Life Insurance Quotes

MacDonald advises insurance companies of commoditizing

10/20/11

Bob MacDonald, the former CEO of insurance company Allianz Life, issued a call-to-action to life insurance industry leaders, warning them that if the industry continues commoditizing its products, it will end up at the bottom of the financial services barrell.

A frequent commenter on the insurance industry, MacDonald posted his position on his blog BobMaconBusiness.com, stating the insurance industry is trading traditional value-oriented systems in exchange for a commoditized, price-sensitive business model.

“If this process continues unabated, then life insurance companies will be reduced to nothing more than an appendage of the overall financial services industry,” MacDonald wrote.

MacDonald believes that insurance companies are frustrated with the slow growth of the industry and afraid of the intrusion by banks and investment firms.

“A commodity is a product for which there is a demand, but one that is sought without qualitative distinction as to either the product provider or the benefits to the consumer," MacDonald continued. “When that happens, price and convenience drive sales—not value of the product. And that is what is happening in the life and annuity industry.”

MacDonald, according to his website, spent 45 years in the financial industry and resigned from his position with Allianz Life in 2006. After retiring from Allianz Life of North America in 2003 as its chairman, MacDonald returned to the company three years later in the role of chief executive of its newly formed Allianz Income Management Services, before resigning from that position in 2007. 

Talk to an Advisor

A licensed insurance advisor can explain your options and help you choose the right life insurance for your needs.

Call: 1-800-823-4852

Chat: Live Advisor Chat

Sm

A few of the carriers we quote