Asia, rural Iowa both growth opportunities for insurers

Recent trade missions to China could provide an entree into retirement investment markets there for Iowa-based insurance companies, said Debi Durham, director of the Iowa Economic Development Authority.

“One of China’s concerns is how their aging population is going to be able to afford to retire,” Durham said. Principal Financial Group Inc., for instance, has been seeking approval from the Chinese government to sell annuities in China for several years. Though Chinese officials did not commit to allowing sales of financial services products in their country, “we feel very good that our message was received and understood. As we continue to develop our relationships with China, we’re going to continue to bring that up, and we hope to see some movement with that,” Durham said.

Durham said the enactment of several trade agreements by Congress in 2011, particularly one with South Korea, should prove valuable to Iowa companies seeking to increase their exporting activity. “Those open up great opportunities for us,” she said.

Closer to home, state officials have asked Iowa’s insurance companies to keep rural communities in mind when planning for future expansion in the state. Durham and Gov. Terry Branstad met in the fall with executives from some of the largest insurers in Iowa to discuss how the state and the insurers could work together for a more pro-growth environment.

“There are opportunities for companies to consider divisions they could locate elsewhere in the state,” Durham said, noting that many smaller towns have renovated their central business districts and are equipped with broadband infrastructure. “If we only see growth in the regional commercial centers, then we’re not successful. We need to see growth in all regions of our state.”

Uncertainty tops financial well-being concerns

Economic uncertainty tops the list of employee concerns in 2012, according to the Principal Financial Well-Being Index.

According to the latest national survey conducted by Principal Financial Group Inc. in December, 62 percent of respondents cited economic uncertainty as a major concern, followed by gasoline prices (58 percent), health-care costs (55 percent) and increased taxes (45 percent).

A majority of respondents – 56 percent of employees and 78 percent of retirees – said they did not feel better off financially at the end of 2011 than they did at the beginning of the year. However, more employees are viewing 2012 with optimism than in the previous quarter’s survey. Asked about their outlook for the economy in 2012, 39 percent said they believed the economy would worsen, which was significantly less than the 46 percent with that response the previous quarter.

“What we’re feeling like they’re telling us is that there is still a great deal of caution about the macroeconomic issues,” said Amy Friedrich, vice president of specialty benefits for Principal. “They’re doing what they can about things in their control – such as using credit wisely and curbing spending – and they appear to be gaining momentum in making some of those right decisions.”

For people seeking to gain a better handle on personal finances, Friedrich recommends actions to decrease uncertainty, such as pairing up with a spouse or a friend to pare down debt together. Another way to take control is to connect with financial tools and resources available through their workplace. “The human resource department is a great resource for employees to learn about what’s available through their employer,” she said. “And remember that you have options; run different scenarios to determine what options meet your needs the best.”

Boal: Election, Europe will help shape 2012

The U.S. presidential election and the European economy are two key factors that will shape the investment landscape in 2012, said Greg Boal, president and chief investment officer with Miles Capital Inc., a West Des Moines investment advisory firm.

“Those are the two things we think will have the most impact on our industry and the economy,” said Boal, who prior to joining Miles Capital in September 2010 served as CEO of Aviva Investors North America. “Obviously, Iowa plays a key role in the presidential election, and as that shapes up, it will have an impact on how investors see regulations emerging. It will also give business leaders of companies that we may be investing in a clearer idea of what’s ahead.”

Though less uncertainty would also be desirable in regard to Europe’s financial future, it’s very difficult to know how that will play out in 2012, Boal said.

“It will obviously have an impact on us,” he said. “If improvements there are made as planned, that would give us a look-forward that would be more positive.”