CIA Annual MeetingCIA Annual Meeting
LOOKING BACK…focused on the futureLOOKING BACK…focused on the future
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
Actuaries in Distribution
Brigitte Breton
Pierre Vincent
Scott Sadler
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
An Actuary in DistributionAn Actuary in Distribution
Brigitte Breton, FSA
Insurance Salesman woman
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
Topics
• Career History
• Motivations
• Field/Market Observations
• Actuarial Advantages/Disadvantages
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
A little History…
School Insurance/Reinsurance Distribution
Product Development
Pricing/Marketing
12 yrs 4 yrs
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
Personal Motivations for Switching into Distribution
• 1.
Situation is different for women.
• 2. Time Flexibility Working less hours
• 3. Move to “La Belle Province”
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
Market Motivations for Switching into Distribution
1. Shrinking # of insurance companies (reduced number of employers for actuaries)
2. Increased Average Age of Distributors (above 50)
3. Increased need for knowledgeable insurance brokers
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
My “Path”…
1. Team up with a high end MGA (General Agency): packaging specific/individualized insurance concepts
Objective: “how” to sell
2. Acquire a block of business: Objective: “I” sell
3. All of the above and offer consulting services to MGAs:
Objective: “We” sell
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
Field Observations (Actuaries in Action)
• Actuaries add credibility to the selling process Good results with Accountants and Lawyers
• Need to define our area of expertise vs tax lawyers/accountants (some confusion exists)
• In front of clients, our technical knowledge may become a handicap we need to simplify
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
Actuary’s Challenge
• Summarize product while fully disclose all material factors/assumptions
KEEP IT SIMPLE!
• Need to be comfortable with the label “insurance salesman”
woman
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
Field Observations (Brokers in Action)
Two types of sales processTwo types of sales process
Go In Go In
Present One Concept Fact Finding
Sell or don’t sell Extensive Analysis
Get Out Sell or don’t sell
Get Out
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
Results
More Clients/ Less Clients/
Less Time Each More Time Each
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
Two types of Sales Brokers
Deal with 1 or Deal with
2 Companies Multiple companies
Go for Price
…but willing to switch model for a “good deal”…
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
“Good Deal” = Market Efficiency
Basic Sales process/behavior will remain unless a product premium or commission
is exceptionally outside the “level of comfort” (Mispriced? Loss Leader?)
MARKET EFFICIENCY
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
Field Observation (MGA in Action)
• Typical MGA is in their 60s
• Built a good business over the years (good service fees)
• Lonely Business (does not know how the others operate/what is good profits)
• Carry big potential liability
• Faced with succession planning
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
Sales Support at the MGA level
Why an Actuary?
• Support the Brokers (in sales situations)
• Support at the technical level (advanced concepts/conversion programs)
• Support the MGA at the management level
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
MGA ACTUARIAL SUPPORT
• Expense Management
• Risk Management (chargeback exposure)
• Overhead/Profitability Ratios
• Agent Behavioral Projections
• Agency Valuation (Succession Planning)
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
CONCLUSIONS
Actuaries in Sales YES
Actuaries bring Knowledge
Expertise
Credibility
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
CONCLUSIONS
Actuary’s basic training weak in the following:
• Communication (summarize, listen to client, keep it simple, selling techniques)
• Small business corporate taxation and challenges faced by shareholder/owner
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
CONCLUSION
Actuaries in sales can mean:
• Personal Sales• Assist other agents in complex cases• Assist MGA at the management level
(liability exposure, succession planning)
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
So, do you want to join the dark side…..?
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
From the Insurance Company’s From the Insurance Company’s Employee PerspectiveEmployee Perspective
Pierre Vincent
Transamerica Life Canada
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
Looking at the past…• 2 years - Life insurance valuation• 3 years - Product development & pricing
for US Group Pension• 11 years – Life Product Development &
Marketing• 2 years – Sales – Life insurance,
segregated funds & mutual funds
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
Observation
The independent distribution market is very efficient ...
If products have flaws, distributors and brokers will find them & market these
flaws
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
The Product Selection Process at the Distributor Level (MGA, Brokers)
• Companies launch products & promote strong features
• The Product Analysts at Distributors:• Review & compare product with competition• Prepare recommended list of products based on
competitive pricing & features• Take advantage of product flaws to propose best
solution to brokers and clients
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
Product Analysts at distributors will find quickly what the pricing actuaries should
have been concerned about…
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
Examples of market efficiency• Insurance on broker’s own life• Impact of legal rebating• Decreases in amount of insurance without
penalty to broker or client• Competitive pricing by age group• Long term GIC rates in UL• Segregated fund guarantees• Impact of NCPI• Back-to-back type concepts
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
Insurance on broker’s own life• A recent case … before the company changed its
commission rules• $2,500,000 of universal life with YRT cost of
insurance• $7,100 in premiums over a two year period• $20,347 in commission and bonus (tax free)• Net gain of $13,247• Two years of “free insurance”
Too good to be true…it was changed recently!
