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Life Health > Health Insurance > Your Practice

5 Questions for the New Earnings Season

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Next week, Brown & Brown Inc. and UnitedHealth Group Inc. will kick off a great new web-based audio show: the first-quarter earnings release season.

The chief executive officers, chief financial officers and other top-level executives will go on public conference calls with securities analysts to talk about their companies and the general economic environment.

— (Related on ThinkAdvisor: 2017 health, disability and LTCI planner)

Some people are getting excited about the new “Game of Thrones” season, but how can suspense about the fate of Jon Snow, who is not real, compared with suspense about the fate of life insurance companies, health insurance companies, annuity issuers and insurance distributors, which are real, and which have a direct effect on whether hundreds of millions of people will live in comfort or misery?

For “Game of Thrones” viewers, the driving question for the start of the new season will be, “What the heck is up with Jon Snow?”

For me, the key driving question going into the earnings conference call season is always this: Can I get my computer audio player and headphones working well enough, at the same time, that I can actually hear the conference call audio stream?

Here are five other questions:

1. When will the interest rate story turn? I’m a little bored with writing about the effects of low interest rates. I’m looking for any signs that interest rates have started to turn up enough to have any kind of effect on the companies I cover.

2. Have any of these top-level executives touched the Trump administration? If so, do the executives see marauders dismantling the Administrative State with sledgehammers; surgeons cutting out dead Administrative State flesh with regulatory scalpels; or regular officials just trying to do what they can to improve the federal bureaucracy and make it work a little better?

3. What do the life and health insurers think about the agents, brokers, financial advisors and other live humans who talk to the customers? Since I entered business reporting, in the late 1980s, companies have always made big announcements about how they would use computers, electronic kiosks, artificial intelligence or robots to reach consumers directly. A year or so later, if those companies survived, they generally followed up with announcements about efforts to build and nurture distribution networks based on live humans. I’m wondering if the pendulum will swing back again and I’ll see more insurers talking about their efforts to outsell the competition by upgrading live-human distribution networks.

4. Are the companies noticing the effects of the aging of the baby boomers on their sales and claims? The oldest baby boomers are turning 71 this year. It seems as if 65 is the new 55. To some extent, that’s insulated the country from the economic effects of the aging of the baby boomers. Eventually, however, the boomer shoe will drop. The oldest boomers will get very old. The world will change.

5. Are the companies noticing the effects of the aging of the baby boomers on their own efforts to operate? My theory is that many of the boomers who are still working, and especially those who have something to do with computers, invented critical jobs. In some cases, employer understanding of what the surviving boomer workers do may be so poor that the employers don’t even really understand what exactly those surviving boomer workers do, let alone what knowledge has to be transferred to keep the employer going. So one thing I’m listening for on earnings calls is any early signs of companies falling apart due to problems with boomer worker knowledge transfer.

— Read Aetna to stay out of individual health market in 2018 on ThinkAdvisor.


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