Monitoring Attitudes of the Public 2002 ACLI Webcast December 12, 2002 By Brian Perlman, Ph.D., CLU, ChFC, FLMI Mathew Greenwald & Associates.

Monitoring Attitudesof the Public

2002

ACLI Webcast

December 12, 2002

By Brian Perlman, Ph.D., CLU, ChFC, FLMI

Mathew Greenwald & Associates

2

Methodology

• 1,060 Telephone Interviews

• 440 $75K+ with Oversample

• Conducted in June 2002

3

Issues

• Image of the industry

• Industry comparisons

• Insurance marketplace

• Life insurance product

• Risk classification and privacy

• Retirement and Annuities

4

Image of the Industry

5

0%

10%

20%

30%

40%

50%

1990 1991 1992 1993 1994 1995 1996 1997 1998 2000

Very/Mostly favorableHalf-and-halfVery/Mostly unfavorableNo opinion

Attitudes Toward Life Insurance Industry (MAP 2000)

6

Attitudes Toward the Life Insurance Industry (2000-2002)

15%

48%

23%

9%

20%

42%

17%13%

Very favorable Somewhatfavorable

Somewhatunfavorable

Veryunfavorable

2000 2002

7

64%

74%

81%

83%

64%

70%

77%

77%

2000 2002

Attributes Associated with Life Insurance Industry

% Strongly or somewhat agree

Financially strong

Professional

Meets commitments

Trustworthy

8

Agree Companies Have High Ethical Code

14% 20%34%

19% 11%

43%45%

41%

46%

35%

Lifeinsurancecompanies

2000


2002

Banks Mutual fundcompanies

Stockbrokerage

firms

Strongly agree Somewhat agree

65%

75%

46%

65%

57%57%

9

Agree Representatives are More Interested in Making Commissions Than Selling the Right Products

38% 46%26% 27%

30%30%

36% 27%

Life insurancecompanies

Stockbrokerage firms

Mutual fundcompanies

Banks

Strongly agree Somewhat agree

68%76%

54%62%

10

Industry Comparisons

11

Favorable Opinion of Financial Service Industries

62% 63%

43%

56%60%

74%

% Very or somewhat favorable

Life insurance companies

Banks Mutual fund

companies

Stock brokerage

firms

Financial planning

firms

Financial services in

general

12

Industry Best Described by Various Statements

46%

19%

29%

31%

16%

20%

22%

47%

14%

9%

12%

8%


Stock brokeragefirms


Banks

Offers products that help people

save for retirement

Best for variety of products

Knowledgeable source for

investment advice

13

Industry Best Described by Various Statements (continued)

12%

25%

25%

32%

21%

9%

10%

23%

38%

33%

5%

30%


Stock brokeragefirms


Banks

Protect against financial

uncertainties

Products guarantee

retirement income

Offers products for every stage

of life

14

Mutual Fund Industry Best at Retirement Products by Income

52%56%

51%47%

44%38%37%

<$20,000 $20,000-$29,000

$30,000-$39,000

$40,000-$49,000

$50,000-$74,000

$75,000-$99,000

$100,000+

15

Life Insurance Industry Best at Retirement Products by Income

13% 14% 14%

11%9%

12%12%

<$20,000 $20,000-$29,000

$30,000-$39,000

$40,000-$49,000

$50,000-$74,000

$75,000-$99,000

$100,000+

16

Industry Best at Protecting Against Uncertainty -- General Population Vs. Affluent

38%

25%21%

5%

48%

21% 19%

6%



Stockbrokerage firms

General sampleAffluent sample

17

Type of Financial Company Would Recommend to a Friend – General Population vs. Affluent

