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The Good And Bad In Life Insurance 3Q Numbers

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There’s no doubt there was some good news and some bad news in the third-quarter life insurance sales numbers.

How good and how bad depend on the time frame comparison and methodology used. Diving deeper into those things explains why LIMRA and Wink both were correct with last week’s “universal life is up” and “universal life is down” reports, respectively.

First, the numbers:

• Indexed UL new premium climbed 10 percent in the third quarter and 12 percent year-to-date, LIMRA reported. Both figures were year-over-year.
• Non-variable UL was down 11 percent compared to the second quarter and down more than 15.6 percent year-over-year, Wink Inc. reported.

All of these data points are correct, but we need to add some context. Wink tallies “non-variable UL,” which included both indexed and fixed UL. Wink went on to note that its numbers show IUL down 4.6 percent compared with the second quarter, but up 10.5 percent over third-quarter 2017.

A LIMRA spokesman said the organization is sticking with strictly year-over-year comps “because, in our experience, there is a seasonality factor that comes into play. Sales in certain quarters tend to run higher than other quarters.”

IUL premium represented 65 percent of UL premium, and 24 percent of all individual premium for the first three quarters, LIMRA noted.

“Market conditions continue to be favorable for IUL products. IUL premium has increased for the past eight consecutive quarters,” said Ashley Durham, associate research director, LIMRA Insurance Research.

LIMRA also found that fixed UL sales were flat, mainly due to “product discontinuation and rate hikes.”

Fixed UL third-quarter sales were $325 million, down more than 20 percent compared with the second quarter and down 39.1 percent year over year, Wink reported.

Up And Down

Other lines were up and down, LIMRA found:

  • Lifetime Guarantee Universal Life declined for the sixth consecutive quarter, down 10 percent in the third quarter. Year-to-date LTGUL fell 16 percent, compared with the prior year. LTGUL represents 17 percent of UL sales and 6 percent of total life premiums.
  • Variable universal life new annualized premium increased 29 percent for the quarter and 14 percent year-to-date.
  • Whole Life new annualized premium rose 3 percent in the third quarter.
  • Term life insurance new premium grew 1 percent in the third quarter and year-to-date.

Overall, U.S. life insurance new annualized premium increased 3 percent in the third quarter, and 1 percent for the year, LIMRA found.

Wink plans to add additional product lines, such as term life, to its report in the coming quarters.

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at john.hilton@innfeedback.com.

© Entire contents copyright 2018 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.

The post The Good And Bad In Life Insurance 3Q Numbers appeared first on InsuranceNewsNet.



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AM Best Affirms Credit Ratings of Sun Life Financial Inc. and Certain Subsidiaries

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AM Best Affirms Credit Ratings of Sun Life Financial Inc. and Certain Subsidiaries
Sun Life’s leading positions in its core Canada markets – group life and health benefits, group pension and individual insurance – are further …
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Source: Life Insurance News



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CoreLogic takeover of Symbility approved by shareholders Canadian Underwriter

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Canadian claims software vendor Symbility Solutions Inc. is a step closer to being acquired by data provider CoreLogic Inc.

Calgary-based Symbility said Thursday an overwhelming majority of its shareholders have approved a $160-million deal originally announced Oct. 22. The deal still has more hurdles to cross, including approval by the Court of Queen’s Bench of Alberta and the TSX Venture Exchange.

“We view Symbility as the leading innovator when it comes to claims automation, workflow and customer experience,” Steve Brewer, executive for insurance and spatial solutions at Irvine, Calif.-based CoreLogic, told Canadian Underwriter earlier in an interview.

Symbility Property, a claims processing and estimating software product, is used by property and casualty insurers. CoreLogic provides data to both the real estate and property insurance sectors. For example, property and casualty insurers can buy data on property hazard to predict wind and flood losses.

CoreLogic has an existing relationship with Symbility. CoreLogic inherited a third of Symbility in 2014 when CoreLogic bought Marshall & Swift/Boekh LLC.

Marshall & Swift/Boekh bought its stake in Symbility in 2012. Part of that deal was a five-year agreement to refrain from acquiring more shares in Symbility. Then, in 2017, CoreLogic made an offer to acquire Symbility for 60 cents a share in cash. That offer was not immediately accepted, so Symbility officials looked for other potential buyers and also negotiated with CoreLogic for a higher price, Symbility said in a securities filing in 2018.

Ultimately, Symbility’s board accepted an offer by CoreLogic to pay 61.5 cents a share. That offer was put to the vote at the Dec. 13 special meeting of shareholders. More than 99% of shareholders voted in favour.



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How to go direct-to-consumers without ticking off your brokers Canadian Underwriter

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Are you an insurance company looking to build up your direct-to-consumer capabilities without alienating the broker channel, on whom you rely for your core business?

Here are three tips for you, as outlined by bloggers Ned Calder, Shahriar Parvarandeh and Michael Brady, all three from the growth strategy consulting firm Innosight.  Their blog is published in the Harvard Business Review.

The article, entitled ‘Building a Direct-to-Consumer Strategy Without Alienating Your Distributors,’ is written generally for all companies, but some of its ideas may resonate with carriers and their broker partners. For carriers, it may provide insights into how to balance direct-to-consumer and broker distribution sales models. For brokers, it provides a glimpse into how a carrier might attempt to approach their customers without drawing retaliatory measures.

First, “embrace stealth,” the bloggers advise companies wishing to pursue a direct-to-consumer strategy.

Before the advent of the internet, companies looking to test new business models might start selling quietly in a new geographic territory. Here, they were free from the constraints of distribution contracts that restricted their ability to sell direct in traditional geographic markets.

“But that is harder to do in the digital age, as customers and partners anywhere can easily see what you’re doing online,” the bloggers note.  “Alternatively, the company can operate in stealth mode by targeting customer segments that have been poorly served or ignored by traditional distributors.”

The authors give the example of Verizon, which quietly launched a startup called Visible that offers no-contract mobile phone service subscriptions for a $40 flat fee. Only available for purchase through an app, this model competes mainly with smaller-brand, low-end providers, and therefore is not much of a threat to Verizon’s massive distribution network of company-owned, partner, and authorized reseller stores that are selling higher-margin services.

Second, Calder, Parvarandeh and Brady call on companies to “create hooks” that compel their distribution partners while at the same time minimizing their bargaining leverage. “There are many ways to build hooks, including bundling products, monopolizing a category, or developing features that are indispensable to a subset of customers,” the authors write.

An example is when Microsoft launched its Surface line of tablets in 2012. The move put Microsoft in competition with its traditional distribution partners, including Acer, Lenovo, HP and Dell. However, Microsoft had a monopoly on the desktop operating system market, so its partners, which were already hooked on Microsoft Windows, had little choice but to accept Microsoft’s direct-to-consumer strategy.

Third, the authors call on direct-to-consumer strategies to include a way to minimize their distributors’ pain. “Supporting downstream partners’ business can…reduce the risk of retaliation.”

For example, the heavy equipment manufacturer Caterpillar introduced a vehicle management platform that provides customers with insights on vehicle use, health and location.

“The platform is sold directly to customers, frequently removing downstream partners from the sales process,” the bloggers write. “Ultimately, though, the platform benefits partners because it alerts customers when they need to get their equipment serviced by these local partners — a key revenue stream for Caterpillar’s distributors.”



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