Opportunities in an economic crisis

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Opportunities in an economic crisis
Phil Marsillo Senior Vice-President Individual
Distribution June 2009
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Welcome

• Building relationships with advisors and in turn,
  
• Advisors building trust with clients
• These two things more important than ever.

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The crisis overview

• Fall 2008 crisis
• Started with U.S. credit debacle
• Banks lending mortgages to consumers who couldnt
  afford payments and defaulted
• Quickly spread world wide
• Unprecedented, coordinated and global stimulus
  plans
• Some glimmers of economic hope have emerged yet
  other indicators have continued to weaken
• Credit markets have eased compared to their late
  2008 extremes, but lending environment remains
  challenged
• Source London Capital Management, March
  commentary

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The crisis overview

• In Canada
• Decima Harris/Investors Group poll (Jan. 2, 2009)
• People pessimistic overall about economy, but
  individually, more optimism than pessimism
• Number of people who think theyll be worse off
  financially remained stable 18 per cent
• Many people said financial situations same as or
  better than last year
• Stimulus measures will take time to filter
  through economy
• Look for signs of economic recovery in second
  half of 2009
• Low interest rates will ultimately induce
  spending and investment
• Source London Capital Management, March
  commentary

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The crisis and the opportunity

• But crisis creates the opportunity!
• Work with advisors help them see beyond headlines
• Reinforce value of long-term planning
• Highlight investment opportunity through planning
• Dont let emotions drive short-term decision
  making
• Many people waiting for markets to go back up
• This can hurt long-term investment growth
  potential
• Key to investment success stay invested
• Segregated funds, e.g., offer guarantees

Source Consumer views on the fall of 2008.
LIMRA. By Jennifer N. Douglas. Published 2008
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The crisis and the opportunity

• Today, clients need advice and re-assurance more
  than ever
• Seize the opportunity advisors will enhance
  their value
• Dont be an ostrich make yourself visible
  communicate

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The crisis and the opportunity

• Industry data shows that historically individual
  insurance industry emerges from economic
  downturns and even recession relatively
  unscathed
• Clients still need insurance to help meet
  long-term needs and goals

Source Consumer views on the fall of 2008, LIMRA
, by Jennifer L. Douglas. Published 2008.
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The crisis and the opportunity
Source Will History Repeat Itself? LIMRA , by
Jennifer L. Douglas. Published 2008.
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The crisis and the opportunity

• Six million households in Canada
• Almost 50 per cent acknowledge, in case of
  primary wage earner death, it would be difficult
  to cover expenses after a few months
• 38 per cent admit they dont have enough life
  insurance

Source Billion Dollar Baby, Sales Potential of
the Underinsured Life Market in Canada, LIMRA
International, by Cheryl D. Retzloff. Published
2007.
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The opportunities

• Life insurance and living benefits insurance
  products to help keep their financial situations
  stable
• Living benefits products, for example
• Show the value for clients, so they dont have to
  use investments in volatile markets, if suddenly
  have critical illness

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The opportunities

• The tax free savings account
• Most significant new savings vehicle introduced
  by federal government in 50 years
• A great time to seize opportunity to help meet
  long-term investment needs

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The opportunities

• Baby boomers
• A golden opportunity
• Make up almost one-third of Canadas population
• Retirement investment planning needs
• Retiring with money from investments or
  inheritance need advice about what to do with
  it
• Retirement money lost in volatile markets
  boomers need advice

Source CBC News, www.cbc.ca, July 17, 2007
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The opportunities

• Thirty-six per cent of consumers havent bought
  more life insurance because no ones asked them
  about it
• Theres an opportunity to meet multiple needs and
  product solutions

Source Every Excuse in the Book Can You
Motivate Consumers to Buy Life Insurance?, LIMRA
International, 2006. Published in Billion Dollar
Baby, Sales Potential of the Underinsured Life
Market in Canada, LIMRA International, by Cheryl
D. Retzloff, 2007.
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Opportunities in an economic crisis

• Summary
• Global financial crisis doesnt have to be all
  bad
• In many ways many opportunities now to help
  advisors grow their business and add value with
  clients
• People still have financial and investment needs
• Provide advice to help clients through the long
  term

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Opportunities in an economic crisis

• Thanks for your time today.