Right place, right time: group health insurers are proving to be strong competitors in group life business.Major medical insurers have been quietly increasing their group life business, and many have been steadily climbing the market-share ladder. "It makes sense. It's it's 1. Contraction of it is. 2. Contraction of it has. See Usage Note at its. it's it is or it has it's be ~have the same marketing arena," said Edward Edward killed his father at his mother’s instigation. [Br. Balladry: Edward in Benét, 302] See : Patricide E. Graves, professor of insurance at the American College American College is the name of:
While selling group Selling Group All financial institutions involved in selling or marketing a new issue of debt or equity but not necessarily participating in the underwriting consortium. Notes: life allows health insurers to diversify diversify To acquire a variety of assets that do not tend to change in value at the same time. To diversify a securities portfolio is to purchase different types of securities in different companies in unrelated industries. their business and improve their retention, they have to be careful not to underprice un·der·price tr.v. un·der·priced, un·der·pric·ing, un·der·pric·es 1. To price lower than the real, normal, or appropriate value. 2. the business, or gains in market share will hurt their bottom lines. Also, it's becoming more difficult to sell more than one product, as the employer's decision-making decision-making, n the process of coming to a conclusion or making a judgment. decision-making, evidence-based, n a type of informal decision-making that combines clinical expertise, patient concerns, and evidence gathered from process has become more complicated, plus some employers--and brokers--resist having all their eggs in one basket. Open the Door Perhaps health insurers have been taking cues from group disability writers, who also have been strong group life writers. UnumProvident, the largest writer of group disability products, has been the second largest writer--behind MetLife Inc.--of group life issued for a number of years. "We're we're Contraction of we are. we're we are known primarily in the industry as a group disability, provider. We have good relationships with benefit managers and accounting managers, and we get consistently high reviews," said Neiciee Durrence, vice president of life products for UnumProvident. "That allows us to open the door with our lead product, group disability, and then also introduce our life portfolio, which includes traditional group life offerings as well as individual voluntary coverage." Once a salesperson--for either disability or health insurance--has gained the attention of a company's benefit manager, it's easier to sell additional products. UnumProvident has seen the increased competition in recent years from the major medical companies, she said. "Obviously, any time you have new lines of distribution or new entrants into the marketplace, I think it's a challenge for carriers. If you line up all the benefits that an employer would make available, medical is at the top, and that's the one they focus on first before any other," Durrence said. Second-Tier Growth Life insurance and financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. companies still have a strong showing among the top 10 writers of group life insurance by premiums, said Anita Potter A potter is someone who makes pottery. Potter may also refer to: People
While Limra doesn't rank the top 10 companies individually by premium, those top 10 companies are responsible for 77% of the market for the third quarter of 2004 .The top companies in the Limra study include large financial services companies, such as Hartford Life, MetLife, New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Life, Prudential Prudential is the name of two different companies and buildings named after them: Companies:
Illinois, river, 273 mi (439 km) long, formed by the confluence of the Des Plaines and Kankakee rivers, NE Ill., and flowing SW to the Mississippi at Grafton, Ill. It is an important commercial and recreational waterway. and Texas. That the health-care companies are growing their group life business is a sign that they're in the right place at the right time when it comes to sales, said Robert Hartwig, chief economist The Chief Economist is a single position job class having primary responsibility for the development, coordination, and production of economic and financial analysis. It is distinguished from the other economist positions by the broader scope of responsibility encompassing the with the Insurance Information Institute. "It's capitalizing on the distribution channel," Hartwig said. "But every company has its own story on how it got there." For instance, some large predominately life and financial services companies, such as MetLife and Pru, were once also active in the health-care business. What's new is the pace at which some of the smaller companies are growing their group life business. (See "Competition Heats Up" below.) "We are probably going to see some of the midsized health plans and maybe some regional plans looking to ramp up Ramp Up To increase a company's operations in anticipation of increased demand. Notes: A company might 'ramp up' operations if they just signed a contract creating substantially more demand for their product. See also: Demand, Economies of Scale or start a product line in the group life area to avoid being at a competitive disadvantage," said Tim Gustafson, a principal with Deloitte Consulting. The New Favorite Child In the past, some health insurers have treated their auxiliary auxiliary In grammar, a verb that is subordinate to the main lexical verb in a clause. Auxiliaries can convey distinctions of tense, aspect, mood, person, and number. products, such as group life, disability and dental insurance Dental insurance