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5 of the biggest insurance stories this week

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This time, we bring you news that will affect the NFL and its players’ disability insurance and how the life settlement industry is growing. On page two, you will read more about why Aegon agreed to sell its Canadian life insurance business and how much they expect to lose in that transaction, and you’ll learn about an initiative that helps employees understand how to buy health insurance using the exchanges.

Then, on the third page, there’s everything you need to know about new or redesigned products and how a carrier’s deferred income annuity surpassed the $2B sales mark. You will find key designations from ACLI, LIMRA and Brokers International on page four and awards from all over the industry that even reached Congress and include a big celebration for an agent’s 50th anniversary in the industry.

1. From disability insurance in the NFL to life settlements news and how Aegon sold its Canadian life insurance business

The NFLPA launches disability insurance program

The NFL Players Association announced to its members the launch of a new disability insurance program created and administered by Petersen International Underwriters, the disability income protection specialists out of Valencia, California.

The program will provide members of the National Football League Players Association with career-ending, permanent total disability insurance on a guaranteed issue basis, and make protection available to players on and off the field. According to Scott Petersen, Petersen International’s resident expert of the professional athlete disability market, “This new guaranteed issue athlete DI plan, has allowed Petersen International to turn a longtime friendship with the NFLPA into the chance to provide their members with the strongest and most necessary of insurance benefits when considering the physically hazardous nature of the occupation.”

Speakers at Life Insurance Settlement Association 2014 Fall Conference point to improved market conditions 

Life settlements have become an accepted asset class among institutional investors and financial advisors, with a number of favorable market conditions setting the stage for sustained growth of the industry, according to speakers at the 2014 Annual Fall Life Settlement and Compliance Conference in Scottsdale, Ariz. The conference (“The Journey Ahead”) was hosted by the Life Insurance Settlement Association (LISA), which educates consumers and financial advisors about options for unlocking the hidden value in life insurance policies.

“The demographics of the U.S. favor the life settlements industry, as more baby boomers reach retirement age and discover their life insurance policies are valuable assets that can be tapped for cash benefit during their lifetimes,” said Alan Buerger, chairman of LISA. 

“What we’re seeing in the marketplace is that the conversation has shifted away from a debate about the pros and cons of life settlements as investments and settlements have now become an accepted asset class by investors and most financial advisors,” said John Dallas, chief executive officer of Berkshire Settlements, one of the conference speakers.

The life settlement market has rebounded from the downturn of 2007-2009 and is currently on an upswing. According to The Deal Pipeline, transactions in the secondary market grew to $2.57 billion in face value of policies sold last year, compared to $2.12 billion in 2012.

The keynote speaker for the conference was Jay Olshansky, Ph.D., professor at University of Illinois at Chicago’s School of Public Health. Dr. Olshansky walked attendees through some of his research into estimating the duration of life, which indicates that although advancements in science and medicine are extending the average life expectancy for Americans, it is unlikely to ever create conditions where Americans are routinely able to live 100 years or more.

“In spite of what you may read on magazine covers and newspaper headlines, the truth is that the timing of death in human beings has never really changed,” said Dr. Olshansky. “It’s certainly true that a larger number of people are living longer today than in the past – and that trend will continue – but life span itself is unlikely to change and we’re just not going to see a whole generation of Americans suddenly living to be 120 years old. We have fewer infant deaths than we did in the past, but in return we now have more people dying from cancer, heart disease and dementia in their 80s.”

Dr. Olshansky’s work is part of a body of research that is allowing academics and actuaries to more precisely model life expectancy among various population groups in the U.S. “There are more than 40 million Americans over the age of 75, and seniors in that age group own between $700-$800 billion worth of life insurance policies,” said Bayston. “Our research suggests that approximately 20 percent of those policies are potential candidates for settlement, which is obviously a huge potential market. The business fundamentals and market conditions are now in place for supporting steady and sustained growth in the life settlements industry.”

Aegon agrees to sell its Canadian life insurance business

Aegon has reached an agreement with Wilton Re to sell its Canadian operations for CAD 600 million (EUR 423 million). The net underlying earnings of Aegon’s Canadian operations were CAD 26 million over the trailing four quarters ending June 2014, while its shareholders’ equity excluding revaluation reserves on an IFRS basis amounted to CAD 1.8 billion at the end of June 2014. As a result, the sale price represents a multiple of 23 times net underlying earnings. The transaction is expected to result in a book loss of approximately CAD 1.2 billion (EUR 0.8 billion).