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
Insurance on broker’s own life• Buys $1,500,000 of universal life with YRT cost of
insurance• Pays $15,276 in premium • Insurance in force for three years• Receives $26,809 in commission and bonus (tax free)• Net gain of $11,533 • This is still available with quite a few insurance
companies in Canada today...
A good deal for the broker!
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
Impact of rebating • In Alberta, rebating of commission is legal• The client buys $1,500,000 insurance policy
with a premium of $15,276• The broker receives $26,809 in commission and
bonuses• The broker rebates $15,276 to the client• Gross income of $11,533 to the broker• The client gets two years of insurance for free
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
Insurance amount decreases without penalties• Same case we just reviewed
• $1,500,000 of insurance, $15,276 of premium, $26,809 of commission & bonus
• If insurance is decreased to $100,000 in the third year, the client gets 13 years of coverage for free…
• What is the profitability of paying commission on $1,500,000 when insurance will be reduced to $100,000 after 2 year?
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
Insurance amount decreases without penalties• Approach often used for tax free accumulation in life
insurance• Broker proposes to accumulate money tax free• $250,000 is deposited in the policy• $4,000,000 of insurance is required to accept this deposit• After 2 years, the insurance is reduced to $2,000,000• After 4 years, the insurance is then reduced to $1,000,000 • All the money accumulates on a tax deferred basis• The commissions paid are 3-4 times what should have
been paid• Who is making the money?
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
Competitive pricing by age group• The product analysts and brokers use
comparison software to determine the best price by age
• For simple products, production can shift significantly between companies
• Clients are usually well served by independent agents for this type of product
• Direct writers should price each age profitably
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
Segregated fund guarantees• Older clients with significantly reduced
life expectancy can invest in segregated funds with 100% death guarantees
• Stock brokers suggest to these clients and their family to invest a few millions in these funds.
• The price of these guarantees does not reflect this type of behavior
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
Long term GICs in Universal Life• Clients invest in long term GICs to earn
higher interest rate• Cost of insurance is deducted from this
GIC • Broker can offer clients long term GIC
rates on short term investments
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
Impact of NCPI• For clients above age 70, NCPI are different by
companies• If an individual borrows to invest and the bank
requires life insurance =>the lower of (NCPI, Insurance Premium) can be deducted from income tax
• Broker will look for the company with the highest NCPI to maximize the tax deductions
• If the policy is owned personally, brokers will look for the lowest NCPI to have the highest ACB possible
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
Back-to-back concept• Creative brokers have found that clients
70+ can be declined for insurance in Canada and accepted standard in the US
• These clients often qualify for rated life annuities in Canada
• These programs are sold to investors who get the equivalent of 15+% return before tax
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
Other proofs of efficiency of distribution• Lapses on T100• Lapses on Joint-last-to-die T100 policies• Popularity of return of premium options
on CI policies
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
Conclusion• With the increased popularity of independent
distributors, products selection is becoming very efficient
• Pricing / valuation actuaries should evaluate risks carefully
• They should be concerned with rapid sales increase• It can be very expensive to wait until the experience study
• Pricing actuaries should talk often to product analysts to understand how their products are sold
• Good understanding of key drivers in certain markets can be very profitable for insurance companies Actuaries in sales – should they take advantage of
product flaws to maximize sales results?
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
From a Distributor From a Distributor PerspectivePerspective
Scott Sadler
PAL Insurance Services Limited
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
• Actuaries have gone over to the dark side.
Find out the real dirt on the sales process.
Are agents worth all that cost?
• Actuaries have gone over to the dark side.
Find out the real dirt on the sales process.
Are agents worth all that cost?
