The Insured Retirement Institute (IRI) hosted its inaugural ACTION18 conference, combining the Government, Legal & Regulatory Conference with the Operations & Technology conference, in Washington DC on May 9-11. The combination of these conferences brought functional experts together to discuss the unprecedented change going on in the retirement industry.
The presentations, breakout sessions, and general conversations created an engaging and active experience for participants. There were several key themes for carriers — and CIOs in particular — to take note of and plan for in the coming months and years. These included:
A changing industry: There is significant recognition that the industry is in a heavy change period.
Emerging product needs: With the countrywide shift in plans from defined benefit to defined contribution, a high need for retirement products is emerging, specifically annuity products including SPIA and DIA products. Americans reaching retirement are left questioning what to do with their 401K.
Ease of business: There is a critical need for carriers to provide ease in doing business with advisors and customers. This includes creating methods of education to help all parties learn about products and know when products are the right solution.
New legislation: Participants discussed how the primary impact of the DOL proposed regulation is over; the industry has awakened to the requirement for transparency, product knowledge, and holistic understanding of customer needs on an ongoing basis. The notion of cost-conscious investing has been introduced and seems to be a strong trend. Advisors will want to be able to choose the appropriate compensation model that best meets clients’ requirements. That might be fee-based where changes may occur in the near term and commission-based when no changes are feasible in the longer term.
Holistic financial planning: Different facets of this concept were discussed, including budgeting and any significant spend decisions, not just investments. This leans a little more toward the use of financial coaches to ensure people are making smart decisions and staying on track 365 days a year, not relying on a once-a-year check-in to see how the plan is working. Holistic financial planning would heavily depend on technology to support tracking, decisions, asset management, and communication.
Information management: Carriers will need to provide a greater role in the management of information if they are going to stay relevant in the customer experience. They should track all communication, education, personal information, and communication (advice or non-advice) over time to ensure proper usage of products and services.
It’s an exciting time in the industry. Carrier CIOs and IT leaders should be reviewing application portfolios and architecture to ensure they will support the changes and maintain relevance to customers, distribution, and internal users. Running business as usual is not an option. IT leaders need IT resources who can traverse insurance-specific product requirements, operational functionality, compliance, regulatory, security, and a significant change in IT industry toolsets. But maybe the most important skill set will be the collaboration and partnership required when working with a wide range of business partners. As evident in the conversations and discussions at IRI, cross-functional skills and experience are needed to meet all the demands carriers are facing today in the retirement/annuity space.
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