Here’s a roundup of some of the news and events from a wide range of topics coming across the wires from life and health industry organizations and companies lately.
Organizations represented in the following blurbs include MIB Group, Gerber Life, Jackson National Life, AALTCI, the Insured Retirement Institute, Allianz Life and Northwestern Mutual.
U.S. life insurance application activity down in January
U.S. life insurance application activity turned sharply lower in January 2018, with the composite MIB Life Index off -4.4%, year-over-year, according to the latest report released Feb. 13.
The MIB Life Index ended 2017 off -1.8% YTD after the Index experienced consecutive declines in all but the last two months of the year. January’s activity was -3.5% lower than that of December 2017, in a month-to-month time period that has shown increases in the last three years consecutively.
U.S. life insurance application activity was off across all age groups with the younger ages a bit more resilient to the downturn. Application activity ages 0-44 were off -3.7%, activity ages 45-59 was off -6.3%, and activity ages 60+ was off -3.6%.
Despite the January downturn, last year’s gains were clearly focused in the 0-44 age group, which gained ground in both Q3 2017 and Q4 2017 up 0.2% and 1.6%, respectively and finished the year just below par, off -0.7%YTD.
Watch MIB’s 2017 year-end MIB Life Index interview with MIB CEO Lee Oliphant for all the details including January’s activity at http://wi.st/2CejeJq. Download the 2017 MIB Life Index Annual Report at no charge by registering at the Enhanced Life Index Portal: www.mibsolutions.com/regLI or login at https://portal.mibsolutions.com/welcome.
Nestle considering selling off Gerber Life
The board of directors of Nestle S.A. will explore options for its Gerber Life Insurance business, including a potential sale, it was announced during a 2017 earnings conference call in Vevey, Switzerland on Feb. 15.
The Gerber Life Insurance business is a financially separate affiliate of Gerber Products Co., but it was part of Nestle’s Gerber acquisition from Novartis in 2007. The Gerber Life Insurance business had sales of $908 million in 2017. Nestle said it remains committed to its Gerber baby food business.
Jackson National Life consolidating offices
Jackson National Life Insurance Co. will shut down its Denver office by the end of 2018, according to a notice Lansing, Mich.-based retirement and financial services firm filed Feb. 13 with the state of Colorado’s Labor Department.
The filing was required due to the Worker Adjustment and Retraining Notification Act, or WARN notice, mandating employers tell a state when it plans to shut down a facility or lay off large numbers of workers. The exit out of Colorado will result in 370 job cuts among employees of the sales and marketing-focused arm of the company, Jackson National Life Distributors LLC.
In recent months the company also filed WARN notices in Wisconsin, Florida and California. Jackson National spokesperson Melissa Hernandez told The Denver Post that the closures are due to the company expanding near its Michigan headquarters and its offices outside Nashville and Memphis, Tenn. Most of the company’s distribution work is being consolidated in Memphis, and many Denver positions will be relocated there to “maximize both operational and economic efficiencies,” Hernandez said.
Jackson National is one of the top annuity sellers in the U.S., with more than $12 billion in sales and deposits for all of its products in the first half of 2017. Wink’s Sales & Market Report for 3Q 2017 ranked Jackson National Life as the No. 1 carrier in fixed annuities, with a market share of 16.5%.
AALTCI launches national 1035 exchange awareness effort with online guide
A new guide published by the American Association for Long-Term Care Insurance (AALTCI) kicks off a national campaign to heighten awareness for the use of 1035 exchanges for effective and tax-advantaged LTC planning.
The AALTCI Guide To Long-Term Care Planning Using 1035 Exchanges formally launches the national consumer and insurance-focused campaign.
“Section 1035 exchanges are one of least known planning strategies,” said Jesse Slome, executive director of AALTCI. “Every insurance agent and financial professional who has prospects or clients in their 50s, 60s and 70s are going to need to familiarize themselves with 1035s.
“Americans have $2.8 trillion in fixed and variable annuities and we know far too few older adults have a financial strategy to deal with the real risk of needing long-term care,” Slome said. “Many of these individuals could benefit by taking advantage of a 1035 exchange; repurposing an existing annuity into one that continues to accrue but also can provide.”
To access the 1035 exchange guide online visit the American Association for Long-Term Care Insurance’s website at www.aaltci.org/1035-exchanges.
IRI releasing its 2018 Retirement Security Blueprint Wednesday
The Insured Retirement Institute (IRI) will host a conference call at Noon this Wednesday, Feb. 21, to unveil its 2018 IRI Retirement Security Blueprint.
As the IRI’s executive summary of legislative and advocacy priorities for 2018, IRI says the Blueprint lays out common sense, bipartisan policies to protect retirement savers and help Americans achieve a secure and dignified retirement.
