LIMRA, LOMA and LL Global President and CEO Bob Kerzner discusses industry predictions for 2012. Included in the podcast: How consumer sentiment, product trends and sales, and legislation and regulation will affect the industry, and how companies will change and adapt in the coming year.

Ark.-based marketing services company Acxiom recently surveyed more than 3,000 consumers about their perception of life insurance and how they approach shopping for it.

Milliman was engaged by the Society of Actuaries (SOA) to conduct research identifying laboratory tests that are not widely used in the life insurance industry but could have potential benefits for use in the life insurance underwriting process. This report presents the results of the research.

Industry leaders predicts what's ahead for sales and profits, structural change, information technology, customer service - and more.

There's a saying in professional sports: don't listen to the fans, or you'll be sitting with them. But that's not the case for insurers, for whom customer experience is the watchword.

The December 2011 issue of Gen Re's Risk Insights includes the following articles:

- Hitting the Customer Sweet Spot for Life
- Projecting Mortality Trends: Separating the Past from the Future
- Rate Increase Strategy and Anti-Selective Lapses in the U.S. Medicare Supplement Market: A Case Study
- Commission-Based Versus Fee-for-Advice Systems
- Inside Gen Re

Life insurers in the United States face a conundrum as they head into 2012—managing both capital and risk in an economically and politically uncertain year, while continuing to lay the groundwork for future growth. The uncertain economic climate, compounded by ongoing concerns over US debt, continues to put pressure on life insurer ratings and capital levels.

Consumer behavior and expectations, along with pressures to conduct business more efficiently, are making the shift toward mobile platforms more than just a fad.

Life expectancy takes on greater importance as Baby Boomers retire and we begin to realize the “risk” that a large group of long-lived beneficiaries may strain public and private retirement and medical plans.

The slides from this session covering life product trends & issues, (presented at the SOA 2011 Annual Meeting & Exhibit this past October), have been posted at the SOA website.

Earlier this year many state regulators began insisting that insurers proactively identify beneficiaries of life insurance policies by running the Social Security Death Master File against their policy records. No new regulations have been written yet, but insurers are coming to terms with a new mandate to examine policy data.

Aware of its successful use in the property/casualty field, more and more life insurers are employing analytics in their business decisions.

The Reinsurance Section, Smaller Insurance Company Section and the Committee on Life Insurance Research are pleased to make the following report available. Authored by W. Michael Reese of Hause Actuarial Solutions, this report examines challenges encountered by smaller insurers in obtaining life reinsurance, the challenges and opportunities life reinsurers face in servicing these companies, and considers some possible solutions that might help to resolve the challenges encountered.

This report presents the results of the Improving the New Business Process Survey conducted by the Society of Actuaries (SOA) Committee on Life Insurance Mortality and Underwriting Surveys.

I was a bit surprised when I checked out industry data from the Insurance Information Institute earlier this year that had pegged industry earnings for 2010, because for the first time that I can remember, life insurance became the smallest sector in this business. Annuities came in with nearly half of total industry revenue, health insurance came in at just over a quarter, and life insurance picked up the rest, as just under a quarter.

Predictive models and predictive analytics have recently begun to permeate the U.S. individual life insurance market.

Along with LIMRA, the LIFE Foundation recently released a new study, the Life Insurance Barometer Study. Our findings showed that Americans, especially younger Americans, prefer to buy life insurance via the Internet, mail or by phone. Although 64 percent of consumers are still buying life insurance from a professional, far fewer are doing so than in the past.

Total second-quarter 2011 sales of individual life insurance in the United States, measured by new annualized premium, rose just 1% from the same period a year ago as an increase in whole life sales overcame "stagnant" universal life and declining term life sales, says a senior analyst at LIMRA.

These leading annual industry benchmark surveys cover Group Term Life, Accidental Death & Dismemberment (AD&D), Short Term Disability (STD), and Long Term Disability (LTD) inforce and sales premium results for 2010. Thirty-two insurance carriers participated in the Life Survey, while 28 carriers participated in the Disability Survey.

A new A.M. Best Co. Statistical Study shows the face amount of life insurance policies issued during 2010 declined 3.1% to $2.87 trillion compared with a year earlier, according to the latest issue of BestWeek U.S./Canada. Term life on a business issued basis marked a steeper descent, falling 11.7% to $1.13 trillion. The five A.M. Best Statistical Studies featured in BestWeek looked at total life issued; ordinary life issued; term life issued; group life issued and credit life issued.

U.S. application activity for individually underwritten life insurance was off -2.6% in May year-over-year, all ages combined, according to the MIB Life Index℠. May’s downturn comes on the heels of two consecutive months of modest growth for the Life Index (+0.6% Mar. and +1.1 % Apr.).

While almost every term carrier offers term-to-perm conversion provisions, individual company strategies drive what is provided in these provisions. Some companies (particularly mutuals) use term as a “foot in the door” to gain clients, selling less expensive term products to young families and then encouraging (and expecting) those consumers to convert to permanent products later. Pricing and producer compensation often reflect this high conversion expectation.

The March 2011 issue of this Towers Watson quarterly newsletter presents:

• Industry Statistics
• Market Update
• Regulatory Update
• Distribution
• Products

European countries’ efforts to increase tax revenue may erode the tax advantages life products in those countries now enjoy.

Benjamin Serra and Tobias Moerschen, analysts in the European offices of Moody’s Investors Service, New York, come to that conclusion in a new comment on the competitiveness of traditional life products in Europe.

This Swiss Re report examines the private insurance pricing and risk selection process, risk selection and the regulatory environment, and evidence-based ratings and their application.

