Ohio National and Constellation

[DHK]

Ohio national has never been a huge company.

 

[scagnt83]

It's not like the company was going into receivership.

Gee whiz.

They are selling out for 1% of their total assets. Sure seems like they weren't too far from it...

 

[rousemark]

Members are WL policy holders, and certain Annuity owners.

WL policy holders will get a voting notice about this, at least thats the way I read it.

This notice, specifically states who is and isnt considered a "Member".

But here is the catch Allen. People have to vote. Kind of like our democracy. It doesnt work properly when only a minority of people vote.

And look at that so called Q&A.... a bunch of feel good BS that mentions nothing of the many downsides... or the fact that they can even vote at all...

Yeah, and how many of those policyholders have signed proxies in the past and have given their voting rights to management?

 

[rousemark]

You can spin this any way you want but this is a fact.
Business will be replaced and it is a closed block.
The young healthy clients will move and the older less healthy clients will stay.
No new business on young helthy clients will come into the block.
The mortality on the block will worsen over time and negatively impact dividends.

Gee! We are talking about a life insurance company, not health insurance. Why would young healthy clients jump ship en mass? It is not like they are going to be hit with huge rate increases in the future.

 

[scagnt83]

You can spin this any way you want but this is a fact.
Business will be replaced and it is a closed block.
The young healthy clients will move and the older less healthy clients will stay.
No new business on young helthy clients will come into the block.
The mortality on the block will worsen over time and negatively impact dividends.

This.

Forget dividend paying WL moving forward... at least anything with a good dividend. Goodbye strong renewal rates. Goodbye strong conversion options. Its not a new story.

Hopefully WL policyholders will rally against it.

Crazy to think that they cant come up with that on the open market by issuing bonds, etc. Or even internal conservation by lowering rates.

Very sad day to see for our industry. So much for their "strong commitment to being a mutual company" they used to talk so much about.

 

[scagnt83]

Yeah, and how many of those policyholders have signed proxies in the past and have given their voting rights to management?

Not me. I dont think Ohio National ever did that.

 

[Tahoe Ray]

They are selling out for 1% of their total assets. Sure seems like they weren't too far from it...

I could never figure out why their DI was so much (typically 20%) less expensive than their competitors like Guardian and Mass (even Principal and Standard in many cases).

I have to wonder looking back if they were just trying to suck up as much premium as possible to stave this off.

 

[DHK]

They are selling out for 1% of their total assets. Sure seems like they weren't too far from it...

Even A.M. best always listed Ohio Nationals assets as between 500 million to 750 million they were never that big of a company.

 

[Allen Trent]

Only $500 million?? All of this over $500 million? Wow. They are in serious trouble.

From the way I read it, Constellation (1st time buyer) is paying $500M for the cash payments to the members/policyholders to buy them out. Then also giving/committing to ON $500M over the next 4-5 years as a cash infusion to help the balance sheet & invest in technology. $40B in assets under management at ON. $20B of that $40B was in Annuities they want to run off the books according to the AM best profile when they were slightly downgraded in 2019.

Probably gonna get stock shares or payment worth about $125 or less for every $10,000 in current cash values

 

[pfg1]

You have to keep in mind, they were not a true mutual... they were a mutual holding company, that could be spun out at any time. Unfortunately that time has come. It will be interesting to see what happens with them, and I hope the effects aren't crushing on the clients.

Gee! We are talking about a life insurance company, not health insurance. Why would young healthy clients jump ship en mass? It is not like they are going to be hit with huge rate increases in the future.

Because they signed up for a quality div paying life insurance policy. There may be no dividend going forward, or if so it'll likely be very low.