Insurers Must Use Social Media to Reach Gens X & Y

Robert Kerzner, president and CEO of LIMRA, LOMA and LL Global opened the 2011 Retirement Industry Conference in Las Vegas Thursday with a plea to insurance professionals to familiarize themselves with the tools and sales and marketing techniques required to attract younger investors to their firms and products.

At time when so many Americans are worried about their retirement prospects and seeking out new ways to generate income to sustain themselves through their longer retirements, guaranteed living benefit plans and other investment vehicles provided by insurance companies and financial services firms can help offset the sharp decline future generations will see in defined benefit plans.

"Over the past 25 to 30 years, the life insurance industry has increased our assets due in large part to our increased focus on the retirement market," Kerzner said. "But our results pale in comparison to the success the mutual fund companies have had in this market. We have a major opportunity to communicate the unique benefits our industry offers to Generations X and Y, who won’t have defined benefit plans to rely on in retirement, and win more of the market share."

With American workers' retirement confidence at an all-time low and fixed annuity sales on the decline, advisors and agents need to find new ways to evangelize a category of investment products that many people in their 20s and 30s have never heard of before.

"The 401(k) plan has become the modern day debit system, but what’s next? It’s clear the 401(k) alone is not the answer," Kerzner added.

To reach the Gen X and Gen Y crowd, LIMRA and social middleware firm Socialware last month debuted "Insight Advisor Series," a new social media training program designed to help guide advisors through the potential legal and cultural landmines presented by social networking sites and platforms and connect with current and prospective clients.

And getting these folks' attention will be critical for advisors regardless of the products and services they provide.

In December, an FTI Consulting report that found Gen Yers, those born between 1977 and 1995, will eventually become the wealthiest generation in U.S. history. Their combined annual income of $500 billion will explode to more than $3.4 trillion by 2018 and, especially of interest to the high-net-worth and ultra-net-worth shops, this generation stands to inherit more than $30 trillion.

Kerzner added that the industry as a whole has to do a better job of connecting with consumers of all ages and "cut through the noise" to educate them on the importance of developing a lifetime income stream and how the retirement industry and its professionals are more than prepared to meet their needs.

This story has been reprinted with permission from Finanical Planning.