Thursday, March 28, 2024

National Western Life Insurance Company 2021 Carrier Forecast

Embracing Opportunity For Growth

Much like the rest of the world, National Western Life is excited to welcome a new year.

As we look back, it’s clear that 2020, despite its many surprises, provided us an ideal opportunity to draw on our strengths to accomplish the goals we set early on.

As a company, we forged ahead and put in the work to deliver on promises and commitments made in the previous year. Our 60+ years of experience provided us the foundation necessary to respond quickly and proactively to the challenges presented by the global pandemic.

Driving Success
In 2021, we are excited to embrace opportunities for growth and development throughout the company. We are well-positioned to ensure our clients’ needs are met, financially and through superior customer service.

Last year we announced our plan to expand our distribution footprint and explore new market opportunities. We’ve already made significant progress in setting a precedent for success for 2021, implementing a growth strategy that embraces our foundational strengths and enables us to thrive in today’s competitive market.

Expanding Key Distribution Channels
As we enter new distribution channels, our commitment to providing reliable products, high performing indexes, dependable income solutions, and quality partnerships, remains the same.

NWL® kicked off 2020 by introducing The Sterling Group, an exclusive distribution relationship with select National Marketing Organizations (NMOs), for the purpose of strengthening the connection between the manufacturer and the distributor.

We are now expanding upon that strategy by entering into the Financial Institutions distribution channel with the launch of a turnkey relationship between NWL® and a select group of national broker-dealer and bank distribution firms. This group will assist in the management of financial institution relationships, and advise in the strategic direction of future NWL® product offerings for these channels.

This alliance will be given exclusive access to select products, including our newest offering, the NWL® BlueChip, a deferred fixed indexed annuity.

Diversity and inclusion aren’t just buzzwords at NWL®. To address the needs of a growing multicultural market, we’ve further expanded to include a Culturally Diverse Markets (CDM) team that continues to place value on the unique demands and perspectives of our clientele.

We understand that as the world becomes more connected, people from diverse communities near and far also want a dependable way to secure their future. NWL® is firmly committed to being accessible to those communities and responsive to their specific needs. Our knowledgeable, multilingual team has the necessary tools to assist these clients in their preferred language.

Enhancing Company Technology
NWL® has implemented several new systems and technological enhancements allowing for a more efficient and streamlined business process for all involved.

Using ForeSight® illustration technology, our producers have ready access to valuable annuity illustrations with just a few clicks. Additionally, we persist in adding to the growing list of life and annuity products available on the FireLight® platform so producers can submit more applications electronically for faster and easier business.

NWL® remains committed to growing the organization by expanding our product line, diversifying distribution channels, and introducing new services and technology.

As we welcome the new year, NWL® is poised to remain a financially strong, well-capitalized organization with a steadfast focus on protecting the legacies of countless families and we are excited to see what 2021 has in store! [JR]

Mutual Trust Life Insurance Company 2021 Carrier Forecast

Continuing Momentum

A year ago in this space, I wrote an article titled “Relax, Things Are Better Than You Think”. At first glance, it appears that didn’t age very well, coming at the dawn of a year that has challenged us more than any in recent memory. The phrase “famous last words” comes to mind. However, with the benefit of hindsight, a closer look tells a story that isn’t quite so discouraging. While 2020 has not been the year that any of us planned or hoped for, it has revealed the character and the significance of the industry in which we all work. Despite the myriad headwinds that we faced, we still kept our promises to those families that lost loved ones. We still provided funds to those that lost their jobs or saw their hours at work cut back. We founds ways to make it easier for prospective clients to purchase our products and get the protection that they need. I’ve never been prouder to be a part of our industry because this is what we do, no matter the challenge.

For Mutual Trust, the key to meeting that challenge as we look forward is a concept that we call Continuing Momentum. We chose it because the concepts of momentum and motion are almost universally recognized and also because it is an excellent metaphor for what we have done the last few years and what we will do going forward to make life easier for you and for your clients.

In physics, momentum is the quantity of motion of a moving object, its mass times velocity. What I want you to do is to think of that object as your business and remember that momentum can either be positive or negative. For a visual, think of a Newton’s Cradle, that device that you may have seen on someone’s desk with a number of spheres tied to strings that swing back and forth. Newton’s Cradle is the best physical representation of the conservation of momentum, which says that the total momentum of two objects before a collision equals the total momentum of the two objects after the collision. If you pull back one sphere and let it go, one sphere will shoot off the other side. If you pull two spheres back and let go, two spheres will shoot off the other side, and so on. For our purposes here, think of the cradle as your business and the spheres as the various components of your business.

The first sphere is prospecting and relationship building. This is what starts the process. The second sphere is product and the third sphere is new business and underwriting. This is the point where outside influences can start to have an effect because now your carrier partners have entered the picture. The next sphere is commissions. This is your top line revenue and your source of capital to invest in your business. The last two spheres are functions that are not thought of as often, but are equally important because they can have a dramatic influence on the direction and momentum of your business. Each of these components (spheres) relies upon the force and influence of the others. The positive momentum of excellent prospecting and sales skills can be tempered by poor new business and underwriting service. On the other hand, superb policyowner service by the agent and the carrier can generate positive momentum for prospecting. What all of them has in common is that none of these works without the initial action of you, the agent. As our Chairman often says, nothing happens at an insurance company until an agent submits an application.

So, what does Continuing Momentum mean to Mutual Trust? For us, it means continuous improvement. In a year that challenged the basics of our business, working to get a little bit better every day went a long way. We introduced our Tele-Med Underwriting program and remote application process in April. We rolled out The Time Is Now incentive to provide a revenue boost in lieu of our Summit Conference in the second half of the year. We increased the Tele-Med Underwriting limits to $500,000 in July and to $1,000,000 in December. We introduced our Agent Resource Center in October, putting all of our marketing materials, webinars and videos in one place—a one stop shop for everything that you need to market and sell Mutual Trust products.

