Assurant Pulls the Plug Who's Next?

[FLM2]

Assurant is going to 0% compensation in 7 states as of Monday, including Florida, Georgia, Texas, Michigan, Nevada and two others.

I didn't expect this but it is clearly an indicator of likely future events with other carriers. Assurant has always been an agent-friendly insurer, for them to take this step is a real comment that this is an unsustainable system that needs to be changed or it will collapse.

While nothing will really change for agents in 2015 since most of us have our business in place, 2016 will be a year where the next bricks will fall and, by 2017 or 2018, all that will probably be left for agents is scraps.

I've always had Plan B in the event this occurred, at least I have all of 2015 to put the plan in motion.

 

[YouGotMyMoney]

I do feel for the FL clients, Assurant was the only true PPO option outside of Blue Options.

And on the whole they have had Much better CS than UHC. This is bad, very bad.

Don't count your commissions...

 

[HealthGuy]

Sounds like this is SAD....BUT TRUE !

 

[Yagents]

Has anyone heard if this is a short term or long term decision?

Me thinks they will revisit this after OEP ends, and the dry SEP season is upon us.

Also, what about renewals for ON exchange policies? Will active renewals or passive renewals on HC.gov, still receive renewal commissions? I assume OFF exchange will, maybe passive HC.gov renewals, but not "active" renewals possibly as they do create a new policy # when received.

I heard they got too much business in a 60 day period to handle (like myself), causing service levels to drop on all fronts. The cancellation of Non GF policies caused a tidal wave of apps this year, and will happen again next OEP.

Pull back, recover, and push forward again.

 

[FLM2]

Has anyone heard if this is a short term or long term decision?

Me thinks they will revisit this after OEP ends, and the dry SEP season is upon us.

Also, what about renewals for ON exchange policies? Will active renewals or passive renewals on HC.gov, still receive renewal commissions? I assume OFF exchange will, maybe passive HC.gov renewals, but not "active" renewals possibly as they do create a new policy # when received.

I heard they got too much business in a 60 day period to handle (like myself), causing service levels to drop on all fronts. The cancellation of Non GF policies caused a tidal wave of apps this year, and will happen again next OEP.

Pull back, recover, and push forward again.

I had a long conversation with my RSD this morning-anything is possible, of course, but I doubt they will restore commissions at any time, the business model just doesn't work for them because their national network attracts lots of people with significant medical needs.

 

[Ann H]

Their latest financial reports show $6.6 million in net income in Quarter 3 of 2013, versus versus $274 million of LOSS in the same Quarter 3 of 2014. They had $257 million in risk adjustment and re-insurance programs, resulting in a net loss of $17 million in Q3 2014. That's huge, especially since the 3R's are set to expire. Also, if no insurance company in a particular state will see a profit, then there will be no profits to share among all insurers in that state under the 3R's anyway. So, that means they are looking at probable losses in the $250 million range if there are no risk mitigation programs.

http://ir.assurant.com/files/doc_ne...-3Q14EarningsRelease-10-29-14_v001_g5081v.pdf

 

[FLM2]

Their latest financial reports show $6.6 million in net income in Quarter 3 of 2013, versus versus $274 million of LOSS in the same Quarter 3 of 2014. They had $257 million in risk adjustment and re-insurance programs, resulting in a net loss of $17 million in Q3 2014. That's huge, especially since the 3R's are set to expire. Also, if no insurance company in a particular state will see a profit, then there will be no profits to share among all insurers in that state under the 3R's anyway. So, that means they are looking at probable losses in the $250 million range if there are no risk mitigation programs.

http://ir.assurant.com/files/doc_ne...-3Q14EarningsRelease-10-29-14_v001_g5081v.pdf

Ann, it's pretty obvious that private insurance companies that offer PPO plans are going to get smoked with losses under ACA. Agents are low hanging fruit, they can put about 10% of their revenue back to the P&L without really losing much in revenue-the big loser in all this is the consumer that loses our advice.

This whole market is going to be toast in a couple of years, I have never thought that until today, and everyone who depends on health insurance for a living needs a long term, alternate plan before the end of 2015.

 

[hamben]

For them to violate the contract by not giving 30 days advance notice something big has to be going down. In my opinion their losses have to be significant enough to put Their reserves in jeopardy. pretty much the same thing that happened a to co opportunity here in Nebraska and Iowa.

 

[Tkruger]

Alternatively, if your only carrier was the aforementioned feel free to contact me if you still want to write On Exchange business through the end of OE.

 

[KennyWest]

Just got the email, copied and pasted below:

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Assurant Health
Important notice regarding commission changes

Assurant Health has made the decision to reduce individual major medical commissions in Florida, Georgia, Indiana, Michigan, Nevada, Pennsylvania and Texas to 0% for new business.

This change will apply to all new business submitted on or after January 19, 2015, with an effective date on or after March 1, 2015.
For all the business you’ve previously written, rest assured you’ll be paid according to the current commission structure—this change does not impact that business.

Our supplemental products are not impacted by any of these changes.
While the strong sales we’ve seen are important, the changes we’re making to our sales approach in these markets will ensure overall profitable growth to meet the long-term commitments to our agents and shareholders—and help us meet the service and support expectations of our customers.

We continue to have many supplemental options as well as Short Term Medical in these markets, and look forward to working with you on these product opportunities.

Assurant Health remains committed to the individual marketplace and to you, our valuable distribution partner. We are looking forward to the next Open Enrollment period beginning October 1, 2015, and to offering a full suite of ACA-compliant major medical plan options to support you and your customers as we work together for your sales success.

Commission schedules have been updated to reflect this change. Log on to assuranthealthsales.com to review your updated schedule.

Thank you for your efforts on behalf of Assurant Health. If you have any questions, please contact your sales representative.

Sincerely,



Charles Steele
Senior Vice President, Executive Sales Officer

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