is insurance designed to pay the costs associated with dental care. Dental insurance pays a portion of the bills from dentists, hospitals, and other providers of dental services. , as "stepchildren," Potter of Limra said. "They hadn't put a lot of emphasis on it. But now they realize if they do emphasize these lines, they can cross-sell," she said. Aetna made a conscious decision to grow its group life book, both in conjunction with its health business as well as a stand-alone product, said Peter Cook, head of group insurance sales for Aetna. "One of the things we did was to put more reps on the ground in places that we were not in before, and especially in areas where we did not have a significant medical presence," Cook said. "As an example, we put people in Minnesota. Aetna has a very limited presence (in health insurance there), but it's a great place for group insurance, group life and disability. Not all of the business is tied to health." Aetna also concentrated on cross-selling group products in conjunction with its health insurance, Cook said. In 2002, the total new sales for Actna's group life and disability," business was $159 million, and the company raised the goal for 2004 to $325 million, Cook said. "We put our goal out there to show people how serious we were," Cook said. The company fell a little short of reaching the goal, but did get some $300 million in new premium. WellPoint Inc., which recently merged with Anthem anthem [ultimately from antiphon], short nonliturgical choral composition used in Protestant services, usually accompanied and having an English text. The term is used in a broader sense for "national anthems" and for the Latin motets still used occasionally in Inc., believes its specialty products--such as group life, disability, vision and dental insurance--"are a tremendous source of revenue and an untapped source of revenue," said Louise McCrary, senior vice president of specialty products for WellPohat. "Medical companies have figured it out. We know we have to deepen deep·en tr. & intr.v. deep·ened, deep·en·ing, deep·ens To make or become deep or deeper. deepen Verb to make or become deeper or more intense Verb 1. our relationships with clients. They want to provide a full benefit package for their employees. We should have an advantage, because we can provide them that same administrative ease, and provide them the same product that they could get from a Met or a Pru," McCrary said. One-Stop Shop One-Stop Shop A company or a location that offers a multitude of services to a client or a customer. The idea is to provide convenient and efficient service and also to create the opportunity for the company to sell more products to clients and customers. Health-care companies are interested in growing their auxiliary products, such as group life and disability, for many reasons, Gustafson said. "Health plans are looking to diversify a bit," Gustafson said. "They can increase their profits by offering a wider variety of products through diversification Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. ." Due to medical cost inflation, health premiums have been rapidly growing. Health insurance premiums rose 11.2% in 2004 and 13.9% in 2003, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the Kaiser Family Foundation The Henry J. Kaiser Family Foundation (KFF), or just Kaiser Family Foundation, is a U.S.-based non-profit, private operating foundation headquartered in Menlo Park, California. . From 2000 to 2004, premiums for family coverage increased by an average of 59%, while inflation grew just 9.7% and average wages increased 12.3%. Group life premiums, on the other hand, are much more stable, Gustafson said. Cross-selling more than one product also improves customer retention for health insurers, he said. "The more products they have at an employer client, the more likely they are to retain that customer," Gustafson said. The health-care insurance industry usually experiences an 80% annual persistency rate. So in any given year, a company may lose 20% of its clients. Having multiple products with each client makes them less likely to switch carriers, he said. "Most customers like one-stop shopping," Gustafson said. McCrary, of WellPoint, pointed to a 2003 Limra study which found that three out of four employers said they'd like to consolidate the number of coverages they have with a carrier. "Employers don't want to deal with a different bill for life, dental, vision or disability," McCraW said. "Medical premium is the dog. That's the big piece that employers are spending their money on. If you can get the medical representative to present the specialty, products, and they are as good as the [specialty carrier] products, they will win." She added if WellPoint sells one specialty, product to an employer, they're much more likely to sell others along with it. Plus, a health carrier is able to offer added benefits that traditional life insurers cannot, she said. "We have an employee assistance business that we've wrapped around a life product to provide bereavement Bereavement Definition Bereavement refers to the period of mourning and grief following the death of a beloved person or animal. The English word bereavement counseling," McCrary said. "We're not just selling life insurance. We don't just send you a check; you have access to a licensed counselor to help you through a difficult time emotionally, not just financially. It doesn't cost us any more; it's just something we do." Also, health carriers can have some administration savings by offering group life products in conjunction with their group health products, Gustafson said. In fact, coordinating employee benefits through a health carrier "is the Holy Grail Holy Grail: see Grail, Holy. A very desired object or outcome that borders on a sacred quest. There are several Holy Grails in the computer business. ," McCrary