Ratings Updates

Entries for February 2012

As expected Sun Life who has exited the US market was subjected to a downgrade to BBB+ by S&P. No other changes of interest this month but earnings season showed great variability in results.

  • Lincoln Financial announced significant losses in the 4th Quarter
  • Hartford's profit dropped 79% in the quarter
  • Prudential was up 30% over the prior year.
  • TARP baby AIG reported almost $20 billion in profits compared to a loss of over $2 billion the prior year.
  • Allianz and CNO (formerly Conseco) posted declines.

Annuities are in the news:

  • Hartford and Genworth have entered the indexed annuity market, the "hot" segment for annuity sales.
  • Annuity suitability standards are being passed by many states, now at 20, with Florida being the most recent.
  • New contingent deferred annuities are emerging and reserving practices are being studied.

Other headlines of interest:

  • Unum has now exited the group LTC (long term care) market, the most recent exit to this challenged business line.
  • New York Life and Northwestern Mutual both announced significant distribution expansion with plans to hire 3700 and 5000 representatives nationally.
  • Obama's proposed budget for 2013 would impose sweeping tax hikes on the industry.

Finally, the good news for the industry is that sales increased for the year by 2% for the second year in a row and application counts were reported to be significantly up in January.

 

We recently were engaged to help a client determine a reasonable balance between financial strength of the company and its competitive position. The agent had submitted over a dozen proposals and there was some concern about the long term viability of the most aggressive illustrations. Though there is no way to be certain how companies will perform in the future, we were able to help create a lens through which to view the products and the company's financials to help the client reach a decision.

 

If we can be of any help to you or your clients on life insurance matters please give us a call at 205.414.9955.