American Community Retreating?

[Crabcake Johnny]

And again, the end of their advances to agents next month is pretty much the end of their individual business. Anyone want to guess how many agents will choose to stay on and sell as-earned? New business will drop like a rock.

I'm sure some agents will rearrange the deck chairs on this Titanic. Most will grab a lifeboat.

 

[ABC]

Not trying to belabor (or belittle) the point, but I have a great deal of experience on the carrier side and have read a lot of reports on premiums, claims, reserves, trending, PLR, IBNR reserves, etc.

Most health carriers do fine as long as their premium base is growing. Once it becomes stagnant or starts retreating they are in for a lot of trouble. If reserves are declining then a good chance premiums are as well.

You get into a snowball effect where premiums are dropping faster and faster and claims are no longer paid out of cash flow but from reserves.

You can't use a straight line interpolation to project reserve trends. It doesn't work that way. If their reserves have dropped 20% in 4 years they could easily drop another 20% in the next 12 months.

A M Best ratings on carriers that are predominantly health based don't bother me much since the formula's they use are mostly for life blocks. If the DOI puts a carrier on their watch list then it is time to worry.

This is a very valid point.

I have put in place two safe guards in the company to let me know if she is going to sink.

If i have to move 50 indiviudal policies in a 30 days I can do it. Now with E-apps I can submit 50 cases into underwriting with in 24 hours.


quote=healthagent;203065]And again, the end of their advances to agents next month is pretty much the end of their individual business. Anyone want to guess how many agents will choose to stay on and sell as-earned? New business will drop like a rock.

I'm sure some agents will rearrange the deck chairs on this Titanic. Most will grab a lifeboat.[/quote]

This is another valid point about agents not selling them anymore. My feeling is most agents were not selling them in the first place. In my city I am one of the few that is actively selling them. I have never had a problem getting claims paid by them.

If agents don't support small regional carriers they will not be around in the next 5 years. Its tough because some of them can't compete but when you find one that does I think its important to offer that option to your clients.

My feeling with AC is they have a good Individual product that saves clients money and they pay claims. They have to get out of the group business because they continue to fail at it. They have launched a good amount of terrible small group products year after year.

 

[somarco]

Regional carriers have their place but I don't know that they can make it in the volatile world of health insurance.

We have a regional carrier based in NE Georgia. Some really great folks work there but they have a very limited market. Their network is strong where others are weak but that is mostly the less populated areas.

Unfortunately I don't have much business there.

We have some regional HMO's that seem to be making it and their future is probably brighter than the more traditional carriers.

Health insurance is a deep pockets business model that requires some really sharp actuaries to keep you in the game. Due to their size, they have to lay off a significant portion of the risk which is costly. Large group, by its' very nature, is more predictable and easier to make a profit than small group or the individual market. A carrier that can't make a go of it in the 50+ or 100+ market has little chance of surviving the lower margin, fickle market of small group and individual major med.

Individual major med CAN be profitable if you write enough of it and do so responsibly. Most carriers end up chasing their tale and bow out in short order.

AC isn't in my market and I don't have a dog in this fight. Just giving some insight.

If JMO fan follows this thread he will have some insight.

 

[jamieb]

American Community will not be marketing anything aside from one of their Community Flex plans, unembellished,in certain states coming very, very soon. Concentrating on only a handful of states.

 

[InsureGuy5]

Didn't these guys do this once already? I though they left the market and came back again - and now they might have to leave once more. Personally, I don't find their products to be head and shoulders above anyone else, so why write them?

 

[HealthGuy]

The only people who really care about American Community are the greedy GAs that pimp this second tier stuff and make their inflated override on it.

 

[ABC]

Since I am the only one writing AC on here

American Community will not be marketing anything aside from one of their Community Flex plans, unembellished,in certain states coming very, very soon. Concentrating on only a handful of states.

The flex is about to gett hammered with a rate increase.
Which leads me to think it will be a tough sale.

Didn't these guys do this once already? I though they left the market and came back again - and now they might have to leave once more. Personally, I don't find their products to be head and shoulders above anyone else, so why write them?

I was writing them back then when the reserves dropped under $60 million. They had major underwriting problems. I was getting people approved that should have been declined. At that point they were in 7 state and was the number one individual carrier in the country. They lost that rank within a year and about went bust.

The HSA product they have is decent from a accident benefit. I had a client's son break his arm and the deductible was waived at the ER.

The only people who really care about American Community are the greedy GAs that pimp this second tier stuff and make their inflated override on it.

I wish I could say that is not the case with weak GAs.

In my state they do not cover mental health or chiropractic.
This has been huge for me to save people money. Everyone is on the anti depressant meds. So I am able to get them very low premiums compared to other companies that are covering that condition.

When you start talking about a saving over $1,500 a year for someone they can do some research on finding generics.

I have already seen a rate increase on the new business for 1-1-10. Looks to be about 8%-10% increase. That high!

 

[HealthGuy]

American Communitys built in accident benefit is no better than a stand alone supplemental accident benefit. When you factor it into the total cost of their HSA plans I have never found their HSA health plans to be competitively priced. And their underwriting usually offers no flexibility. No advantages.

 

[YouGotMyMoney]

American Community Update



As previously announced, American Community will no longer provide commission advances, effective for application dates of December 1 st, 2009, and later.

HOWEVER, AHCP is stepping up to help our agents.

Beginning with application dates of December 1 st, 2009, AHCP-on its own---will continue the 8-month advance loans on your American Community issued business for the present time.

COMMISSION ADJUSTMENT

In extending this commission loan program through our own resources, we must also make an adjustment to commissions.

Effective with commissions processed the week of 12-7-09 (New Business issued 11-30-09 and after), American Community commissions will be slightly lower. Please contact your Division President for your new first-year and renewal commission rates for American Community sales.
This adjustment to commissions for American Community business does not impact commission amounts for any other AHCP business.
Although American Community is making product changes in a number of states, our understanding of their actions is that the current product line is still available in MI, IN, OH, WI, IL, NE and TX. In certain other states, a new product, Flex 60, is being introduced in place of products previously available (AZ, AR, IA, MO, OK, SC and TN), and HSA and Short Term have been discontinued in these states.

REMEMBER: AHCP's platform is to provide multiple quality carriers, to provide flexibility for our agents during times of change. If you have any questions about products and carriers available in your state, please contact your Manager/Division President or consult the AHCP website.

 

[Crabcake Johnny]

And the reason any agent would recommed a C rated carrier is? Anyone? Beuller?