New York Life – Marketing Management Case Analysis

BAB25 Case analysis 2 spic-and-span York Life and ready Annuities Unlike the old geezerhood where a retiree could rest assured that they could see out the rest of their life on their pension off and social security checks, the retirees of today amaze their pensions salaried out in a lump coupling that takes the place of the pension check, but encom school principales the total standard a retiree has to live on until they pass away. This fixs incertitude in the amount a retiree flock spend per month, and if the total amount is ample to last them until they pass away.Immediate annuities help to create certainty in the financial situation of retirees. musical com survey retirees can be certain that they exit receive a social security check to each cardinal month, the amount of income they be able to receive from their pensions can vary depending on their contribution plan. Immediate annuities atomic number 18 a one-time corrupt that guarantees a monthly payment for the remainder of the purchasers life. They solve the difficulty well as they take away the uncertainty of where a retiree can receive their income from, they are the ideal vehicle to guarantee retirees a biography income (Rotemberg & Gourville, 2010, p. ). Generally speaking, neither the buyers (the retirees) nor the administerers (agents/advisors) of spry annuities are really enthusiastic about them. Consumers have several unified reasons for not buying immediate annuities. Firstly heap are ofttimes not familiar with immediate annuities, which evidently causes fewer buyers. Then, buying immediate annuities mean spending a large sum of bills as usually immediate annuities cost at least $100. 000 or more.This large sum of bullion has to be paid at once, spot the purchase is irrevocable which causes doubts, most Copernicanly because the retiree does not grapple if they leave behind live abundant exuberant to make the purchase profitable. If not, more money will be put in the purchase than they will get out of it, meaning it is quite a gamble to buy immediate annuities (Rotemberg & Gourville, 2010). The agents and advisors that are supposititious to sell immediate annuities, on the other hand, in any case have their doubts. Investment advisors actively manage their clients money.Immediate annuities do not allow for this as it is a one-time investment. This also means that the advisor/agent gets a one-time commission, which is less profitable compared to collecting multiple fees from one client over time for revocable investments (Rotemberg & Gourville, 2010). Additionally, advisors/agents often also do not have decorous knowledge of the product, making it very hard to sell. Agents/advisors that do have knowledge of the product often posit that immediate annuities are a bad retirement product.Only 9% of financial advisors (strongly) prefer the product, against 64% having a (very) weak preference for it (Morgan Stanley Research, 2007, as use i n Rotemberg & Gourville, 2010). New York Life (NYL) has set its estimation on educateing the Guaranteed Lifetime Income (GLI) business in the future, but faces several possible paths in sound out to reach this goal. To be as cost-efficient as possible, we think that the company should select its pool of end-customers wisely. The management on retirees should be maintained and even enforced, as many still do not know the products proposed by NYL.Furthermore, the localize should be broadened to a large target group, to include the typical customers of the companies, families with children. As storied by Rotemberg and Gourville (2010), NYL tends to build long confines relations with its clients, as agents follow them over time and sell multiple contracts to them. We can think that an ageing family would break a risk management mindset, as their childrens future is not secured yet. We can hence position the product by presenting it as a preventive solution adapted to ones own conducts.Differentiating the product from those of NYLs competitors is important potential clients of GLI annuities should understand the superior benefits of the product. Building on the companys reputation, GLI annuities should be promoted as a long term investment from a responsible company, concerned with its customers and providing long term relations between agents and customers. In consecrate to reach a greater public and transfigure customers mindsets, we need to strengthen the core components of the company.For this, we believe that the focus should be put on NYLs agents rather than quislingism with investors that would force NYL to compromise on its values and products. era the pool of agents is already significant, only 4000 of them sold GLI annuities, as only 40% of the 11,500 agents had received the training particularised to the product (Rotemberg & Gourville, 2010, p. 12). Therefore we believe that the GLI business would grow if all agents are trained to improve their knowledge of the products and hence their services to customers.We believe that the pool of agents should be increased gradually as number of customers grows in order to sustain the aforementioned values of NYL while the value of GLI annuities should not be changed, considering the customized services NYL provides. Instead, they need to focus on convincing customers that theyre worth their price as their product is unique. i. e. NYL needs to emphasize the clean aspects of its product to differentiate from competitors, while promotion should be built on NYLs values.