Aegon will earmark the proceeds of this transaction to further reduce outstanding debt through the redemption of the USD 500 million 4.625% senior bond, due December 2015. This is in addition to the already planned redemption of the EUR 500 million 4.125% senior bond, due December 2014. The combination of the divestment and the non-refinancing of the bond will improve Aegon’s return on equity by 40 basis points, while reducing net underlying earnings by less than 1%. It will also keep Aegon’s leverage ratio unchanged on a pro forma basis, while its fixed charge cover ratio will improve by 0.6 times.

The parties anticipate that the transaction will close in the first quarter of 2015, subject to regulatory approval.

2. Initiatives to help agents, brokers and consumers during PPACA’s open enrollment season

Guardian video series helps employees navigate benefit options 

As open enrollment season gets underway, employees begin the process of selecting their workplace benefits for 2015. Many are at risk of over or under insuring due to confusion and a lack of understanding of their coverage options. The Guardian Life Insurance Company of America® (Guardian) is launching an online video series on Guardian Anytime and YouTube that explains how to optimize your workplace benefits coverage to avoid coverage gaps and achieve your financial goals.

According to the 2014 Guardian Workplace Benefits Study SM, employers are shifting more costs and responsibilities to their employees at a time when these benefits are becoming more critical to the workers’ overall financial security and well-being. Forty-seven percent of employers surveyed planned to ask employees to bear a greater portion of the benefit cost, but only  22 percent said they felt “well prepared” to discuss the changing benefits environment. And only one in four employees said their company’s communications are very helpful in choosing what’s right for them. Guardian’s video series helps employers and their employees understand the various benefit options available so they can select the most appropriate coverage for their unique needs.

3. New or revamped products in the industry

Boston Partners awarded $320 million variable annuity mandate from Jackson

Boston Partners announced it has received a $320 million mandate from Jackson National Life Insurance Company (“Jackson”) for the new JNL/Boston Partners Global Long Short Equity Fund (the “Fund”).

Jackson has made the Fund available on its Elite Access variable annuity investment platform. Elite Access offers portfolio diversification through the use of traditional and alternative investment classes in a tax-efficient vehicle. “We are very pleased to partner with Jackson and to be featured on the company’s Elite Access platform,” said Jay Feeney, Co-CEO and Chief Investment Officer, Boston Partners.

The Fund will invest at least 40 percent of assets in undervalued international stocks, with the portfolio’s long positions ranging from 90 to 100 percent, and short positions of 30 to 60 percent. The portfolio will be comprised of over 200 stock positions spread across industries. 

New York Life’s deferred income annuity sales surpass $2B  

New York Life announced that its deferred income annuity, Guaranteed Future Income (GFI), has exceeded $2 billion in premiums since its July 2011 introduction. Twenty percent of GFI policyholders have contributed more than one premium payment, confirming that GFI helps satisfy pre-retirees’ desire to flexibly invest in their retirements early and over time.  

“As pre-retirees plan for retirements that may last 20, 30, or even 40 years, there is growing recognition of the value of a guaranteed, sustainable approach to income. One of the most efficient ways to do that is with a deferred income annuity. This sales milestone is a reflection of the fact that pre-retirees want guarantees and simplicity, and GFI delivers,” said David Cruz, senior managing director in charge of the company’s annuity products. “As sales continue to grow and other insurers enter this market, we expect to see an increasing proportion of pre-retirees — of which there are more than 45 million — seeking pension-like income, guaranteed by highly rated insurers.”

Phoenix launches Safe Harbor Term Life and Safe Harbor Term Life Express

The Phoenix Companies, Inc. (NYSE: PNX) announced it has added term life insurance to its product offerings, Phoenix Safe Harbor Term LifeSM and Phoenix Safe Harbor Term Life ExpressSM.  It also announced expansion into call center distribution through for Term Life Express, complementing its traditional distribution through independent marketing organizations (IMOs).

“Adding term life to our middle market insurance portfolio is an important step for Phoenix as we also launch a call center distribution capability,” said Thomas M. Buckingham, executive vice president, Product and Operations. “We expect the term offerings to contribute substantially to growth in our life insurance product line, and the combination of strong IMOs and call center distribution will help us achieve that goal.”

4. Important designations and key personnel moves in the industry

ACLI elects its 2015 chairman and board of directors

The American Council of Life Insurers (ACLI), whose member companies provide financial and retirement security to 75 million American families, elected its 2015 Chairman, officers and new members of the Board of Directors at its Annual Conference.

