Pru Renames Group Lines Unit To Reflect Successful Strategy.
Group insurance marketing has traditionally focused on large employers, but Prudential's group unit, based in Livingston, N.J., refocused its sales efforts toward small and midsized companies in 1996. Since then, it has achieved double-digit growth annually and expects a 14% increase in revenue this year.
Revenues in 1998 were $2.2 billion, ranking it second in group life premium in the United States, according to A.M. Best Co. data, and seventh in group disability premium, according to the company.
The change in marketing focus sprouted from a decision in 1996 to separate health care from the group life and disability businesses. Based on research with employer groups, brokers and other producers, Prudential built a new, independent product-development team, sales force and administration for the group life, disability and long-term-care lines.
The success of these ancillary products is tied to the difficulty that employers face in attracting and retaining employees, said Debra E. Goldberg, senior vice president in marketing and client management.
Integrated disability management interests more employers, Bossi said. This technique attempts to reduce worker absence by adopting medical case-management techniques for short-term and long-term disabilities that are used to help employees injured on the job return to work more quickly. "Employers aren't sure they want to implement it yet, but they want a disability carrier that has that capability, so it's beginning to be a price of entry in the LTD business," Bossi said.
To provide that capability, Prudential established an alliance with GatesMcDonald, a consulting firm specializing in workers' and unemployment compensation.
Prudential also enhanced its long-term-care group product and introduced an individual long-term-care product with the belief that employers will add it to their choice of voluntary benefits and that it will become a more attractive product through new government tax incentives and other measures, such as providing federal employees with a long-term-care program.
"The government realizes it can't--through Medicare and Medicaid--continue to support the needs of the elderly," Bossi said.
Workers buying long-term-care insurance are younger than today's typical buyers, so their premiums will be lower, she said.
Prudential launched a group variable universal life product last year, but market acceptance is slow. "You need an employee population with a significant amount of disposable income," said Bossi, pointing to financial-services firms, high-tech firms and the executive groups of other companies. "The product will catch on, but it will take time."
Prudential plans to introduce a business travel accident policy and is considering critical illness coverage. The group insurance unit is looking into combining products, such as individual variable universal life with long-term care, and is considering expanding recordkeeping services for employers.
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|Title Annotation:||Prudential Insurance Company of America|
|Comment:||Pru Renames Group Lines Unit To Reflect Successful Strategy.(Prudential Insurance Company of America)|
|Article Type:||Brief Article|
|Date:||Mar 1, 2000|
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