As we move into 2021, we are Continuing Momentum with additions and improvements to our portfolio of riders. We will introduce our fully automated, end-to-end e-app process, easy-@pp, this spring and we will continue to look for ways to get better, every day. Because Continuing Momentum is not a destination, it’s an on-going journey. It’s about making it easier to do business, to minimize friction and keep your business in motion. It’s about help and support to maximize the positive momentum of your business. It’s about consistency, so that you can be confident that the expectations that you have and the expectations that you have set for your clients will be met.

Thank you to all of our valued distributors for your incredible efforts in an unprecedented year. We met challenges we could not imagine that we would face and made it through. Now, it’s time to look ahead. Throughout 2021, look for Newton’s Cradle and the Continuing Momentum banner to see what Mutual Trust is doing to get better and to make life easier for you and for your clients. [LC]

Mutual of Omaha 2021 Carrier Forecast

Excellence In The Face Of Adversity

What a year we just experienced! The COVID-19 global pandemic has affected nearly every aspect of daily life. It has changed how people interact and how businesses operate. Consumers, brokers and insurance carriers are relying on technology to communicate and conduct business, making digital services more important than ever.

Beyond the pandemic, we’ve seen uncertainty in many aspects of our society in 2020, including a heightened focus on racial and economic inequalities. While Mutual of Omaha has a long-standing commitment to diversity and inclusion, we announced an initial set of additional actions to promote positive, meaningful change when it comes to social justice, both within our company and in our communities.

One step we took was retiring the Native American imagery associated with our corporate logo. In November, we unveiled our new corporate logo—a lion. This symbol of protection and strength represents who we are as a company and reflects our mission, values and loyalty to you and our customers.

Thriving in a Complex Environment
The health and safety of our associates, our customers, our business partners and our communities has been our highest priority and continues to guide our pandemic response, which we anticipate will continue for the foreseeable future.

Mutual of Omaha has responded to the uncertainties posed by the pandemic with great resiliency. We are committed to being a carrier of choice in a competitive landscape and continuing to operate with excellence. We remain financially strong and stable, able to withstand today’s challenges to fulfill the long-term promises we make.

We understand today’s business environment is moving rapidly and it’s critical for brokers to respond to their customers’ needs efficiently and effectively.

In order to support you in that endeavor, Mutual of Omaha implemented some notable enhancements in 2020:

  • We launched Mutual Income SolutionsSM, a new disability income insurance solution. This product features expanded occupation classes, extended benefit periods and an increased maximum monthly benefit of $20,000. It also includes an electronic-only experience for sales professionals and customers.
  • We monitored the AG49-A changes that could have affected our indexed universal life (IUL) products. The new regulation ultimately supported our long-standing commitment to developing simple, client-friendly IUL solutions. Our products did not require any changes as a result of AG49-A, and we’re proud to continue offering the same low-cost IUL products that can help your clients achieve their financial goals.
  • We introduced Mutual of Omaha Premier, a new competitive prescription drug plan that offers a low monthly premium option for customers age 65 and over.
  • We added our simplified issue IUL Express product to the iPipeline e-App, which includes a point-of-sale underwriting decision.
  • We helped our customers save money by improving Medicare supplement rate competitiveness in several states.
  • To enable convenient cross-selling for brokers, we added the Cancer and Heart Attack/Stroke products to the Med supp e-application.

Looking Ahead to 2021
In 2021, we will build on our strong, stable and secure foundation and continue to deliver value in many ways:

  • We will focus on enhancing and streamlining our application submission and underwriting processes to provide an exceptional broker experience.
  • We will continue to offer competitively priced Med supp plans and related offerings that add value to our senior health portfolio.
  • We will continue to grow our market share in the simplified issue and indexed universal life product space.
  • We will expand and improve our digital capabilities to provide convenient options for our sales partners and customers.

We look forward to working together to continue meeting the evolving needs of customers, especially during these unprecedented times. You’re an important part of our mutual success, and we appreciate the confidence you place in us. [TG] [RM]

American National Insurance Company 2021 Carrier Forecast

“…Changes Aren’t Permanent, But Change Is.”
RUSH, Tom Sawyer

To say that 2020 was a year of surprises is a vast understatement. Yet, the challenges presented in the past year served to accelerate underlying changes that were already at work aimed at improving the customer and producer experience. At American National we are committed to keeping the same sense of urgency as we march forward in 2021 and beyond.

For decades, the life insurance purchase and underwriting process seemed to be essentially stable and unchanged. Paper applications, traditional age/amount underwriting requirements, for-cause attending physician statement requests were the norm. However, in the past few years it has become clear that the only norm is change itself. With the advent of accelerated underwriting, it became possible for individuals to obtain coverage without traditional exams and labs. E-applications made the submission process more effective and automation has enhanced the process even further with system-generated underwriting decisions on clean cases.

American National entered the accelerated underwriting process quite early. In 2011 we launched our Underwriting Xpress program which made a non-medically examined process possible for modest amounts of coverage. In 2017, we launched Xpress Plus, an expansion of our accelerated underwriting program making the purchase of coverage up to $1 million possible without a traditional medical exam. These programs, combined with our e-application system (Expert App) and our internal underwriting engine (Smart Underwriting), have vastly improved the life insurance purchasing process often resulting in same-day approval of cases up to $1 million in face amount.

