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I just received an email from an FMO stating that North American will no longer be accepting new agents for an indefinite period of time. Has anyone heard about this?
North American Will No Longer Be Accepting New Agents.
- Thread starter AffordableLife
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- 2,452
One word: Receivership.
- 924
Got it too.
As with Aviva, it is more a reserves issue.
North American has actually done two things to slow down business: no annuities for less than $20k and no new agents.
If you want to avoid running into a reserves problem, you slow new sales. So, that being the case, why not start with cutting the least profitable things, like small annuities that have the same overhead as large annuities?
This is sort of the way Aviva started to address it's reserves problem.
Since the value of reserves for all companies have gone down drastically with the market, most companies are facing problems.
As with Aviva, it is more a reserves issue.
North American has actually done two things to slow down business: no annuities for less than $20k and no new agents.
If you want to avoid running into a reserves problem, you slow new sales. So, that being the case, why not start with cutting the least profitable things, like small annuities that have the same overhead as large annuities?
This is sort of the way Aviva started to address it's reserves problem.
Since the value of reserves for all companies have gone down drastically with the market, most companies are facing problems.
- 1,802
North American has stopped receiving agents for their fixed annuity side of the business; not the life side.
North American is working on expanding their life side of the business; as they have their annuity appetite satisfied for the mean time.
In speaking with one of their top executives; North American does not want the influx of annuity agents from American Investors.
North American is working on expanding their life side of the business; as they have their annuity appetite satisfied for the mean time.
In speaking with one of their top executives; North American does not want the influx of annuity agents from American Investors.
- 924
- Thread starter
- #7
- 109
Yes, just got the clarification that it is only the annuity side of their business. They do still want Life agent's.
- 924
Stop and think why they want life business but not annuity.
$200,000 annuity = $200,000 going into reserves.
$200,000 life policy = [I frankly don't know how it is calculated, but I would bet it more based on premiums paid and is a lot less than annuity liability on their books].
$200,000 annuity = $200,000 going into reserves.
$200,000 life policy = [I frankly don't know how it is calculated, but I would bet it more based on premiums paid and is a lot less than annuity liability on their books].
- 1,802
It goes back to how much re-insurance they purchased to cover the annuity block of business. Re-insurance is selling for a high premium right now with all of the volatility; making the annuity market less attractive / profitable.
I do see your point and would assume that it goes back to the profitability on the life block of business.
I would also be interested in how a life policy is more profitable with respect to the insurance company. I hope this helps.............
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