|
Our Market
The U.S. House of Representatives overwhelmingly approved
a bill in July 1998 that tears down depression-era barriers
between banks, insurers and brokers; the Senate version passed
in May of 1999. On October 22, 1999, the Clinton Administration
and top Republican lawmakers reached agreement on the new
legislation, clearing the final hurdle for it to become law.
It means that within a matter of months the banking, securities
and insurance industries will be allowed to expand into one
another's businesses. It will create an even greater demand
for innovative ways to generate leads and produce presentations
for universal and whole life products.
Universal life insurance policies have rapidly become the
product of choice. The $3.2 billion these policies currently
attract in new annual premiums represents 53% of the overall
market. The policies feature competitive insurance charges,
attractive investment opportunities, maximum flexibility and
significant income tax benefits that have enabled insurance
companies to aggressively pursue new markets with "living"
benefits. The shift in emphasis has found favor with consumers
that are generally more concerned with problems associated
with living too long rather than dying too soon.
There is a huge opportunity in the development of web based
lead generation systems for whole and universal life insurance
products. Current insurance company or brokerage web sites
typically provide only cost estimates for term life insurance.
However, term life makes up only $1 Billion of the $6 Billion/year
insurance business in the US, and is also the least profitable
part of that business. The other $5 Billion is made up of
first year premiums for whole and universal life products.
Commissions paid out by insurance companies to brokers and
agents for whole and universal life products exceed first
year premiums (for the insurance portion only and excluding
investment portion) by about 50% and come to about $7.5 Billion
in 1999. This is the market that Investor Desktop is aiming
for.
|