Prior to the COVID-19 pandemic, American National was at work with various pilots to find acceptable alternative underwriting data to enhance our acceleration and automation process. With paramedical exams becoming difficult to obtain, the pandemic spurred the need to put these new sources of data to work in production. At the same time, COVID-19 presented us with a new mortality challenge. How would it be possible to both enhance our accelerated underwriting process to keep the business running smoothly and mitigate the risks presented by the virus? We approached this problem in two ways: For those who were younger and lower risk, we began utilizing alternative sources of data (medical claims data, electronic health records, clinical lab results, for example) which resulted in an increase in our acceleration rate for ages up to 50. At the same time, we limited our exposure to those at higher risk, especially those at older ages. The net result was an overall reduction in time to approve/issue life insurance coverage.

Serving as a complement to our Xpress and Xpress Plus acceleration programs is our automated underwriting process, Smart Underwriting. Underwriting automation has been at the forefront of our focus for the past few years. Our team of dedicated professionals developed a system that not only underwrites clean cases, but also processes substandard business up to Table Six. Most of the decisions made by our Smart Underwriting engine are made within 30 minutes of submission on all products with face amounts up to $1 million. In 2021 our focus will be on increasing the number of cases handled by this system and on enhancing our approval notification process.

The use of alternative medical data can also reduce dependence on the traditional Attending Physician Statement (APS). The APS is often the main culprit of delays in the underwriting process and retrieval of the information is frequently out of the control of the carrier or agency. In 2021 we will be utilizing data such as Electronic Health Records (EHR), medical claims data, and clinical lab information in lieu of the traditional APS when possible. While meaningful hit rates are currently low, they are on the rise and there are many opportunities to obtain sufficient information in real time (or near real time) that will allow us to forgo the traditional APS.

The urgent response to the COVID-19 pandemic has enhanced our understanding of alternative data and its potential uses. In 2021, we will continue to utilize these newer data sources and further imbed them within our processes. At the same time, we will continue to pilot other alternative tools as we seek ways to improve the process. The challenge in finding alternatives to traditional underwriting requirements is that no other data product provides consistently the same set of valuable measurements as the paramedical exam and insurance labs. With alternative electronic information, each person will have different sets of data making it somewhat akin to Forrest Gump’s box of chocolates. You never know what you will find. Some will have comprehensive information and others may be scant or non-existent and others somewhere in between. Because of this, the traditional exam and labs are not going away. These requirements will continue to be a necessary part of the underwriting process to keep products priced competitively, especially with certain risks and at larger face amounts. American National works closely with our exam vendors to make sure that the paramedical process is done safely and professionally. Also, as a value-added, our clients can also receive a text message when their lab results have been completed. The results can the be reviewed electronically by the client. We believe this is an excellent way to partner with our clients in the best interest of their health. Understanding lab results may help guide important lifestyle changes and enhance long-term well being.

While the focus of most discussion involving underwriting revolves around automation, acceleration, predictive analytics, etc., the art of underwriting and the importance of critical thinking will always be key. Our Precision Underwriting credit program illustrates our focus on underwriting the whole person with the understanding that not all risks can be constrained to “by the book” underwriting rules. Our credit program applies to individuals medically underwritten between ages of 18-60 and face amounts up to $5 million. All products are included in this program. The purpose of Precision Underwriting is to find those individuals who separate themselves from others by displaying various positive characteristics enabling us to make intelligently aggressive underwriting offers to these applicants.

In addition to enhancing our automation program, using alternative sources for traditional APS’s, and emphasizing our Precision Credit Underwriting program, several other changes are occurring in 2021 to make our underwriting more competitive. These changes include:

  • Liberalized Aviation Guidelines
  • Expanded Foreign Resident Guidelines
  • More Competitive Financial Underwriting Guidelines

At American National we pride ourselves on our culture that promotes agility, collaboration, and engagement. The challenges of 2020 put on display each of those cultural characteristics. As we march through 2021 and beyond, we look forward to meeting the challenges ahead and providing our distribution partners and independent agents with first class service and competitive underwriting solutions. [SM]

American National Insurance Company 2020 Carrier Forecast

Nothing Is More Expensive Than A Missed Opportunity

Was 2019 a flat or down year for you? Not for American National Life Insurance Company which had another stellar year of life insurance production growth. Although complete details are not released yet, I can say we are happy with our continued year over year growth while the industry remains relatively flat. Why are we consistently growing our life business? A lot of credit must be given to an opportunity we seized upon in 2011. This opportunity is the focus of a vast number of agents and agencies as a catalyst to grow their business year over year too. What is that opportunity? First ask yourself the following questions with regards to your production in 2019:

  • Are you increasing your life sales with existing personal clients?
  • Are you increasing your life sales with existing business clients?
  • Are you increasing your life sales with new personal clients?
  • Are you increasing your life sales with new business clients?

If you answered “no” to any question above, don’t continue to miss out on this huge opportunity in 2020. What is the opportunity you are missing? It is as simple as adding living benefits as a core product in 2020. Living benefits offer your clients access to the death benefit while they are still living, assuming an event or trigger has occurred which has dramatically shortened the insured’s life expectancy. Products offering living benefits should include the full suite of chronic illness, critical illness and terminal illness. All three are part of a complete package of protection for your client.

Offering living benefits will increase both personal and business sales enabling you to help your clients be better prepared for the unexpected while living. Here are some examples of how you can make 2020 your year of increased life sales by offering living benefits as a core product.

Existing Personal Clients—Review your book of personal clients. Do any of your clients have the “outdated” type of life insurance or the “updated” type of life insurance? Outdated life insurance does not contain living benefits. Updated life insurance contains all three living benefits. When was the last time you offered your clients a no cost life insurance checkup to make sure they have updated life insurance? Try it. Your clients will respond positively, and your life sales will grow by doing what is right for your clients.

