NU Online News Service, Nov. 7, 2003, 10:57 a.m. EST – Nearly one-third of chief financial officers at U.S. life insurance companies say their companies might limit sales of some life insurance and annuity product guarantees in the next six to 12 months, according to results of an informal survey by Tillinghast-Towers Perrin, New York.
Researchers at the actuarial consulting firm are basing their conclusions on completed questionnaires from 26 life insurance company CFOs.
The researchers found that the participating CFOs believe features such as guaranteed annuity death benefits and universal life no-lapse guarantees help their companies compete for business.
The share of participating CFOs who gave high importance ratings to minimum guaranteed interest rates on variable annuity fixed accounts was only 31%, and the share was only 37% for minimum guaranteed interest rates on universal life policies. But 55% of the CFOs gave high importance ratings to minimum guaranteed interest rates on fixed annuities, and 65% gave high importance ratings to UL no-lapse guarantees.
Seventy-five percent of the CFOs agreed that variable annuity guaranteed living benefits are extremely or very important, and 83% said VA guaranteed death benefits are extremely or very important.