Senior Vice President
How many of these carriers can you remember and recall doing some business with:
- Executive Life
- Home Life
- Phoenix Mutual
- Metropolitan Life
- The New England
- Equitable Life
- Genworth – First Colony Life
- Lincoln Benefit
- Jefferson Pilot
- ING- Voya- Reliastar
- National Benefit Life
- Standard Security Life
Well, each of these carriers and many others have changed – either purchased, gone out of business, re-organized, demutualized and other items. This has not been a good trend in our business however it continues to steamroll, especially with the current trend of Private Equity firms purchasing either entire carriers or blocks of business. And you know what has happened to many of these “closed” blocks of business.
- Changes in crediting and dividend rates- in some older cases no dividends are being paid at all by some former major carriers.
- Increased costs of insurance and changes in which products a term policy may be converted to.
So far in 2021,$ 12.1 Billion has been spend by Private Equity firms to purchase Life and Annuity Carriers or blocks of business. In 2020, there were 191 Private Equity Purchases of these blocks of business, more than any other year and nobody can really tell us what will become of these books of business.
Even recently, KKR has purchased Global Atlantic, Blackstone has purchased Allstate and Apollo has purchased Voya Annuities it appears the end is not near.
So what does this mean to you and your clients ? It means that as an advisor, it is very important to review a client portfolio each year and where necessary and prudent, and diversity the Life Insurance Portfolio for a better selection of risk and cost factors.
While most carriers pay claims, the costs of staying with a stale carrier and product can be enormous.
With new regulations, low interest rates and higher than expected mortality, the days of GUL are almost over and new and more efficient products for the carriers and in some cases for the consumer include Whole Life, IUL with long term guarantees and Variable UL with Lifetime Guarantees.
When you mix and match these products to your client needs, it can make for a great sale and some additional protection for your clients- and this is why policy review and diversification are so important in todays marketplace.