said. "It's the value added Value Added The enhancement a company gives its product or service before offering the product to customers. Notes: This can either increase the products price or value. when you put it all together. The integrated product covers medical, disability, behavioral health Behavioral health was first used in the 1980's to name the combination of the fields mental health and substance abuse. As an example, an organization serving both mental health and substance abuse clients might refer to its practice as behavioral health or , disease management, dental and vision. The health plan can connect all those coverages so for the employee, it is seamless. I really believe health plans are in the best position to do that. Life companies or disability companies have to partner with others, because they don't provide the medical." Not an Easy Road But cross-selling isn't always an easy" thing for health insurers, or other companies, to do, said Potter of Limra. "The decision-making process with the employer is changing," Potter said. "It used to be the benefit manager or H.R. manager had the decision. Now it's going up to the chief financial officer, because the costs keep going up. More people are involved in making that decision. It's definitely more difficult to sell in this environment." Also, some brokers--and employers--are pushing back, resisting the "one-stop shop" concept. "One of the stumbling blocks stum·bling block n. An obstacle or impediment. stumbling block Noun any obstacle that prevents something from taking place or progressing Noun 1. to cross-selling is the employer itself," Potter said. If employers have to move their medical coverage, they don't want to also relocate re·lo·cate v. re·lo·cat·ed, re·lo·cat·ing, re·lo·cates v.tr. To move to or establish in a new place: relocated the business. v.intr. other lines of coverage, she said. Plus brokers don't want to place all of their business with a single carrier, for fear of losing all of the business should the employer decide to jump ship. In the national market, those smaller health carriers aren't really a threat to the bigger players, she said. "They don't really bump into bump v. bumped, bump·ing, bumps v.tr. 1. To strike or collide with. 2. To cause to knock against an obstacle. 3. a. each other much," Potter said. In local and regional markets, however, life carriers owned by a regional company, such as a Blue Cross Blue Shield company, can be quite competitive. "There's some competition in the local market, but pricing and servicing areas are going to be heavy barriers to overcome," she said. And getting the price right can be a challenge. Companies that pursue new business too aggressively for a year or two often end up struggling with profitability issues as they work to digest the new business. "We've really tried to manage profitable growth vs. purely sales," said Durfence of UnumProvident. Aetna is pleased to have grown the business, but has no plans to become the No. 1 writer of group life insurance, Cook said. "The price of that would be too high," Cook said. "I'm the head of sales, but as an officer of the company, my objectives are top and bottom line growth. It would be great on the sales side to get ahead of MetLife, but the cost on the other side would be too high." Yet, health-care companies are expected to continue to grow their group life business. "We're not going to be all things to all people. We're never going to write the million-dollar individual [life] policies, but strategically, that's not where we want to be," McCrary of WellPoint said. "We will go head-to-head with the [large life insurers] in the small to midsized market, and we will match rates with them day in and day out Adv. 1. day in and day out - without respite; "he plays chess day in and day out" all the time . We have 28 million members of medical coverage in force. Penetrating penetrating breaching the tissues of the body. just what we have is a great opportunity. We don't have to go out and do a lot of stand-alone cases. Just package to what we have, and we will win."
Group Life Issued--Top Writers, United States 2003
More companies that are predominately health insurers have risen to
the ranks of the top 30 writers of group life insurance. Group life
insurance is most often issued to a group of employees, but it might
be issued to any group, provided that the group is not formed for
the purpose of buying insurance. Ranking is based on the amount of
group life insurance issued in 2003.
($ Thousands)
%
Rank Group Name AMB# Issued Change
1 Metropolitan Life &
Affiliated Cos 70192 $145,689,896 -2.3
2 UnumProvident Group 69743 109,501,392 -10.1
3 Aetna Inc 70202 76,246,336 67.7
4 Prudential of America Group 70189 72,885,967 49.8
5 Cigna Group 70173 71,851,006 128.8
6 Hartford Life Group 70116 66,249,714 -32.9
7 AIG Life Group 70342 52,028,064 -5.3
8 ING Group 70153 46,137,289 21.3
9 MN Mutual Group 69763 33,812,004 7.1
10 Standard Ins Group 70398 29,496,535 -28.1
11 Reliance Standard Life Group 69825 26,534,268 -15.5
12 Sun Life Finl Group 69740 25,733,157 14.3
13 Jefferson-Pilot Corp 70156 25,213,751 6.7
14 Guardian Life 69685 19,727,644 -12.6
15 Great-West Life Group 70366 19,284,984 10.4
16 Mutual of Omaha Group 70203 18,148,918 69.1
17 Assurant 70135 14,197,564 -28.2
18 NY Life Group 69714 13,588,035 6.0
19 Principal Life Ins Co 06150 13,031,369 63.0
20 UnitedHealth Group 69973 12,405,917 -12.9
21 Genworth Finl Group 69555 10,321,600 6.0
22 Health Care Service Corp 69584 9,513,425 48.3
23 Aegon USA Inc 69707 9,094,389 4.8
24 WellPoint Health Networks Inc 70064 7,835,688 18.4
25 CNA Ins Group 70110 6,889,035 -68.1
26 Highmark Inc 70359 6,500,104 37.8
27 Amer United Life Group 70399 6,203,230 221.0
28 Anthem Inc 69906 6,081,550 39.9
29 MassMutual Finl Group 69702 6,021,034 -10.0
30 Torchmark Corp 70265 5,273,906 26.2
Source: A.M. Best Co.