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
• The Sales Process at Pal Insurance
• Fact Find / Needs Analysis• Integration with existing structures• Strategy Inventory• Program architecture• Implementation• Servicing
• The Sales Process at Pal Insurance
• Fact Find / Needs Analysis• Integration with existing structures• Strategy Inventory• Program architecture• Implementation• Servicing
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
• Fact Find• Client details (DoB, smoking status,
etc.)• Asset ownership• Corporate structure• Tax liability
• Limited actuarial involvement
• Fact Find• Client details (DoB, smoking status,
etc.)• Asset ownership• Corporate structure• Tax liability
• Limited actuarial involvement
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
• Integration with existing structures• Working with the client and their
“other” advisors (tax, legal, etc.) • Understand what planning has already
been done• Building a consensus for the role life
insurance can play• Educating the decision makers as to the
types of life insurance in the market• Actuaries enhance the credibility of the
process
• Integration with existing structures• Working with the client and their
“other” advisors (tax, legal, etc.) • Understand what planning has already
been done• Building a consensus for the role life
insurance can play• Educating the decision makers as to the
types of life insurance in the market• Actuaries enhance the credibility of the
process
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
• Actuarial Issues• Participants focus on their area of
expertise • Educating the decision makers in
language they understand• Advanced tax planning teams
established by some insurance companies
• Actuarial Issues• Participants focus on their area of
expertise • Educating the decision makers in
language they understand• Advanced tax planning teams
established by some insurance companies
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
• Strategy inventory• Insurance is one solution, there are
others• Insurance is not “free”• Work with other advisors to
document cost / benefit analysis of the options
• Strategy inventory• Insurance is one solution, there are
others• Insurance is not “free”• Work with other advisors to
document cost / benefit analysis of the options
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
• Actuarial Issues• Insurance is not for traditional
income replacement purposes• Financial underwriting as well as
medical• Ownership / beneficiary designations• Does historical lapse experience
apply?• Whose pricing mortality do you use,
direct writers or reinsurers?
• Actuarial Issues• Insurance is not for traditional
income replacement purposes• Financial underwriting as well as
medical• Ownership / beneficiary designations• Does historical lapse experience
apply?• Whose pricing mortality do you use,
direct writers or reinsurers?
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
• Strategy Inventory - an ExampleMNS 45 standard risk• $25M capital gain on death• $11.25M tax bill (45% tax rate)• Options to pay the tax include:
• Sinking fund to accumulate needed $• Borrow funds at death• Sell part of the company• Insurance to pay tax• Charitable gift to eliminate tax
• Strategy Inventory - an ExampleMNS 45 standard risk• $25M capital gain on death• $11.25M tax bill (45% tax rate)• Options to pay the tax include:
• Sinking fund to accumulate needed $• Borrow funds at death• Sell part of the company• Insurance to pay tax• Charitable gift to eliminate tax
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
• Sinking Fund• Deposits for 10 years• 5% pre-tax rate of return • 45% annual tax on investment earnings• Target accumulation at attained age 85• Annual deposit = $428K• Assumes
• Death at life expectancy
• Sinking Fund• Deposits for 10 years• 5% pre-tax rate of return • 45% annual tax on investment earnings• Target accumulation at attained age 85• Annual deposit = $428K• Assumes
• Death at life expectancy
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
• Borrow funds at death• Amortize over 10 years• 6% interest rate • Annual Payment = $1.4M • Assumes
• Company is able to borrow money when needed
• Company is able to repay money when it is borrowed
• Borrow funds at death• Amortize over 10 years• 6% interest rate • Annual Payment = $1.4M • Assumes
• Company is able to borrow money when needed
• Company is able to repay money when it is borrowed
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
• Sell part of the company• Cost = $11.25M• Assumes
• There is a market for the stock• Share price can withstand the sell-off
• Sell part of the company• Cost = $11.25M• Assumes
• There is a market for the stock• Share price can withstand the sell-off
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
• Life Insurance Solution• Choices include
• Advisor • Company• Product
• Assumes• Applicant can pass underwriting
• Life Insurance Solution• Choices include
• Advisor • Company• Product
• Assumes• Applicant can pass underwriting
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
• Plan Design• How much coverage?
• $11.25M to pay the tax• $25M to eliminate the tax
• How long do they need coverage?
• How will they pay for coverage?
• Plan Design• How much coverage?
• $11.25M to pay the tax• $25M to eliminate the tax
• How long do they need coverage?
• How will they pay for coverage?
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
• Plan Design10 Year Term Insurance
• Lower initial rates• Renewal features vary by company• Conversion options vary by company• No CSV, no exit strategy
• Plan Design10 Year Term Insurance
• Lower initial rates• Renewal features vary by company• Conversion options vary by company• No CSV, no exit strategy
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
Company A Company B Company C Company D
Age 45 $14,587 $14,665 $15,002 $15,140
Age 55 $92,325 $74,852 $76,765 $87,702
Age 65 $232,500 $212,440 $217,840 $254,427
Age 75 $612,040 $627,677 $623,315
Convertible to 70 N/A 65 65
Renewable to 75 85 85 80
Total payment $3.4M $9.1M $9.3M $6.6M
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
• Plan DesignPermanent Insurance• Term to 100
• Level premium • Cash Value features vary by company
• Minimum Funded Level COI UL• Level premium • Ability to pre-fund future charges
• Plan DesignPermanent Insurance• Term to 100
• Level premium • Cash Value features vary by company
• Minimum Funded Level COI UL• Level premium • Ability to pre-fund future charges
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
• Permanent Insurance Options• Term to 100
• $77K annual premium
• Minimum Funded Level COI UL• $85K minimum premium
• Same Company • Is the ability to increase funding at
some future time “worth” $8K annually?