Existing Business Clients—Review your book of business clients. How many have buy/sell coverage in place which is outdated….not containing living benefits? Why should you be concerned with buy/sell coverage where no living benefits are included? Think of it this way. What happens if one of the owners in an outdated buy/sell agreement survives a severe heart attack but can’t return to work due to complications from the heart attack? The business, which the buy/sell was supposed to protect, must continue to operate as normal without one of the business owners. The business will probably lose customers, income or may have to close altogether without two healthy owners. The healthy owner(s) must somehow pick up all the responsibilities no longer covered by the health impaired owner, while continuing to pay the health impaired owner a regular salary. Remember the current outdated buy/sell agreement is triggered at the death of a business owner, not when a business owner has a life shortening illness and cannot return to work. If the health impaired owner’s life expectancy has been dramatically shortened, this is where living benefits may be able to pay a benefit to help the business continue during the health impaired owner’s absence.

New Personal Clients—If you are struggling to develop new clients, begin offering life insurance checkups as part of your practice. Many existing policies do not offer living benefits and therefore leave policyholders exposed to devastating health events. An example may include an insured who was required to have a life insurance policy as collateral for a loan thereby paying off the loan if the insured passes away. But what happens if the insured suffers a life shortening health catastrophe and cannot work? The loan still needs to be paid, yet the insured may not have the income to continue paying the loan. This is where living benefits may be able to assist the insured with much needed cash flow enabling the insured to continue to meet loan obligations.

New Business Clients—Consider offering a no-cost business insurance checkup to potential business clients. Again, does the business owner have the outdated or updated life insurance? Just like the previous buy/sell example, all business insurance should include living benefits. For example, let’s look at key person coverage where there is an existing key person policy for $1,000,000 on a 55-year-old. The key person is the head of operations managing all personnel, plant and equipment allowing the owner to develop marketing plans and focus on sales. This is a very successful team allowing each individual to focus on their strengths while minimizing their weaknesses. When the key person experiences a life-threatening stroke and cannot return to work, the owner now must fulfill the role of operations manager too but cannot afford to allow marketing and sales to suffer. The existence of a simple life insurance policy without living benefits cannot help the owner’s cash flow to assist in hiring the key person’s replacement to continue the business. Nor does the current policy offset lost sales while the owner now is managing both operations and sales. Life insurance with living benefits is the answer.

If you have been missing the opportunity of offering living benefits to existing customers and new customers alike, stop. As I. M. Pei, the great Chinese-American Architect once said, “Stop worrying about missed opportunities and start looking for new ones.” Offering the complete suite of living benefits is your new opportunity. Educating your existing clients about living benefits and offering living benefits to potential clients is your new opportunity for 2020. Don’t offer any life insurance to anyone without first exploring all the benefits of living benefits.

As you can see there is a huge opportunity for you to grow your business by adding living benefits as a core product in all your sales opportunities, personal and business alike. When you decide to move forward with offering living benefits, make sure of the following:

  • All products offered by the carrier should include living benefits. Many carriers offer no living benefits or only offer living benefits on a few products. American National offers all living benefits on all products including term, guaranteed universal life, indexed universal life, universal life and whole life.
  • If purchasing term, make sure the product(s) available for conversion includes living benefits. Some conversion products do not include living benefits or have limited living benefits available.
  • Living benefits should include chronic illness which offers a benefit when an insured cannot perform two of six Activities of Daily Living (ADLs) or experiences a severe cognitive impairment. Be careful where there is a healthcare professional attestation requirement confirming the chronic illness is permanent. Healthcare professionals are very hesitant in providing this attestation.
  • Living benefits should include critical illness which has as many as 16 triggers as with American National’s products. Some companies have branded other names to the same triggers included in the critical illness living benefit offered by American National. The quantity of triggers may vary by state.
  • Living benefits should include terminal illness which offers benefits when the insured’s life expectancy is less than 12 or 24 months depending on the state where the policy is sold.
  • Lastly, check the limits of coverage and waiting periods with all three living benefits. Many carriers promote living benefits while at the same time dramatically limiting the amount available for a claim or require long waiting periods before a living benefit is available.

Although the discussion above centered around reviewing existing policies to update them to include living benefits, replacement of business may not be suitable for every client even if the existing coverage does not contain living benefits. Every client is different thereby every situation needs to be suitable for the individual client.

To all of you, agent and agency alike, who are growing your business with American National Insurance Company, we want to say, “Thank You!” for another great year in 2019. For those of you who have not had the American National experience, we ask that you give us a chance to earn your business in 2020 so we can help you grow your production using living benefits as we have done for so many in the past.

All the best for you in 2020! [CK]

Amalgamated Life Insurance Company 2020 Carrier Forecast

Navigating The Industry’s Changing Landscape Demands Foresight And Flexibility

As a legacy industry, the insurance industry has long been associated with providing financial protection and effective risk management. For individuals, the industry delivers financial security and peace of mind for themselves and their families. By insuring companies and Taft-Hartley funds through providing solutions like medical stop loss coverage which protects them in the event of employees’ catastrophic medical conditions, the industry helps drive their growth and enables them to take calculated risks. Legacy industries, however, are not known for bold moves. Unlike, for example, the tech sector marked by rapid change, the insurance industry has been slower to adapt to new business models, technologies and market dynamics. For our industry, the primary drivers of change have been the various challenges we face. To succeed, it’s been necessary for insurance companies and brokerages to adapt and deploy better strategies that enable them to address today’s challenges and benefit from more opportunistic practices.

Regulatory Challenges
For years now, the insurance industry has grappled with increasing legislation on the state and federal levels. Just as the Department of Labor’s fiduciary rule sent a warning to investment advisors and other fiduciaries that they must put the best interests of the investor ahead of their own, the SEC issued a Regulation Best Interest and the New York Department of Financial Services (NYDFS) issued its Insurance Regulation 187–a best interest standard for annuities and life insurance product recommendations. The standard became effective for annuities on August 1, 2019, and will be effective for life insurance products on February 1, 2020.

