the large case life cycle… with a life of its own 2016 - breakout 10 - large... · • total life...
TRANSCRIPT
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The Large Case Life Cycle…With a Life of Its Own
Graham Carter – President and CEO, CAP Advisors
Selena Puttick – AVP and Associate Chief Underwriter Retail & Affinity Markets, Manulife Maureen Davis – AVP, Individual Life Underwriting Operations, Munich Re
April 13, 2016
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The Large Case Life Cycle…
1. What is a large case?
2. Statistics: Life Cycle and Placement
3. Advisor, Direct Writer, Reinsurer
4. Insured: why and how?
5. Questions for the future
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Large Cases Defined…
The Reinsurer
• Face amount of $10,000,000+ with no other insurance inforce or pending applications or total line exceeding $10 million
The Direct Writer
• Large Life Case Face Amount >= $5,000,000 or >= $25,000 premium
• Premier Case Face Amount >=$10,000,000 or >=$500,000 in the first 5 policy years
The Advisor
• 3 glasses of wine vs 1
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The Large Case Life Cycle…
Munich Re’s 2014 Individual Insurance Survey – Individual Life 2011 2012 2013
Number of policies placed 340 314 300
Total premium for policies placed (000,000s) $81.5 $96.4 $58.5
Average premium for policies placed (000s) $139.6 $307.0 $195.1
% of large case NB* policies over total 0.05% 0.05% 0.05%
% of large case NB* premiums over total 6.2% 7.5% 4.6% Large case = policies with face amount ≥ $10 million. *NB = new business
The Reinsurer
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The Large Case Life Cycle…
Munich Re’s 2014 Individual Insurance Survey – Placement for large cases
• 49% compared to 77% for the total individual Life market
• When including policies placed with face amounts greater than $5 million in the large case segment, these policies represented 8.9% of new business premiums and 0.18% of policies placed
The Reinsurer
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The Large Case Life Cycle…
Munich Re’s 2014 Individual Insurance Survey – Facultative reinsurance
• Just over 60% of companies surveyed provided submitted and placed statistics:
• The $1,000,000 to $4,999,999 face amount band had the most business representing 36% of placed facultative business by face amount and 17% of placed facultative cases by count
• This band also had the best placement rate – 58% of cases and 64% of face amount were placed
The Reinsurer
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Munich Re’s 2014 Individual Insurance Survey
The Reinsurer
2013 Individual Life Placement Time
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Munich Re’s 2014 Individual Insurance Survey
2013 Individual Life New Business Placement Breakdown
The Reinsurer
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Munich Re’s 2015 Individual Insurance Dashboard
The Reinsurer
2014 Individual Life New Business Placement Breakdown
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Policies Sold – 2015 Insured Face Amount
Male 47 $5,000,000
Male & Female, Age 49, J&L $20,000,000
Male 57 $2,000,000
Female 54 $2,000,000
Female 22 $200,000
Female 20 $200,000
Female 18 $200,000
Female 53 $11,000,000
Female 60 $11,000,000
Female 57 $11,000,000
Male 44 $1,500,00
Male 44 $500,00
Male 50 $1,000,000
Male 66 $600,000
Female 40 $30,000,000
Male 56 $25,000,000
Male 56 $31,000,000
Total $152,200,000
The Advisor
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Policies Sold – 2015 Insured Face Amount Product
Male 47 $5,000,000 UL
Male & Female, Age 49, J&L $20,000,000 Whole Life
Male 57 $2,000,000 Term 10
Female 54 $2,000,000 Whole Life
Female 22 $200,000 Whole Life
Female 20 $200,000 Whole Life
Female 18 $200,000 Whole Life
Female 53 $11,000,000 Whole Life
Female 60 $11,000,000 Whole Life
Female 57 $11,000,000 Whole Life
Male 44 $1,500,00 Term 10
Male 44 $500,00 Term 10
Male 50 $1,000,000 Term10
Male 66 $600,000 UL
Female 40 $30,000,000 Term 10
Male 56 $25,000,000 UL
Male 56 $31,000,000 UL
Total $152,200,000
The Advisor
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Policies Sold – 2015 Insured Face Amount Product Annual Premium
Male 47 $5,000,000 UL $235,631
Male & Female, Age 49, J&L $20,000,000 Whole Life $427,296
Male 57 $2,000,000 Term 10 $6,612
Female 54 $2,000,000 Whole Life $76,995
Female 22 $200,000 Whole Life $2,417
Female 20 $200,000 Whole Life $2,267
