2019 Carrier Forecast
R. Bruce Wallace
January 2019

It’s been nearly a year-and-half that I’ve had the privilege to lead National Western Life as its Senior Vice President and Chief Marketing Officer and I’ve come to one conclusion: Much progress has been made and yet there is much left to do.  That is equally applicable to National Western Life and the industry at large.

2019 will be a year of opportunity for our company and distributors.  National Western Life expects to be up to the challenge of maximizing that opportunity.

But before I share my carrier and industry forecast please allow me to share with you what National Western Life accomplished this past year:

  • Had another record year in life sales spurred by our industry leading SPUL, Lifetime Returns Select.
  • Introduced two market relevant fixed indexed annuities, the Dynamic and Revolution series.
  • Expanded our presence in the financial institution channel in partnership with select distributors.
  • Established a foreign national underwriting program (more on that later).
  • Conducted several direct to agent/advisor events like NWL Now regional meetings, our Elite Producer and Marketer Forum and our Flash Calls online.
  • Agreed in principal to acquire Ozark National Life, a venerable life insurance focused carrier to expand our periodic premium base.

And that leads to the forecast for 2019.  It should be another very good year for sales growth of both annuities and life insurance for NWL and the industry.  It all comes down to demographics.  There are more and more people every day that need our products and services.  Folks are retiring at record pace, creating an immense need for retirement products.  The population at large is woefully under insured for life protection.  We’re in a business where demand for our products and services has never been higher!

But here’s the demographic dilemma for carriers.  While the need for our offerings is growing, the number of agents available to address the needs of consumers is declining!

So the focus of National Western Life will be to expand our “mindshare” and “premium share” among distributors and agents through outreach, relevant products, technology and service.

Outreach
We are committed to getting our message to every agent under contract.  Our Sales Desk is making thousands of outbound calls a month.  The external sales team is not only touching our distributors on a regular schedule but engaging downlines as well.  NWL will be conducting roadshows across the country with special emphasis on California and Texas, two states where we have introduced new products.  We will conduct another Elite Forum event in August in Chicago for leading advisors across the country.

Relevant Products
NWL expects our two new annuity product series, Dynamic and Revolution, to gain traction through 2019.  We are working furiously to “fine tune” those products to offer the best possible accumulation, lifetime income and guarantees that we can.  For the Financial Distribution Channel, expect a product specifically designed for it in 2019.  To provide additional value to consumers, we’re close to introducing a bespoke index with broad appeal for upside potential with downside protection.

Life insurance will not be overlooked.  We are retooling our portfolio to account for the 2017 Commissioners Standard Ordinary (CSO) Table for mortality improvements.  Some products will be left behind but those that remain will be even better.  Along with that we will be introducing a brand new fixed indexed universal life product, the NWL® Assurance Advantage, which promises to be a next generation FIUL with flexibility for protection and alternative retirement income.

Hand in hand with relevant products are additional markets.  One of those markets to which we are fully committed is the foreign national market.  National Western Life has a robust infrastructure for foreign national business due to our expertise in International markets.  While we left the International marketplace in 2018, we will pursue many of those same customers but underwrite them here in the United States.  We will establish a foothold in the middle market, often overlooked by other carriers, with easy-to-meet nexus requirements.  Under the capable leadership of Dr. Carlos Martinez, NWL expects to make an impact here.

Technology
The pace here is dizzying but NWL is keeping its balance.  We continue to upgrade our technology both internally and with the field.  Two improvements that will be welcome—and help spur business—will be a comprehensive illustration system for annuities and an e-app platform from the same provider.  This integration will allow straight-thru processing that promises to be In Good Order.  

NWL also expects to allow for more consumer transactions to be done online and give agents more of the customer management tools they need to manage their business with us.

Service
Technology is essential for the “do-it-yourself” crowd and NWL always wants to provide that option.  But our business still requires person-to-person interaction and to that end we have increased our staffing, especially in the call center, to reduce wait times to seconds to talk to a live person.  Transaction processing has been given priority as well and dispersal of funds is well within industry standards.

NWL will also seek to give a one-of-a-kind agent experience with particular attention to speed-to-issue.   E-app will certainly help here but the human element will be given significant attention too.

While opportunity abounds, challenges come hand-in-hand.  Here are some considerations for industry observers:

Regulation
While many of us breathed a sigh of relief with the demise of the DOL Fiduciary Standard it did not take long for another regulatory threat to emerge—consideration by the National Association of Insurance Commissioners to introduce a Best Interest Standard to the Suitability in Annuity Transactions Model Regulation.  National Western Life believes that Suitability, in its present form, has worked extremely well.  We are also completely in favor of disclosure.  But rewriting regulations that already work will place a burden on agents, distributors and carriers that ultimately becomes detrimental to consumers.  Access to the skills of an insurance professional could be limited as agents leave the business due to the cost of compliance.  No one wants to be counterproductive but the effect of these proposed changes could lead to that.

Pricing for Guarantees
Even for those entrenched in the fixed product realm, the variable annuity market has served as bell cow for our industry.  Actions by some carriers to manage their annuity business with income and death benefit guarantees might serve as a cautionary tale.  The moral is that sound actuarial practices, conservative investment philosophy and reasonable product features will serve you and your customers well.  Those are practices employed by National Western Life to deliver upon the long term promise of our products.

Regardless of where the stock market is when you read this, 2019 could be a record breaking year for those of us in the retirement and life protection business.  National Western Life is bullish on its prospects.  I hope you are with yours.  [RBW]

Author's Bio
R. Bruce Wallace















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