Regulations relating to protecting customers’ personal data also have intensified. Following in the footsteps of the European Union’s EU General Data Protection Regulation (GDPR), we saw two of the nation’s more progressive states, California and New York, issue new data protection legislation; the California Consumer Privacy Act (CCPA) and the NYDFS’ Cybersecurity Regulation. As large collectors of sensitive data, insurance companies will have to take new measures to assure their compliance with these other state regulations likely to follow.

On a related note, we see the value in having a cyber security solution to offer consumers. At Amalgamated Life, we entered an agreement with CyberScout® in early 2018 to market its LifeStages® identity management services and its FraudScout® credit monitoring and risk minimization services. Not only do these products provide vital consumer protection in the event of a data breach, but also let the market know that we take cyber security very seriously.

Economic Impacts
In addition to these and existing regulations affecting the industry, there’s The Tax Cuts and Jobs Act, which has been affecting insurers’ operations. Specifically, the broad tax rate cut from 35 percent to 21 percent had the effect of reducing cash tax rates over time, as well as reducing deferred taxes recorded on company balance sheets which placed stress on risk-based capital. Economic conditions including the flattening yield curve between short- and long-term interest rates, which historically has predicted a recession, coupled with market volatility and political unrest, have also challenged the industry.

Workforce Development
Another area where the insurance industry is experiencing some difficulty is in workforce development. With the graying of America and many experienced insurance professionals retiring, attracting the younger generation to an industry not associated with youth or high technology so integral to the lives of Generations X, Y and Z is a challenge. Similarly, attracting these younger generations as customers will demand that insurance companies make the necessary investments in technology to distribute product information online and via mobile platforms to deliver a more personalized, seamless customer experience.

Technology
Investing in advanced technologies is not only a challenge, but essential for insurance companies’ future success. Artificial Intelligence (AI), for instance, can be leveraged to facilitate better product marketing, underwriting decisions and more expedient claims handling. Through Big Data, predictive analytics can be applied in micro-target marketing and more tailored customer service. Today’s leading-edge technologies can also be harnessed to support product research and development, and promote increased cost efficiencies and better operational decision-making.

The Road Ahead
In addition to meeting today’s challenges head-on, carriers, brokers and agents will need to focus on capturing the underserved markets; that is the mass market consisting of consumers with $25,000 to $100,000 in investable assets, and the middle market comprised of consumers with $100,000 to $250,000 in investable assets. According to McKinsey research, there are 68 million households which include mass-market millennials (age 18-34), mass-market Generation Xers (age 35-54) and middle-market Baby Boomers (aged 55 and older). Within these households, 57 percent do not own individual life insurance. By targeting each market niche effectively based on their unique characteristics and life stages, and capitalizing on life trigger events (i.e., marriage, babies, new jobs, etc.), carriers, brokers and agents will be better positioned for growth. For instance, many Baby Boomers are brand loyal, have cash on hand, and therefore are prime for up-selling additional insurance products. Millennials value innovation and socially-minded organizations. Marketing products that are differentiated from others and also communicating a company’s philanthropic activities will score points with this sector.

It’s also important that companies strive to change the public perception of life insurance companies. Currently, industry members are not the first “go to” resource most consumers consider when making financial decisions. By building brand awareness and conveying a company’s value proposition, companies can instill greater consumer confidence in insurers’ and brokers’ vital role in their financial protection and security. In addition to professional marketing and branding, it’s important that product literature and information presented online be fully transparent and easy to understand.

Expanding the Lines of Communication
In 2019, we, at Amalgamated Life Insurance Company, developed a Broker Advisory Council. Our goal was to expand the dialogue between our organization and our broker network. While we have had just one council event to date, it has proven extremely valuable. We are gaining greater insight into what the brokers are hearing from their customers. This feedback includes both general observations relating to what plan sponsors want for their members, and also specific comments pertaining to our various group and voluntary products. We learned from our participating brokers, for instance, that the portable voluntary group level term life insurance product we introduced last March was very well-received by their customers, plan sponsors and members across the country. Having a direct pipeline to a broader cross-section of the marketplace to supplement the input derived from our own sales executives is valuable in our product research and development, underwriting, marketing and customer service.

We’re cautiously optimistic about 2020. Carriers, brokers and agents that adhere to best practices, venture out of their comfort zones with respect to new technologies, and also keep their finger on the pulse of the market can be successful in the year ahead despite the challenges. [JT]

Allianz Life Insurance Company of North America 2020 Carrier Forecast

The Evolution Of FIUL

2020 is sure to bring many changes and opportunities to our industry, but one thing that is likely to continue is the growth of fixed index universal life insurance (FIUL). Since Allianz Life Insurance Company of North America (Allianz Life®) decided to focus on growth in the FIUL market in 2011, FIUL has grown significantly to be the second leading product in the U.S. life insurance market and now comprises 25 percent of total life insurance sales.1

Why has FIUL been so popular? The innovative product design has been the main engine behind the evolution of FIUL, providing consumers with death benefit protection along with accumulation potential and flexibility for the future.

Flexibility is key, as clients are becoming increasingly challenged to find ways to protect their loved ones while also having the ability to address other financial issues. FIUL has helped in that regard, providing financial professionals with a useful financial vehicle that can help their clients meet their financial goals.

Yet, the evolution of FIUL hasn’t come without its challenges. One important issue facing the industry that will continue in 2020 is regulatory change.

Actuarial Guideline 49 (AG 49), has changed the landscape of the industry, especially when it comes to product design and illustration capabilities. Originally, AG 49 was introduced to try to level the playing field regarding how products are illustrated. However, some carriers have incorporated different features and enhancements, including bonuses, to allow the illustrated credited rate to be higher than what may have been intended by the regulators. Increased charges increase the option budget to pay for higher bonuses or higher caps.

