Life Insurance Firms Respond to Election Outcome
by Megan RaffertyReprinted with permission from the Corporate Insight Blog. Visit here.
January 10, 2017 — Life insurance firms benefit from educating clients and advisors when international events or political changes affect the markets and their products, and many firms in Corporate Insight’s Life Insurance Monitor coverage group actively sought to reassure clients immediately after the 2016 U.S. presidential election.
The financial industry responded with intense interest, with consumers and professionals alike anxious to understand how a Trump presidency will affect their finances. Americans searched for information online: U.S. Google searches for “market volatility,” “Trump life insurance” and “Trump DOL fiduciary” spiked on the day after the election. Many Americans were unprepared for the prospect of a Trump administration, and the large increase on the search index is indicative of a desire for information.
In the eight weeks following the election, life insurance firms have responded to this interest by publishing resources targeted at both consumers and advisors. By reassuring their audiences and warning against emotional responses to political changes, firms can mitigate the effect of the election on their business.
New resources address how the election may affect investments and sales by discussing market responses to presidential actions, consumer confidence in the U.S. economy and Trump’s possible tax reforms.
Commentary from the field
Firms have published articles, newsletters, guides and videos about the presidential election over the past eight weeks. Four firms in our coverage group published public site resources, while another four provided materials for advisors:
- AXA published an advisor site notice discussing how a Trump administration may change federal estate, gift and income taxes. The document includes charts contrasting current and proposed tax rates and recommends that advisors prepare to be flexible as regulations change.
- Fidelity published a number of post-election articles on the public site Viewpoints page, anticipating volatility in 2017 and recommending that prospects stick to a financial plan. The firm stands out for publishing a Special Report that compiles articles and videos related to the election’s effects.
- John Hancock summarized Trump’s tax proposals in a comprehensive advisor site newsletter that focused on how tax changes may affect estate planning. One resource in the newsletter contextualized new proposals in relation to the long history of estate tax adjustments, and another briefly summarized how transfer and income taxes may change.
- MassMutual anticipated increased market volatility and declining consumer confidence in an advisor site article about the election results, though it reminded advisors that factors beyond the election will also affect markets. An advisor site podcast featured Senior Vice President John Vaccaro discussing the Trump administration’s possible impact on tax reform and the DOL fiduciary rule.
- Nationwide observed gains in industrial and financial markets after the election in an advisor site client conversation guide, which noted bullish investor sentiment. The firm reminded advisors that S&P 500 Index performance has historically been consistent regardless of which political party holds power.
- Northwestern Mutual promoted the benefits of a long-term investment strategy in a public site video, which featured Chief Investment Officer Ron Joelson and CFA Brent Schutte recommending that investors stay calm after the election.
- Principal published a video, three podcasts and a link to educational articles on a comprehensive public site The U.S. Elections Are Over. Each resource recommends that investors stick to a long-term plan despite predicted market volatility.
- TIAA published a number of articles about the election on the public site Market Commentary page, reviewing market responses and anticipating long-term changes. An article published within two days of the election provides a detailed analysis of the markets’ movements and reminds investors to consider factors beyond the presidential campaign.