Learn More Aetna Health and Life Insurance Co. A.M. Best Company # 08189, 68971,64071, 68698 Distribution: Brokers, consultants, retail network (pharmacy pharmacy, art of compounding and dispensing drugs and medication. The term is also applied to an establishment used for such purposes. Until modern times medication was prepared and dispensed by the physician himself. In the 18th cent. products) Unum Life Insurance Company of America (UnumProvident) A.M. Best Company # 06256 Distribution: independent brokers and agents, corporate marketing agreements, benefits consultants, direct sales force WellPoint Group (Blue Cross of California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). ) A.M. Best Company # 68970 Distribution: Independent agents, brokers, consultants, direct For ratings and other financial strength information about these companies, visit www.ambest.com. Key Points * Health insurers seeking to diversify their books of business are becoming more competitive in the group life market. * More than 75% of employers would like to consolidate their insurance coverage by placing more than one type of coverage with a carrier. * The top 10 companies writing group life insurance still represent a hefty heft·y adj. heft·i·er, heft·i·est 1. Of considerable weight; heavy. 2. Rugged and powerful. See Synonyms at heavy. 3. 77% of the market. Competition Heats Up The group life market is becoming more competitive. "What we've seen in the last three or four years is once you get out of the top 10 companies, the next tier companies are gaining in growth and market share at the expense of the top companies," said Anita Potter, manager of product research for Limra International. "They're gaining in the midsized to small company market. In 2003, much of the top 10 companies lost market share, which we haven't seen before? While Limra lists the top 10 group life writers by premium alphabetically al·pha·bet·i·cal also al·pha·bet·ic adj. 1. Arranged in the customary order of the letters of a language. 2. Of, relating to, or expressed by an alphabet. , it does not rank them individually. According to an A.M. Best Co. statistical study, five of the top 10 companies ranked by group life issued decreased from 2002 to 2003: MetLife slipped 2.3%; UnumProvident by 10.1%; Hartford by 32.9%; AIG AIG addressee indicator group (US DoD) AIG American International Group, Inc AiG Answers in Genesis (religious group in defense of Scripture) AIG Artificial Intelligence Group AIG Australian Industry Group Life Group by 5.3%; and Standard Insurance by 28.1%. Among those top 10 writers, Cigna Group showed the most growth at 128%. Aetna Inc. has risen from the 7th largest writer of group life issued in 2002 to become the third largest writer in 2003. With $76.24 billion in issued policies in 2003, Aetna grew 67.7% from the previous year, according to A.M. Best Co.'s Aug. 9, 2004, statistical study. Other predominately health writers also have fared well in the world of group life. For instance, Highmark Inc., a Pennsylvania Pennsylvania (pĕnsəlvā`nyə), one of the Middle Atlantic states of the United States. It is bordered by New Jersey, across the Delaware River (E), Delaware (SE), Maryland (S), West Virginia (SW), Ohio (W), and Lake Erie and New York Blue Shield Blue Cross Plan, has grown from being the 32nd largest group life writer by issued policies in 2001, to 30th largest in 2002 and the 26th largest in 2003. From 2002 to 2003 alone, the company's group life policies issued grew by 37.8%. WellPoint Health Networks Inc. and Anthem Inc., which recently merged, both also showed signs of growth in their group life business. WellPoint rose from the 34th largest writer in 2001, to the 27th largest in 2002 and the 24th largest in 2003, by group life issued. WellPoint's book of group life issued grew by 18.4% from 2002 to 2003 and by 57.6% from 2001 to 2002. Anthem also showed strong growth, jumping from the 37th largest company by group life issued in 2001 to the 32nd largest in 2002 to the 28th largest in 2003. From 2002 to 2003, the company's group life issued business grew by 39.9%. Had the companies been combined by year-end 2003, together they would have ranked as the 18th largest. Increases in group life's in-force premium volume continues to be driven by increases in salary and premium rates on existing groups, but employment growth in the small-group market has also been a factor, A.M. Best Co. said in its stat stat adv. With no delay. adj. Immediate. STAT Stat! Clinical medicine adverb Fast, quickly, immediately, schnell, vite Lab medicine noun study. "A.M. Best does note that the group life market remains extremely competitive, with many carriers taking business from one another. While many carriers have attempted to differentiate themselves through added benefits or services, employers continue to be the most concerned with price, "A.M. Best said in the study. New business issued grew by 3.5%, in 2003, compared with a 11.8% decline in 2002. |
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