The Retirement Security Blueprint objectives include:
- Maintain and enhance current tax treatment for retirement savings
- Increase opportunities for Americans to save for retirement by expanding access to and features of workplace retirement plans
- Augment resources to encourage reporting and protection of older Americans from financial exploitation
- Expand access to lifetime income products by reforming, modernizing and simplifying retirement plan rules
- Assist American savers in making decisions about their finances by improving and preserving access to professional financial guidance, education and information.
Details about these objectives will be covered during the call.
Not-for-profit IRI is the leading association for the retirement income industry, leading a national consumer coalition of more than 30 organizations, and is the only association that represents the entire supply chain of insured retirement strategies.
IRI members are the major insurers, asset managers, broker-dealers/distributors, and 150,000 financial professionals. Learn more at www.irionline.org
Allianz Life reports strong 2017 financial results
Minneapolis-based Allianz Life Insurance Company of North America (Allianz Life®) announced its 2017 financial results on Feb. 16, with operating profit remaining nearly level at $1.18 billion. Assets under management rose to $136.3 billion, up 8.7% over the previous year, while net income came in above expectations at $711 million.
Total premium of $11 billion met 2017 expectations, which were lowered from 2016 due to preparations for key regulatory changes, and a challenging interest rate environment for life insurers.
Some highlights:
- Fixed index annuity sales remained solid at $7.5 billion as Allianz Life retained its ranking as the No. 1 seller of this product for the 8th consecutive year, according to Wink’s Indexed Sales & Market Report, 4Q 2017.
- Life insurance and index variable annuity (IVA) sales achieved strong growth with new life insurance premium up 31% to $94 million and IVA sales rising 50% to $2.17 billion. The company disbursed more than $2.7 billion in benefits to its policyholders and contract owners via life insurance and annuity payments, up 4% percent from the prior year.
“We are very pleased with our 2017 results,” said Walter White, president and CEO of Allianz Life. “We see growing demand for our protection and retirement income products, and anticipate another strong year in 2018 as we continue to introduce product innovations and new digital capabilities.”
Allianz Life also announced Standard & Poor’s recently affirmed the company’s rating of AA (Very Strong), the third highest of 21 possible ratings. Earlier in 2017, Moody’s Investors Service upgraded Allianz Life’s financial strength rating from A2 to A1 with a stable outlook. A1 is the fifth highest of 21 possible ratings. A.M. Best affirmed the company’s rating of A+ (Superior), the second highest of 16 possible ratings, in August 2017.
Northwestern Mutual posts strong 2017 financial results
Northwestern Mutual announced Feb. 15 that its 2017 results show another year of strong financial performance. The results were bolstered on the client side by consistently growing demand for holistic insurance and investment solutions, and on the corporate front by a diversified investment approach coupled with disciplined expense management.
“Our results make clear how we are able to do three key things: pay the benefits we promise to policyowners and their beneficiaries, provide the opportunity to share in a dividend payout that today leads the industry, and remain a company with exceptional financial strength,” said Chairman and CEO John Schlifske. “We also continue to invest in a distinctive client experience that will help more people achieve financial security.”
At year-end 2017, the company’s results included:
- Total surplus (including the asset valuation reserve) finished the year at an all-time high of $25.2 billion, an increase of $1.5 billion. The result is even with a one-time $1.2 billion reduction in surplus related to net deferred tax assets due to the recent enactment of tax reform and a lower corporate federal income tax rate. The company expects the tax law changes to be a long-term positive that will benefit earnings beginning in 2018.
- The highest-ever new life insurance premium at $886 million, alongside total premium revenue of $17.9 billion for insurance and annuity products.
- A record $125.1 billion of client assets under management for investment products and services – up 25% from 2016.
- Growth of the general account investment portfolio to $225.5 billion, an increase of $11.9 billion since year-end 2016.
- Low life insurance unit costs, a reflection of continued, disciplined expense management.
The company expects to pay a total dividend of $5.3 billion to policyowners in 2018, one of the highest payouts in the company’s history. It also maintained the highest financial strength ratings awarded to any U.S. life insurer by all four of the major rating agencies.
Other notable 2017 business results included:
- Total revenue, $28.1 billion, and total assets, $265.0 billion.
- $10.3 billion in benefits paid to policyowners and their beneficiaries.
- Approximately 85% of dividends paid to traditional permanent life insurance along with expected dividends on individual disability insurance ($377 million) and annuities ($67 million).
Schlifske noted that Northwestern Mutual is transforming to close a perceptible gap between what consumers need and what they’re now getting from most of the financial industry.
“We are creating a seamless experience guided by a trusted advisor and powered by an innovative digital platform,” he said. “This combination will help more people achieve the financial security they need and deserve.”