• Permanent Insurance Options• Term to 100
• $77K annual premium
• Minimum Funded Level COI UL• $85K minimum premium
• Same Company • Is the ability to increase funding at
some future time “worth” $8K annually?
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
• Plan DesignPermanent Insurance, with CSV
• Maximum Funded UL• $446K premium for 10 years• “self-funding” thereafter• 3.5% interest assumption
• Participating Life• 20 Pay, high early CSV plan design• $446K premium for 10 years• “Self-funding” thereafter• Current dividend scale
• Plan DesignPermanent Insurance, with CSV
• Maximum Funded UL• $446K premium for 10 years• “self-funding” thereafter• 3.5% interest assumption
• Participating Life• 20 Pay, high early CSV plan design• $446K premium for 10 years• “Self-funding” thereafter• Current dividend scale
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
UL Par
Death Benefit
Age 55
Age 65
Age 75
Age 85
$ 16.7M
$ 17.2M
$ 20.0M
$ 25.0M
$ 17.1M
$ 14.0M
$ 20.3M
$ 28.5M
Cash Value
Age 55
Age 65
Age 75
Age 85
$ 4.4M
$ 5.9M
$ 8.8M
$ 13.7M
$ 4.5M
$ 8.3M
$ 14.2M
$ 23.1M
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
• Actuarial issues• Investment options on UL product• Guaranteed minimum GIA rates
eg: 90% GoC rate - MER• Reliability of bonus interest feature
• Sustainability of dividend scale
• Actuarial issues• Investment options on UL product• Guaranteed minimum GIA rates
eg: 90% GoC rate - MER• Reliability of bonus interest feature
• Sustainability of dividend scale
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
• Actuarial issues• Guaranteed increases tied to tax liability• Return of premium feature• Reinsurance capacity
InitialUltimate
• Are there embedded options that are valuable to the client?
• Are there features that add cost that are of little value to the client?
• Actuarial issues• Guaranteed increases tied to tax liability• Return of premium feature• Reinsurance capacity
InitialUltimate
• Are there embedded options that are valuable to the client?
• Are there features that add cost that are of little value to the client?
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
• Implementation• Review of facts• Summary of Planning Process• Summary of existing structures• Review of Cost / benefit analysis
• Ask for the cheque
• Implementation• Review of facts• Summary of Planning Process• Summary of existing structures• Review of Cost / benefit analysis
• Ask for the cheque
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
• Actuarial issues• “Not Taken” rates increase with
travel time from fact find to offer • Lowest price doesn’t always “win”• KISS principle
• Actuarial issues• “Not Taken” rates increase with
travel time from fact find to offer • Lowest price doesn’t always “win”• KISS principle
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
• Servicing – term plans• Update of facts• Market survey• Conversion opportunity
• Servicing – term plans• Update of facts• Market survey• Conversion opportunity
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
• Actuarial Issues• Anti-selective lapses• When does your term product
break-even?• Does conversion rate vary by face
amount?• Are conversion costs accurately
reflected in pricing?
• Actuarial Issues• Anti-selective lapses• When does your term product
break-even?• Does conversion rate vary by face
amount?• Are conversion costs accurately
reflected in pricing?
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
• Servicing – permanent plans• Update of facts• Update of policy values vs
illustration• Variance analysis• Review of asset allocation for UL
plans
• Servicing – permanent plans• Update of facts• Update of policy values vs
illustration• Variance analysis• Review of asset allocation for UL
plans
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
• Actuarial Issues• Mortality, lapse rates vary with face
amount• Does source of earnings analysis
reflect policy size?
• Actuarial Issues• Mortality, lapse rates vary with face
amount• Does source of earnings analysis
reflect policy size?
CIA Annual Meeting Session 2104 – CIA Annual Meeting Session 2104 – Actuaries in DistributionActuaries in Distribution
• The Sales Process at Pal Insurance
• Fact Find / Needs Analysis• Integration with existing structures• Strategy Inventory• Program architecture• Implementation• Servicing
• The Sales Process at Pal Insurance
• Fact Find / Needs Analysis• Integration with existing structures• Strategy Inventory• Program architecture• Implementation• Servicing
CIA Annual MeetingCIA Annual Meeting
LOOKING BACK…focused on the futureLOOKING BACK…focused on the future