This new trend of high bonus, high charge product designs is becoming commonplace in the industry. Although they are generally actuarially sound, these product designs may skew a client’s understanding of potential benefits if illustrations are not explained properly.

Products with higher bonuses may illustrate well assuming a flat interest rate, potentially illustrating higher cash values and higher loan amounts. Questions remain, however, as to how determining the risk profile has changed and what happens in the product knowing it is unlikely the policy would achieve the flat illustrated rate, or the external index experiences some volatility. With an external index, your client’s policy does not directly participate in, or receive dividend payments from any of them through the policy.

It’s important to remind clients that with all FIUL policies, nothing comes for free. If they are seeing a higher illustrated rate, they also need to understand that asset charges will also be higher—so more of the risk in the product has been shifted to them. And perhaps even more important, the higher the illustrated rate and associated charges, the lower the chance of success. If not communicated properly, this could set unrealistic expectations for product performance.

This goes to the topic of product design. Clients have the flexibility to choose how to allocate within their FIUL policy in a variety of ways, from low bonus/asset charge models to options with higher bonus/asset charges that offer the possibility for the highest possible loan solve. A product with a higher bonus/charge design may very well make sense for a particular client, but the bottom line is they need to understand the reality that their chances to achieve that level of success are lower than if they go with a more conservative bonus/charge structure. Unfortunately, when FIUL products are illustrated for prospective clients today, that is not always the case.

Hopefully, later this year when the next phase of AG 49 goes into effect, the issues associated with higher illustrated credited rates will be somewhat mitigated as carriers will need to illustrate at the same maximum illustrated rate, regardless of any bonus or multiplier. This will bring the focus back to product features and financial strength of the carrier—and will also prompt financial professionals to do a better job of telling the complete story of how FIUL products can be designed and what clients should expect from different scenarios.

Given these issues, there are a few things that can be done to help navigate the associated risks:

Understand volatility and sequence of returns—Market volatility has been a near constant for the past few years, and Americans are certainly aware of it. In fact, according to the most recent Quarterly Market Perceptions Study from Allianz Life, Americans are increasingly anxious about the effects of market volatility on their finances and 50 percent now say they are worried a major recession is coming.2 This volatility could create an issue if your clients start taking distributions from retirement accounts at the wrong time, which can create a problem with sequence of returns. Sequence of interest rates can also impact an FIUL policy. While a policy may still achieve six percent overall, the policy likely will get there by achieving varying interest rates. For example, over a four year period, the policy may return 12 percent, eight percent, zero percent and four percent averaging out to a six percent credited rate. The order of that sequence is what matters—especially in the zero percent years. Once your client starts taking loans3 from any available cash value accumulation through annual interest credits earned in the policy when the external index experiences positive index returns, an FIUL policy becomes much more vulnerable to sequence of interest rates. Understanding how variations in credited interest can affect their policy is important, as it can impact how much can be accessed from the policy and how long it will remain in force.

Determine risk profile—Figuring out how much risk your client is willing to take to accomplish their financial goals is a fundamental part of the financial planning process, and should be a key topic when discussing their FIUL policy. For example, if your client wants to have a death benefit of $500,000 with potential loan amounts of $50,000, how much are they relying on a certain illustrated rate to achieve the loan amount? Can they take the risk of higher charges and potentially outperform, or should they pick an option that could be a little more stable? This is a crucial conversation to have with your client in order to determine how they can most effectively use their FIUL policy to accomplish multiple financial goals.

Set expectations—Equally important to discussing risks with your client is setting their expectations about how their FIUL policy fits into their overall financial plan. Be sure to talk with your client about the full range of possibilities—what can go right, what can go wrong, and what different decisions regarding where to allocate their money truly mean. This includes talking about the various index allocation options and loan flexibility issues. It is important to review your client’s FIUL policy annually to make sure it is meeting their financial goals.

Run multiple illustrations—Provide your clients with multiple illustrations at different rates, also refer to the guaranteed rate scenario, so they can see the impact of potential underperformance—not just the best case scenario. Different illustrated rates will also show how the loan amounts can be impacted in different market environments and how the loan amount may need to be adjusted in the future to help the client reach their goals.

Utilize available tools—In addition to showing the impact of sequence of returns and various return levels, look to utilize other pre-approved tools that can help explain different outcomes. Examples include benchmarking tools that allow you to compare indexes and look at historical performance, or charge ledgers that can help compare product to product.
With the growing need for flexible solutions that can help Americans address a variety of common financial concerns, the future looks bright for FIUL. It’s dependent on our industry to help our clients understand the complete picture and make sure the FIUL story remains a positive one going forward. [JW]

Notes:

  1. 3Q 2019 LIMRA’s U.S. Retail Individual Life Insurance Sales by Channel with All Splits.

2. Allianz Life Quarterly Market Perceptions Study, October 9, 2019.

3. Policy loans and withdrawals will reduce the available cash value and death benefit and may cause the policy to lapse, or affect guarantees against lapse. Withdrawals in excess of premiums paid will be subject to ordinary income tax. Additional premium payments may be required to keep the policy in force. In the event of a lapse, outstanding policy loans in excess of unrecovered cost basis will be subject to ordinary income tax. If a policy is a modified endowment contract (MEC), policy loans and withdrawals will be taxable as ordinary income to the extent there are earnings in the policy. If any of these features are exercised prior to age 59½ on a MEC, a 10% federal additional tax may be imposed. Tax laws are subject to change and you should consult a tax professional.

Life insurance policies require health and financial underwriting and have certain fees and charges associated with them that pay for the death benefit, underwriting expenses, and issuing and administering the policy. These policy charges would continue to be deducted, and loans will reduce the policy values and could cause the policy to lapse.

