirement planning to provide for supplemental retirement income, something we don’t talk about as much any more. In terms of the conversation we can have with consumers, talking about some of the benefits and features that are newer with respect to what’s being offered in connection with life insurance benefits that can address particular risk issues that come later in life for individuals such as chronic illness. With seven in 10 individuals age 65 and older, they’re going to experience some sort of chronic illness event in their life. I find that staggering and sobering quite frankly in terms of the significance of that issue. It’s a tremendous opportunity for us to be talking about the role that life insurance can play in helping people address some of their chronic illness expense needs should they arise with chronic illness or terminal illness event. When I talk about changing the conversation, it’s really changing it in a way that makes life insurance more relevant to consumers. It’s more of a solution-driven kind of conversation, focusing on the reason why life insurance is an important part for them to consider in their planning. It’s really turning the conversation into one of talking about living for today and planning for tomorrow.
A: What do you see as the biggest threat?
Q: It’s been pretty well publicized that there’s a decline in the number of dedicated insurance-focused advisers in the marketplace. But what we find is that those individuals pursuing the financial adviser career tend not to be using life insurance in their conversations, in their planning that they’re doing with consumers. Add that to the fact that consumers themselves tend not to raise life insurance in a conversation with a planner if the planner does not raise it themselves. Add those three things together and it really is a threat for the industry with respect to the reach we have and our ability to connect with consumers. Back to that original opportunity, it raises the risk of our ability to really change the conversation with consumers when we’re struggling to reach consumers. I would say that in addition to changing the conversation with consumers, we need to begin by also changing the conversation we’re having with advisers. It starts with that. For a long period of time the conversation that insurance manufacturers have had with advisers has been one around price and product. That may all be well and good in an environment in which advisers are already using life insurance in their practice as a tool in their tool kit for helping clients. But in a situation where they’re not embracing life insurance, talking about price and product doesn’t get you there. It needs to be a solutions conversation we’re having with the advisers themselves helping them understand the role of life insurance, helping them understand how to use life insurance as a solution for their clients.
Q: What is Prudential doing in response?
A: We continue to explore and develop opportunities to grow our distribution and improve the support we’re providing to those distributors that do those advisers that do chose to do business with us. The Hartford acquisition is a prime example of that, where we really brought two very strong sales organizations together, created a combined distribution organization that spans a broad spectrum from brokerage general agencies to institutions like banks and wire houses. We are looking to leverage our point of sale capabilities there to work with the advisersand their clients if that’s appropriate, if that’s something that they want. For a lot of these advisers life insurance is not their primary business. We recognize that the support we provide to them is an important ingredient to them being comfortable using life insurance, recognizing it’s not the easiest product to understand and it’s not the easiest product to go through the acquisition process for. It’s helping them through that process. It’s helping them make it easier to do business with us, make it easier to include life insurance in their planning model. A couple of other things that we’re doing along the same vein is we’re expanding the tools that we offer to advisers to help them grow and expand into diverse markets. We’re also developing a lot of materials to be used with consumers, that advisers can use with consumers to begin to have the conversation about life, to begin to use life insurance more confidently in their planning process. It really is recognizing what we have been doing is not adequate for the future, given the results we are seeing as an industry. It’s really recognizing the shift to focus on value, the value they add, the value the product adds, the enormous potential associated with using life insurance and the power of the life insurance product.