Elected as Chairman was Roger W. Crandall, Chairman, president and CEO of Massachusetts Mutual Life Insurance Company (MassMutual). Mr. Crandall will serve as Chairman for one year. He succeeds John D. Johns, Chairman, president and CEO of Protective Life Corporation, who will serve as ACLI Immediate Past Chairman.

ACLI also elected Deanna Mulligan, president and CEO of The Guardian Life Insurance Company of America, to its Chairman-Elect position. ACLI’s Chairman-Elect Designate post was awarded to Pete Schaefer, president and CEO of Hannover Life Reassurance Company of America. Mr. Schaefer will become ACLI Chairman in October 2016.

Serving on ACLI’s Board through 2017:

  • Thomas M. Marra, president & CEO, Symetra Life Insurance Company;
  • Ted Mathas, chairman, president & CEO, New York Life;
  • Thomas McInerney, president & CEO, Genworth Financial;
  • Mark Mullin, president & CEO, Transamerica Corporation;
  • Mark Pearson, chairman & CEO, AXA Equitable Life Insurance Company;
  • Steve Pelletier, executive vice president and COO, U.S. Businesses, Prudential Financial;
  • James Rousey, president, UTG, Inc.;
  • John Schlifske, chairman & CEO, The Northwestern Mutual Life Insurance Company;
  • William J. Wheeler, president, Americas Division, MetLife.

Serving on ACLI’s Board through 2016:

  • John F. Barrett, chairman, president & CEO, Western & Southern Financial Group;
  • Jerry D. Davis, chairman, president & CEO, National Farm Life Insurance Company;
  • Esfand Dinshaw, chairman & CEO, Sammons Financial Group;
  • Roger Ferguson, Jr., president & CEO, TIAA-CREF;
  • Joseph Monk, senior vice president, chief administrative officer, Life & VP, Health & Mutual Funds, State Farm Insurance Companies;
  • John S. Roberts, president & CEO, Assurant Employee Benefits;
  • J. Eric Smith, president & CEO, Swiss Re Americas;
  • Kirt A. Walker, president & COO, Nationwide Financial;
  • John R. Woerner, president, Insurance and Annuities, chief strategy officer, Ameriprise Financial, Inc.

Serving on ACLI’s Board through 2015:

  • Gary C. Bhojwani, chairman of the Board, Allianz Life Insurance Company of North America;
  • Brandon Carter, president, USAA Life Insurance Company;
  • Don Civgin, president & CEO, Allstate Financial;
  • Michael G. DeKoning, president & CEO, Munich American Reassurance Company;
  • Bradford L. Hewitt, president & CEO, Thrivent Financial for Lutherans;
  • Dennis L. Johnson, president & CEO, United Heritage Life Insurance Company;
  • Rodney O. Martin, chief executive officer, Voya Financial;
  • Sherry Martin, COO & VP, Policyholder Services, Life and Property/Casualty, Farm Bureau Life Insurance Company of Michigan;
  • Eileen C. McDonnell, chairman, president & CEO, The Penn Mutual Life Insurance Company.

LIMRA hires new head of its banking research unit

LIMRA announced it has hired Dr. Betty Moon to be the next managing director of Bank Insurance and Securities Research Associates (BISRA), a collaborative effort between the Bank Insurance and Securities Association (BISA) and LIMRA.

“Betty has a very impressive background, holding key executive roles in some of the most prominent banking institutions in the country, including Bank of America and PNC,” said Robert Kerzner, president and CEO of LIMRA, LOMA and LL Global. “She brings strong leadership, strategic perspective and solid industry relationships, which will be very valuable to BISRA as it continues to be the one reliable go-to source for research, performance metrics and executive summits.   I am pleased to have someone of Betty’s caliber joining our team.”

 Mark Williams joins Brokers International

Brokers International is pleased to announce that Mark Williams, former President of GamePlan Financial Marketing, LLC, has accepted a new position as Chief Sales Officer with Brokers International.

As part of the senior leadership team, Mark will help position Brokers International for continued growth and success. He will oversee the company’s sales, recruiting and marketing teams. Mark brings a wealth of industry experience along with an ongoing commitment to independent financial professionals to his new role.

“We are excited to see where Mark’s insight and leadership will take our company,” said William McCarty, president and CEO of Brokers International. Brokers International is one of the nation’s largest and longest-standing insurance marketing organizations.