Bonus products may include higher surrender charges, longer surrender periods, lower caps, or other restrictions that are not included in similar products that don’t offer a bonus. The index allocations that offer the interest bonus will generally have lower caps and participation rates. There is no guarantee that a policy will be credited with an interest bonus every year as it is based on the growth of an index.

Product and feature availability may vary by state and broker/dealer.

Guarantees are backed solely by the financial strength and claims-paying ability of Allianz Life Insurance Company of North America.

Products are issued by Allianz Life Insurance Company of North America, 5701 Golden Hills Drive, Minneapolis, MN 55416-1297. 800.950.1962. www.allianzlife.com.

National Western Life Insurance Company 2020 Carrier Forecast

Here Today, Here Tomorrow

In 2020 and beyond, NWL aims to uphold the power, financial strength, and dedication necessary to continue providing high-quality insurance products with the reliable protection and product performance our clients and agents have grown to expect. As a company, it’s our goal to provide peace of mind for every person who seeks security through a financial product. As we enter the 2020s, we’re excited and looking forward to a year and decade bound to be full of opportunity.

We’re here today and we’ll certainly be here tomorrow.

2019: A Year for Mapping the Blueprint
Without properly reflecting on the work that got us to where we are today, our goals and objectives for 2020 and beyond wouldn’t carry the same weight. Last year presented NWL the opportunity to examine where we are today and where we’re headed as a company—two important elements that helped us identify strengths and areas of opportunity.

Throughout 2019, we diligently mapped out the blueprint for our future. We redefined and validated the organizational strategic planning process. We also took time to reassess our product portfolio, identifying areas for enhancement and refinement. Essentially, we carved out the next decade at NWL—one that is full of success and positions us for steady, secure growth.

Moving Forward into 2020
At NWL, 2020 is all about strengthening our already firm foundation.

Equipped with new colleagues possessing skillsets new to NWL, advanced tools and a reinforced business outlook, NWL is set for success in 2020 and beyond. Supported with our 60-plus years of experience, and our commitment to build for the future, we continue to stay true to proven products and business processes, and at the same time, we’re excited to implement new and unique strategies that support our core values.

Creating a Culture of Transparency
As we prepare for continued growth, we will also continue embracing a culture of transparency that all company stakeholders can support. We understand that annuity and life insurance products are a significant component of one’s retirement portfolio, so we’re providing agents and clients clear, easy-to-understand information that empowers them to make effective decisions that fit their individual needs.

Investing in Innovation
In this ever-changing landscape, it’s critical to continue evolving as an organization. Much like our policyholders are investing in their futures, we’re doing the same. NWL is making strides to stay attuned to industry trends and adapt to the changing needs of our clients.

As the industry continues to digitize, NWL is doing the same. We’re leveraging technology and using data analytics and metrics to be more efficient and effective in helping our NMOs and agents better meet the needs of their clients. An enhanced agent portal experience means faster access to the forms, information and answers agents need to be successful. New distribution channels will help us get the right products to the right people at the right time.

Reaffirming Our Commitment
Among the many updates and newly-identified objectives, there is one characteristic about NWL that isn’t changing anytime soon: Our drive to provide high quality insurance products on a global basis through professional and friendly service. In the last two years, NWL brought on board several industry-leading executives highly skilled in their unique areas of expertise to further refine the blueprint and begin digging the foundation for future growth. Their commitment and leadership will continue to play a key role in revitalizing our product line, opening up new distribution opportunities and making business with NWL easier and more efficient.

With a leadership team with proven experience growing organizations, new investment in our technology stack, and the reinvigoration of our product line and distribution channel, NWL is poised for growth and ready for success in 2020 and beyond. [JR]

Mutual Trust Life Insurance Company, A Pan-American Life Insurance Group Stock Company 2020 Carrier Forecast

Relax, Things Are Better Than You Think

Last December there was an excellent article in The Washington Post by Arthur C. Brooks. The title of the article caught my eye as I was scrolling through my newsfeed—The World Is Doing Much Better Than The Bad News Makes Us Think. Encouraged to find positive news, I read it and shared it with friends and family, thinking that others might be in need of an uplifting read as well. In short, the article talked about how, as a rule, we tend to believe that the world is getting worse, when it actually is getting much better. The author posits that this is a result of eons of evolution that draw our attention to negative stimuli as a means of survival. We like nice things, but “bad things can be deadly, so [we] focus on them.” That attention bias applies to news as well, so since negative news = attention = clicks/ratings = revenue, it’s easy to see why we view the world through an unnecessarily negative lens. As an aside, I recommend the article, as it does have an uplifting message and some welcome good news. The reason I bring it up here is that the same bias applies to news about our industry. And much like the world around us, things are actually getting much better, despite all the clickbait to the contrary. In fact, as we head into 2020, things really are better than you think.

We have more and better product offerings than at any point in our industry’s history. Carriers spent most of 2019 repricing, redesigning and filing their product portfolios to incorporate the 2017 CSO table. This was not only an enormous undertaking by the carriers, but also by the state Departments of Insurance, which had an avalanche of product filings to review in a relatively short period of time. As is always the case, our industry stepped up and our clients benefitted. They now have access to updated products that often provide more death benefit for their premium dollar, while still providing cash value for flexibility and valuable living benefits for the “what ifs.” Yes, some cash value driven policies saw some marginal decreases, but the overall value that many of these policies provide has never been greater, the opportunities for distributors have never been more plentiful and our industry’s core mission—to help people at the worst times in their lives—has never been more fulfilled.