39%

30%

13%10%

4%

31%

37%

18%

7% 5%


Stockbrokerage

firms


None


18

Reason Why Would Recommend to a Friend

55%

47%44% 44% 42%

25%

Deal withsomeone

Financialstrength

Advice Timelytransactions

Return Variety ofProducts

% Extremely important% Extremely important

19

Life Insurance Product

20

Adequacy of Household’s Life Insurance Coverage

37% 38%

28% 29%

44%39%

60% 58%

6% 6% 5% 6%

1997 1998 2000 2002

Should have moreCoverage about rightHave more than needed

21

65%

25%

6% 4%

41%

24%20%

15%

Strongly agree Somewhat agree Somewhatdisagree

Strongly disagree

Most people should have some form of life insurance coverage

Life insurance is as much of a necessity as food, clothing and shelter

Agreement With Life Insurance Statements

22

Agreement that Most People Should Have Some Form of Life Insurance

67%

23%

5% 3%

65%

25%

6% 4%

Strongly agree Somewhatagree

Somewhatdisagree

Stronglydisagree

2000 2002

23

Agreement that Life Insurance Is a Necessity

38%

30%

19%

12%

41%

24%20%

15%

Strongly agree Somewhatagree

Somewhatdisagree

Stronglydisagree

2000 2002

24

Financial Professional Most Often Used For Planning Finances

28%

24%

14%

9%7% 7%

11%

Bank rep Financialplanner

Accountant Lawyer Lifeinsurance

rep

Stockbroker None of theabove

25

Retirement

26

Satisfied With Household’s Financial Situation

23%

50%

15%11%

34%

52%

10%4%

Very satisfied Somewhatsatisfied

Somewhatdissatisied

Verydissatisfied


27

Evaluation of Retirement Income

44%

14%7%

32%

68%

12%3%

17%

Enough to livecomfortably

Just enough tocover costs

Not enough tolive on

Don't know whatincome will be


28

Evaluation of Retirement Income

37%

18%

9%

33%

3%

44%

14%

7%

32%

3%

Enough tolive

comfortably

Just enoughto cover costs

Not enoughto live on

Don't knowwhat income

will be

Don'tknow/Ref.

2000 2002

29

Importance of Future Financial Concerns

24%

33%

57%

57%

28%

35%

33%

34%

Extremely important Very important

91%

90%

68%

52%

Being able to afford any medical expenses that come up

Having a guaranteed income throughout your retirement

Being able to afford long-term nursing and home care

should you need it

Being able to provide an inheritance for your family when

you die

30

Difficult to Predict How Much Money Is Needed for Retirement

51% 51%35% 35%

28% 26%

30% 31%

2000 2002 2000 2002

79%

65%

78%66%

General sampleGeneral sample Affluent sampleAffluent sample

Strongly agree with statement

Somewhat agree with statement

31

Tax Deductible Savings From Work Are an Important Source of Retirement Savings

56% 64%

24%23%

General sample Affluent sample

80%87%



32

Estate and Inheritance Planning is Important to Me

44% 46%

31% 34%


75% 80%



33

Would like Employer to Make Available More Information on Retirement Planning

47%

22%

25%

35%


69%60%

SomewhatStrongly a



34

Risk Classification and Privacy

35

Factors that Should be Considered in Determining Policy Cost

13%

13%

25%

26%

46%

49%

53%

69%

18%

16%

26%

23%

42%

49%

52%

68%

Genetic information

Gender

Family history of illness

Cholesterol level

Cancer

Age

Hazardous hobby

Smoking

2000 2002

36

Recall and Understanding of Privacy Statements

No30%

Yes67%

Yes72%

No28%

No19%

Yes78%

Remember receiving Remember receiving a statement from a statement from

Financial Institution Financial Institution regarding privacy regarding privacy

rightsrights

Read one of Read one of these statementsthese statements

Understood the Understood the Company’s Privacy Company’s Privacy

Practices After Practices After ReadingReading

37

Aware That Some Privacy Statements Allow Customers to Prevent Companies From Sharing Their Financial Information

Yes84%

No15%

38

Annuities

39

Importance of Annuity Features

34%

35%

56%

55%

60%

62%

71%

41%

45%

31%

34%

29%

29%

21%

Very important Somewhat important

92%92%

91%91%

89%89%

89%89%

87%87%

80%80%

75%75%

You/Your spouse can get a You/Your spouse can get a guaranteed income for lifeguaranteed income for life

It is a safe purchaseIt is a safe purchase

You want a long-You want a long-term savings planterm savings plan

The earnings are not taxed The earnings are not taxed until the funds are useduntil the funds are used

Provides money if you/ Provides money if you/ spouse need long-term carespouse need long-term care

Can choose to put money in Can choose to put money in fixed accounts and equitiesfixed accounts and equities

Don’t have to begin with-Don’t have to begin with-drawing money at 70 1/2drawing money at 70 1/2

40

Products Best at Various Goals

23%10%

46%

19%

18%

21%

21%

20%

26%

32%

37%

28%

14%

21%

10%

11%

6%

11%

26%

21% Stocks

Annuities

MutualFundsCDs

Guaranteeing a retirement income you can never

outlive

Providing flexibility in managing your

investment options

Having an attractive investment return

Offering tax benefits

Offering safety of principal

Monitoring Attitudes of the Public 2002 ACLI Webcast December 12, 2002 By Brian Perlman, Ph.D., CLU, ChFC, FLMI Mathew Greenwald & Associates.

Documents

industry slide

retirement slide

general slide

affluent slide

important slide

necessity slide

stage of life slide

life insurance product