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Life Health > Life Insurance

Analysts: Product Repricing Coming

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Claims could be a bigger concern for life insurers than capital ratios and asset valuations over the next 18 months.

A team of analysts led by Colin Devine of Citi, New York, has included that prediction in a comment on a Citi securities analyst meeting with rating analysts.

Both Citi and the rating analysts believe that insurers are fundamentally strong, but that low interest rates and weak stock markets could hold down growth for the rest of the year, the analysts say.

The Citi analysts say they are much more skeptical than the rating analysts they met about the idea that life insurers will be able to exercise enough self discipline to hold mortality and morbidity steady.

“We believe that, with the exception of a few companies that were unwilling to sacrifice pricing discipline to boost sales, underwriting benefit ratios and earnings for many insurers will remain volatile and at historically high levels as they scramble to reprice products such as group disability, group life, variable annuities with guaranteed living benefits (VAGLB), secondary-guarantee universal life (SGUL), long-term care (LTC), and multi-year level term life,” the analysts say.

- Allison Bell

Other securities analyst commentary coverage from National Underwriter Life & Health:


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