InsuranceNewsNet Magazine February 2012 : 26
[ LIFE WIRES ] Bank Life Sales Try To Grow Again Bank life insurance sales have taken a Quarterly Bank Life Sale —Total New Premium ($ in millions) dip over the past few quarters. They were recovering a little bit in 2011— 482 513 425 with 3Q up nearly 5 percent over 2Q— 417 363 381 347 363 and 2Q up nearly 11 percent over 1Q. 328 313 But at $363 million in premium, 3Q 202 229 225 180 190 sales were 30 percent below the record of $513 million set in 3Q 2010, accord-ing to the Kehrer-LIMRA Life Report. 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q That is a sobering number, but not 2008 2009 2010 2011 entirely unexpected, according to Kehrer-LIMRA. A year ago, the researchers explain, a few life insurers made changes that “torpedoed” bank life sales in subsequent quarters. Those changes included Allstate’s decision to drop out of the market as well as Transamerica’s decision to take its leading product off the shelf, the researchers say. It could be that independent life agents will view the 3Q news as a sign that bank competitiveness in life sales is on the wane. But that may not be the case. As Kehrer-LIMRA points out, bank life sales are once again trending in the “right direction,” and based on the life products being sold there, “bank-based reps are starting to get the hang of the wealth transfer life insurance sale.” Then again, the clientele and products sold in banks are not exactly in the independent advisor’s sweet spot. For example, 95 percent of premium sold in banks today is paid in one lump-sum, according to Kehrer-LIMRA, noting that a lot of the sales entail simplified-issue, single-premium products. Most likely, it will be a while before independent life insurance advisors will go head-to-head with banks’ sales teams. think of life insurance as an investment option. That is so, even though almost half told the researchers that “low risk” and “tax-advantaged growth” are priorities when investing in today’s volatile market—and even though 63 percent of consumers do have life insurance, NAIC says. Those could be talking points with cli-ents, especially considering the source. outlook stAble, not sunny it’s costing more to die If you think the United States is the only country struggling with end-of-life challenges, think again. Dr. Kate Woodthorpe, a lecturer in sociology at the University of Bath in England, says that in England and Wales, the number of deaths is expected to rise by 17 per-cent, or an additional 80,000 deaths a year, by 2030. That’s up from an all-time low of 491,348 deaths in 2009. Meanwhile, she says in an Annual Cost of Dying report published by Sun Life Direct of London, people are living longer, using more personal and govern-ment resources, even as costs for social care go up, living standard expectations are high and expectations for intergen-erational wealth transfer continue. At least someone has some positive news for the U.S. life insurance industry in 2012. That “someone” is Fitch Ratings. It has found the industry’s outlook to be “stable” for 2012. That is based on “very strong balance sheet fundamentals” that should help “somewhat” to mitigate concerns over challenging macroeconomic conditions, Fitch adds. In addition, the Chicago rating service says the industry’s “liquidity profile has strengthened significantly relative to pre-crisis levels.” This might sound good but don’t plan a party just yet. Fitch cautions that the positives of 2011, such as earn-ings performance and investment results, will be “pressured” in 2012. And why is that? The usual suspects are to blame: low interest rates, increased hedging costs and ongoing market volatility and pressure from variable annuity holdings. WhAt they don’t knoW About life frAud Plot bAckfires Some consumers are just plain clueless about life insurance. Even the state reg-ulators are finding that out. Consider this: more than two-thirds of consumers recently surveyed by the National Associa-tion of Insurance Commissioners (NAIC) didn’t know that certain types of life insur-ance include a cash value. In addition, 65 percent don’t know that certain types of life insurance include a dollar amount that is guaranteed to increase in value and may provide tax benefits, and nearly half don’t KNOW DID YOU ? the three days when the most people die of natural causes, in an emergency setting, are Dec. 25, Dec. 26 and Jan. 1. Meanwhile, the number of life insurance policies issued at that time of year tends to drop. Hmm… food for thought? Source: ANICODirect.com February 2012 A woman, her son and an accomplice have all been convicted of a life-insurance-moti-vated murder of the woman’s husband, Alberto Rodriguez Macias, in March 2010. The California trio shot him in an attempt to collect nearly $1 million in life insurance death benefits, according to a report in the Merced Sun-Star . But instead, all three got the slammer. The Merced County Superior Court hit the ringleader—the wife, Laura Hernandez—with 15 years to life in a plea agreement, according to the report. As for the other two: triggerman Edgar Garcia got 21 years and Laura’s son, Erick Camarillo, got six. So, what’s the moral of this story? Don’t try and waste someone or else you may end up wasting many years of your own life instead. 26 InsuranceNewsNet Magazine
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