Female 18 $200,000 Whole Life $2,199
Female 53 $11,000,000 Whole Life $723,835
Female 60 $11,000,000 Whole Life $841,645
Female 57 $11,000,000 Whole Life $794,125
Male 44 $1,500,00 Term 10 $1,278
Male 44 $500,00 Term 10 $501
Male 50 $1,000,000 Term10 $1,678
Male 66 $600,000 UL $19,740
Female 40 $30,000,000 Term 10 $14,030
Male 56 $25,000,000 UL $409,531
Male 56 $31,000,000 UL $507,820
Total $152,200,000 $4,067,599
The Advisor
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Policies Sold – 2015 Insured Face Amount Product Annual Premium Sales Credits
Male 47 $5,000,000 UL $235,631 38,365
Male & Female, Age 49, J&L $20,000,000 Whole Life $427,296 197,818
Male 57 $2,000,000 Term 10 $6,612 1,858
Female 54 $2,000,000 Whole Life $76,995 38,498
Female 22 $200,000 Whole Life $2,417 1,209
Female 20 $200,000 Whole Life $2,267 1,134
Female 18 $200,000 Whole Life $2,199 1,100
Female 53 $11,000,000 Whole Life $723,835 201,474
Female 60 $11,000,000 Whole Life $841,645 249,339
Female 57 $11,000,000 Whole Life $794,125 231,246
Male 44 $1,500,00 Term 10 $1,278 511
Male 44 $500,00 Term 10 $501 200
Male 50 $1,000,000 Term10 $1,678 671
Male 66 $600,000 UL $19,740 11,469
Female 40 $30,000,000 Term 10 $14,030 5,612
Male 56 $25,000,000 UL $409,531 204,765
Male 56 $31,000,000 UL $507,820 253,910
Total $152,200,000 $4,067,599 1,439,177
The Advisor
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CAP Advisors Life Book
• Total Life policies 450
The Advisor
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CAP Advisors Life Book
• Total Life policies 450
• Total face amount $990,000,000
The Advisor
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CAP Advisors Life Book
• Total Life policies 450
• Total face amount $990,000,000
• Total cash value $71,000,000
The Advisor
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CAP Advisors Life Book
• Total Life policies 450
• Total face amount $990,000,000
• Total cash value $71,000,000
• Policies > $5M 51
The Advisor
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CAP Advisors Life Book
• Total Life policies 450
• Total face amount $990,000,000
• Total cash value $71,000,000
• Policies > $5M 51
• Policies > $10M 24
The Advisor
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CAP Advisors Life Book
• Total Life policies 450
• Total face amount $990,000,000
• Total cash value $71,000,000
• Policies > $5M 51
• Policies > $10M 24
• Largest policy $75M
The Advisor
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CAP Advisors Life Book
• Total Life policies 450
• Total face amount $990,000,000
• Total cash value $71,000,000
• Policies > $5M 51
• Policies > $10M 24
• Largest policy $75M
• Highest coverage $125M (2)
The Advisor
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The Large Case Life Cycle…
• What’s the big deal anyway? • Special attention and support • Speed vs creativity • Competing and/or Collaborating • Negotiation • Privacy and confidentiality, important for everyone • Setting expectations • 3rd party requirements and relationships • It generally isn’t one and done… • Cases under attack…keeping them close
The Direct Writer
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…A Life of Its Own
What’s key?
• Who owns the file?
• Face Amount
• Total Line
• Reinsurance Treaties, Capacity and Jumbo Limitations, Retention management
• Relationships, Communication/Organization, Expertise – Advisor, Underwriters, Pricing, Marketing
• Knowledge, Products, Sales Concepts • Time • Changes, Rates, Quotes
The
Reinsurer
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What About the Future?
1. Large Cases Past, Present and Future? • What would a new “innovative” product or platform look like?
2. How do the MTAR changes impact the: • sales and marketing approaches? • product?
3. What’s the immediate MTAR impact on sales, staff, MGA, Underwriting and change areas?
The Advisor
The Reinsurer
The Direct Writer
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What About the Future?
4. How does an advisor choose a carrier? Technology, price, capacity, historical relationship?
5. In the ultra-high case market, how much shopping is there?
6. Market capacity – could there be an argument for streamlining the process of ‘reserving facilities’ such that insurers could book capacity, for example, with the use of a “calculator”?
The Advisor
The Reinsurer
The Direct Writer
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Any Questions?