We are helping more people than ever and have a potential impact on society that is second to none. According to the 2019 ACLI Life Insurers Fact Book, Americans purchased $3 trillion of life insurance death benefit in 2018 and total life insurance coverage in the United States at the end of 2018 was almost $19.6 trillion. Individual life insurance comprised over $12 trillion of that total. While the numbers in 2018 were down slightly from the previous few years, that total is staggering and its potential impact cannot be overstated. However, that’s just the tip of the iceberg. For example, in 2018 alone, in addition to paying $80 billion in death benefits, life insurers also paid $35 billion in cash surrenders and $15 billion in dividends to policyholders. When you include annuity benefits and health insurance benefits paid by life insurers, it’s clear that our industry does a lot of good for clients, for communities and for society as a whole. I have said for years that one of the reasons I love my job is that, most days, the work I do is going to help someone I don’t know and will never meet. That’s a great reason to get up in the morning.

We are getting more efficient every day. Not a day goes by that we are not reminded in some form about the challenge of a persistent low interest rate environment. It puts pressure on yields, which in turn puts pressure on product pricing, which in turn puts pressure on sales teams and on distributors. How will we survive? The way we always have—through innovation and increased efficiency. I know that “innovation” and “insurance” aren’t words that we would normally place in the same sentence, but we innovate in our own way. That may sound sarcastic, but it really is not. Sure, innovation in insurance used to be illustration software on floppy disks, but this isn’t your parents’ insurance industry anymore. State-of-the-art administration systems that enable e-application processes and automated underwriting processes are becoming the norm, increasing efficiency in the home office and the field and improving the customer’s experience. All of these came from the need to lower costs, improve profitability and make our products easier to buy. We constantly hear that no one has ever seen an interest rate environment like the one we have now. I would also bet that there was a time when no one thought that we would get to a point where a client could get a fully underwritten policy at preferred best rates without a blood test and medical records. So, low interest rates will continue to apply pressure on carriers, on product pricing and on distribution? Good! I can’t wait to see what we think of next!

I am just as excited about the prospects we have at Mutual Trust. We put our product plan for the 2017 CSO in place more than two years ago, introduced our first 2017 CSO product in October 2017 and haven’t stopped introducing new and improved products since. The result is the best and the broadest portfolio of products that we have ever had—all filed, approved and ready for sale with months to spare. We are using that portfolio to help more people than we ever have as well. In fact, in addition to record growth in sales in 2019, we also set a record for the highest amount of death benefits issued in our company’s history. You better believe that we are celebrating both! Finally, our efforts to improve efficiency never end. 2019 brought the first automated underwriting program to Mutual Trust. 2020 will bring an improved licensing and contracting process, an e-application process and another new, competitive product for our clients and distributors.

Thank you to all of our valued distributors for a record-setting 2019! Here’s to another great year in 2020—it’s going to be even better! [LC]

Mutual of Omaha 2020 Carrier Forecast

2020 Vision: Looking To The Future

As we look to 2020, consumers, brokers and insurance carriers alike face a common reality: Our world is as complex as it’s ever been.
Technology continues to change at a rapid pace. We’ve evolved from smart phones to smart homes—digital devices are at the core of our daily lives. Technology has transformed the way consumers approach purchases, the way brokers reach consumers and the way carriers support both.

Political and economic headlines dominate the news, causing uncertainty for consumers and businesses. These realities influence the way we think and plan.

Interest rates remain at historically low levels. This sustained trend impacts the way consumers invest and save and the way brokers advise those consumers.

Healthcare costs continue to rise at an increasing rate. This trend impacts the way seniors approach insurance purchase decisions, as well as the way younger consumers plan for retirement.

And the list goes on. The only constant in today’s world is change. So, what does all of this mean for brokers and insurance carriers in 2020?

The Importance of Trust
In such a rapidly changing and complex world, consumers are increasingly seeking advice from sources they trust. Individuals and companies they can count on.

For 110 years our focus has been on earning the trust of our customers. As a highly-rated mutual company we are owned by our policyholders, so our interests are fully aligned with our customers. Our commitment to those customers is to fulfill the promises we make and to be a strong partner they can count on.

We continue to invest in new technology to address the changing needs of consumers and brokers. We continue to listen to customers, acting on what we hear to enhance the customer experience. And we continue to make sound financial decisions to ensure our long-term strength and stability.

In 2019, Mutual of Omaha partnered with brokers to continue earning the trust of their customers in some key ways:

  • We introduced a new IUL Express product and promoted the solidity and strength of our IUL Advantage and IUL Protection products through our IUL Strong campaign.
  • We introduced a new 5- and 7-year guaranteed deferred annuity product—Ultra Premier Annuity.
  • We enhanced several underwriting tools including automated underwriting screen mobility, a smoother email signature process, a touch-enabled signing process and the ability to get a decision day or night.
  • We provided updated long term care Cost of Care data to our field.
  • We updated our products to comply with the 2017 CSO Tables.
  • We expanded our Medicare Advantage product into two new markets—Dallas and Denver.
  • We enhanced our Medicare supplement offerings with the nationwide release of a new High-Deductible Plan G and our new wellness program, Mutually Well.

In 2020, we will build on our strong, stable and secure foundation as a preferred insurance carrier and continue to earn the trust of brokers and customers in a variety of ways:

  • We will be making some pricing adjustments on our Living Promise Level and Graded products to ensure our solutions are delivering value to customers in a competitive marketplace.
  • We will be discontinuing our GUL product effective January 1, 2020, to focus on other more competitive and value-added solutions.
  • We will continue to add automated underwriting for additional life insurance products.
  • We will continue to expand technologies with e-applications and mobile quoting.
  • We are continuing to refine the auto-issue process for our Children’s Whole Life product.
  • We are working to develop and launch a new and improved Disability Income product.
  • We will continue to focus on providing our customers age 65 and over competitive products that meet their healthcare needs.

Since 1909, Mutual of Omaha has been delivering solid financial solutions for every customer at every stage of life. We remain committed to our brokerage community, positioning you for success in 2020 and beyond. [TG] [RM]

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