Presentations from various sessions at the SOA Life & Annuity Symposium held in May 2011 in New Orleans, LA.

U.S. application activity for individually underwritten life insurance turned positive in April, up +1.1% year-over-year, all ages combined, according to the MIB Life Index℠. April’s uptick is the second consecutive month of growth for the Index, and the first rise for the month of April in the last seven years.

This survey new sales and inforce premiums, volume, lives, and cases for Total Group Term Life (Basic and Voluntary), Voluntary Group Term Life and AD&D. In addition, data on lapse rates and renewals is provided for those companies that supplied information. Thirty-two companies participated in this year's survey.

Although the national and global economies still have the power to derail it, the financial health of the U.S. life and annuity sector is sound and should keep improving, a trio of A.M. Best ratings analysts said in an article in this week’s BestWeek U.S./Canada.

U.S. application activity for individually underwritten life insurance was up slightly in March, +0.6% year-over-year all ages combined, according to the MIB Life Index.

The Indian life insurance sector has grown to be the world’s 11th largest in just 10 years. A younger workforce, a rise in personal incomes, market competition and regulatory initiatives make this a market to watch.

A new type of simplified issue life insurance may enable agents to sell more life policies but it may also cause those agents to take a haircut in their compensation percentage.

U.S. application activity for individually underwritten life insurance declined -1.4% in February year-over-year, all ages combined, according to the MIB Life Index℠. February’s decline is the ninth consecutive month of losses for the U.S. Index.

The U.S. bank-owned life insurance (BOLI) asset total increased to about $140 billion at the end of the third quarter of 2010, up 4.8% from the total recorded a year earlier, according to Michael White Associates L.L.C.

U.S. application activity for individually underwritten life insurance declined -2.3% in January year-over-year, all ages combined, according to the MIB Life Index.

Competition and external factors such as product rating agencies can limit options for differentiation and growth. Looking beyond perceived market boundaries is important, as is close industry involvement in setting product standards.

More than $7 billion in transactions related to life insurance-linked securities (life ILS) were completed in 2010, and the market saw a number of additional life capital market transactions as well. Redundant reserve financings are likely to continue to drive the life ILS market in 2011. The move toward principles-based reserves, the introduction of term universal life products, and Iowa's new collateral regulations are other issues to watch in 2011.

Whole life insurance may be an old standby in insurance circles but it is no longer sitting on the sidelines of insurance promotions. It may even become a regularly brokered product.

A majority of U.S. insurance executives are predicting flat 2011 sales for individual and group life coverage.

LIMRA, Windsor, Conn., has published executive expectations data in a summary of results from a December 2010 survey of 70 industry participants.

Business-owned life insurance (BOLI) serves a number of legitimate purposes, including succession and estate planning. A big advantage of using life insurance is that the proceeds typically are tax free. But there have been abuses, particularly by large companies that purchased insurance on the lives of lower-level employees, often without their knowledge. Indignation over these so-called “janitor policies” led Congress to add Section 101(j) to the Internal Revenue Code (IRC) as part of the Pension Protection Act of 2006 (PPA).

New report says estate tax confusion and legacy systems are major challenges for the industry in the year ahead.

In an era of shifting demographics, economic unease and regulatory transformation, life insurers confront new risks.

As the life insurance industry moves towards a more principles-based environment, related terminology increasingly has different meanings for different constituents. In this article, Larry Moews identifies common misperceptions of economic capital and provides a more concise definition. In future publications of The Messenger, he will address more specific issues facing carriers as they move from theory to practice.

We all have a basic idea of what it means for experience data to be credible; that is, it must be reliable and predictive, but what makes one set of data more predictive than another? Or "how can we quantify our confidence in the ability of the experience to predict future claims?" Pricing actuaries use credibility formulas to determine the reliability of the data, but how do they settle on which formula to use? The answer is that there really is not just one right answer. Based on our observations of the Group Life industry and our own experience and research, this article will describe the most common approaches used today.

Swiss Re on what consumers really think about life insurance, about our industry, about our products.

The editors of Full Disclosure periodically survey life insurers active in upper markets across a wide range of product specifications, illustrations, guaranteed minimum premiums, and more. The second universal life release of 2010 features 114 policies including 82 fixed policies (up from 75 a year ago) and 32 indexed policies (up from 26 a year ago). This excerpt is for traditional products only, with one following next month for indexed varieties. In the 13 years Full Disclosure has been publishing universal life policy information, this is a record number of policies!

A.M. Best report says growth of new business in 2009 was strong compared to prior years, but challenges remain.

After years of declining, US term insurance prices increased by about 5-6% in 2009. Last October Swiss Re argued that these price increases were due to market pressures stemming from the financial crisis, which were aggravated by Regulation XXX’s requirement to hold reserves roughly twice what is economically necessary.

But have prices risen enough?

LIMRA survey says that 30% of U.S. households have no life insurance whatsoever.

Less-than-stellar financial figures from the United States, coupled with ongoing concerns over sovereign debt limits in Western Europe, helped to fuel real concern that debt contagion and a global double-dip recession might end in a sovereign debt default crisis.

While that is bad enough on its own, it poses a special risk for the life insurance industry, which has billions invested in non-U.S. sovereign risk.

Or does it?

Earlier this week, less-than-stellar financial figures from the United States, coupled with ongoing concerns over sovereign debt limits in Western Europe, helped to fuel real concern that debt contagion and a global double-dip recession might end in a sovereign debt default crisis.
While that is bad enough on its own, it poses a special risk for the life insurance industry, which has billions invested in non-U.S. sovereign risk.

Or does it?