We speak with thought leader Andrew Morris - a wealth transfer expert who’s dedicated his career to helping clients plan, grow and protect their assets. For over 25 years now, he’s been passionate about helping families with setting up charitable remainder trusts and assisting families with special needs to secure their future through the use of insurance. As a Social Security Analysts, Andrew helps clients maximise and understand their Social Security benefits to optimise their retirement planning.

What trends are you seeing in the current insurance landscape and how do you intend to keep up with these?

The current trend I see in the industry is the tremendous need for an alternative form of guaranteed lifetime income in addition to social security for the aging baby boomer population. Since many major corporations no longer offer a defined benefit type pension plan, many retirees are looking for ways to have a guaranteed lifetime income stream which can only be offered through insurance companies and their living income benefit riders. The recent DOL (Dept. of Labor) legislation regarding the fiduciary rule has made the return of guaranteed lifetime benefit riders popular again, since many companies have now lowered fees and have simplified the benefits to adhere to the new rules.

Another trend that I see in the insurance industry is the need to make sure that older whole life policies are upgraded to make sure that the aging 76 million baby boomer population has adequate life insurance coverage. With the increase in American retirees living longer and the standard life expectancy numbers increasing from age 78 to age 85, life insurance mortality tables had to be updated a few years ago to reflect these longer life expectancy rates. This increase in the mortality tables has left many old policies old and ‘underinsured’. Clients can now enjoy receiving larger coverage increased face values for old permanent life policies for a lower cost or the same amount due to the recent change in mortality tables. The only way I can keep up with the amount of new service for these older policies and aging clients is through the use of technology.

What is the biggest challenge the US insurance sector faces today? What would be your solution?

The biggest challenge the insurance industry faces today is technology and the ability for insurance companies that are considered old and antiquated to keep up by updating their systems for servicing and cybersecurity. As a result, I anticipate that there will be further consolidation within the insurance industry over the next couple of years. With the baby boomer population turning 65 at a daily rate of 10,000 per day, it is an enormous number to keep up with. So, the companies that are not up to speed technology wise will fall by the waste side and will be acquired by larger insurance companies.

The only solution for companies that are currently behind in their technology would be to establish a new strategic alliance or joint venture, where they partner up with a third-party vendor and potentially outsource the work. Very few insurers have all the resources they need to become truly cutting edge. Technological advances are changing business and operating models, which is challenging to an industry that is accustomed to slow evolution.

What do you find businesses commonly fail to consider when it comes to insurance?

Businesses commonly fail to consider the fact that that they are ‘underinsured’ in relation to price. Many businesses will value good price as opposed to the proper amount of insurance for their business. Having a good insurance adviser or consultant can help business owners who are underinsuring themselves to start saving them money. Insurance is one of the most important needs for a small business, yet it is something that many owners skimp on. People don’t reevaluate their insurance needs as their companies grow and numerous small businesses don’t have business interruption insurance in addition to property and casualty coverage, even though it is something that can put their companies and livelihoods at risk. I think that it is vital for company owners to consider and be mindful of the damaging impact that an emergency incident can have if your business is not properly insured.