5. Awards and recognitions in the industry and beyond

Colonial Life endorsed by international public sector association

The International Public Management Association for Human Resources (IPMA-HR) has chosen Colonial Life as its preferred voluntary benefits and solutions provider. Colonial Life is the only voluntary provider endorsed by the world’s leading public sector human resource organization, according to a press release.

“This partnership enables us to create a closer connection with human resources professionals in the government and educator markets,” said Carey Adamson, Colonial Life’s vice president, Public Sector Market Services. “We’ve worked successfully with IPMA-HR for several years, and now we’ll be able to develop stronger relationships with key decision-makers.”

IRI honors members of Congress for commitment to retirement security issues

The Insured Retirement Institute (IRI) honored Rep. Rush Holt (D-N.J.), Rep. Richard Neal (D-Mass.), and Rep. Patrick Tiberi (R-Ohio) as the 2014 recipients of the IRI Champions of Retirement Security Award during an event on Capitol Hill. The award is bestowed upon public policymakers who support and advance policies that enhance retirement security in the United States. Rep. Holt, who is retiring from Congress, was recognized as a legacy recipient of the award, acknowledging his untiring commitment to retirement security during his career in the House.

Rep. Holt was recognized for making retirement security a priority during his eight terms in the House. He has been a champion of the Lifetime Income Disclosure Act (H.R.2171), which he introduced in the House in May 2013. The IRI-supported legislation would help Americans make informed decisions regarding their retirement plan options by requiring plans to show participants how much lifetime income could be generated from their savings.

Rep. Neal has authored and supported numerous bills to enhance retirement security during his 25 years in Congress, such as sponsoring the Retirement Plan Simplification and Enhancement Act (H.R.2117) of May 2013. Among other provisions, the legislation supports expanding automatic enrollment in retirement plans and the automatic escalation of plan contributions.

Meanwhile, Rep. Tiberi has supported numerous pieces of retirement security legislation since he was first elected to the House in 2000. He was an original co-sponsor of the Comprehensive Retirement Security and Pension Reform Act of 2001, which increased contribution limits for 401(k) plans and individual retirement accounts.

Rupprecht receives National Award from Northwestern Mutual

Kurt Rupprecht, a Northwestern Mutual financial representative based in Washington, D.C., is receiving the company’s Emerald award based on an outstanding year of helping clients achieve financial security.

“We’re proud of financial professionals like Kurt whoare helping so many people in their community to achieve financial security,” said Northwestern Mutual President Greg Oberland. “Our 2014 Planning & Progress Study shows that ‘personal finances’ is one of the top two priorities for Americans in 2014, ahead of things like ‘spending time with family and friends’ and ‘career.’ Many are seeking out professionals like Kurt to develop distinct financial plans that stand the test of time.”

Northwestern Mutual recognized Rupprecht at its 134th Annual Meeting event in July, held in Milwaukee, Wis. Rupprecht joins an exclusive group of financial professionals across the country who have achieved this recognition.

Prudential Agent Emeritus Vinnie Hirsch celebrates 50th anniversary with company

Prudential Financial, Inc. (NYSE:PRU) announced that Vinnie Hirsch, an Agent Emeritus with the Prudential Insurance Company of America’s Central Jersey Agency celebrated 50 years with the company.

Hirsch, who followed in his father Vic’s footsteps, runs a private office, Vincent Hirsch Financial in Matawan, New Jersey where he provides insurance and other financial services to a diverse group of individuals and small business entrepreneurs throughout the state.

Hirsch recalls passionately watching his father’s career evolve and feeling excited about the possibility of helping people make sense of their financial circumstances and plan for their future. That ability to assist people is what brought Hirsch into the industry 50 years ago.

Hirsch is a proud lifetime member of the Million Dollar Roundtable, a prestigious association of the world’s leading life insurance and financial professionals. Hirsch has also won Prudential’s President’s citation award numerous times.

RGA named “Best Life Reinsurer” by the 2014 Reactions North America Awards

Reinsurance Group of America, Incorporated (NYSE: RGA) has been named “Best Life Reinsurer” by the 2014 Reactions North America Awards, which are adjudicated annually by a distinguished panel of insurance and reinsurance leaders and presented to leaders in the industry.

“This award recognizes RGA’s strength at leveraging our global reinsurance expertise to the benefit of clients, and providing them with outstanding services, innovative solutions and unique insights to help them address emerging market needs and challenges, and achieve their business goals,” said Anna Manning, executive vice president, head of U.S. and Latin/South American Markets, RGA. 


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