TIAA to stop selling life insurance by end of 2019

Jul 2, 2019

  1. Robert Barney
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    Typically these companies continue to operate the in-force policies they already have on the books.

    And nothing says they can't come back into the market with new products at a later date.
     
  2. VolAgent
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    Eh, not really. The authority to issue annuities is part of the authority to issue life insurance.

    While I get where you two are coming from. I do question if this will bring regulatory interest at some point. If the state legislatures had intended for companies to be annuity companies only, then they would have created it. Instead, the authority to issue an annuity is contingent on the authority to issue life insurance.
     
  3. Robert Barney
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    Life annuities are insurance and the benefits are directly linked to your "life". No company, licensed for life insurance, is duty bound to offer all the possible products that might be made available and regulated under that license.
     
  4. Allen Trent
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    I understand. But, will the regulators then come down hard on Progressive and Geico for not manufacturing Homeowners insurance?

    I dont see this being an issue anytime soon as there is so much competition in the industry it has been driving down the cost to the consumer for term life products. Ironically, some of that competition, along with way higher expense ratios for tech costs & regulation are causing some carriers to drop the manufacture of life insurance to focus on annuity. The cost to reprice all current & existing products with new mortality tables can be a massive undertaking, maybe so much to call it quits on life
     
  5. VolAgent
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    Sadly that does not hold water as the authority to issue auto insurance is not contingent on the authority to issue homeowners insurance.

    I do agree with the second part. And as long as it remains that way, it is likely regulators won't care. If and when it changes, then their level of interest may change as well.
     
  6. Robert Barney
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    Agreed, and that's a good thing.

    Don't agree here. Most companies reprice fairly routinely and while the new mortality tables have pushed some sooner than I think they might otherwise would have liked, I don't think that is the real problem.

    In fact some companies are now increasing their rate of repricing. We see some of the most competitive companies changing rates as much as 3 times per year.

    Compulife (my company) recently release a "Batch Analyzer" tool which does about 100 quotes per second, based upon the broad parameters stipulated by the user, and the results are exported directly to a spreadsheet file. Over 20 companies are now using this option to maintain a close and careful eye on their competitors to the market, and are making adjustments to their pricing as needed.

    Given that the term life market has gotten more and more competitive, it also means that it is less profitable than in years gone by. Companies with a casual interest in the market, and who do not streamline their costs and generate volume, will find it much less attractive than it was.

    The population is aging, and many people are increasingly getting past their term buying years.

    Millennials don't seem to have the same feelings of responsibility toward their dependents, and are less inclined to be life insured.

    I believe there is a growing failure of new agents to prospect. Many agent are trying to use selling methods (aka order taking) that rely upon the consumer coming to them. That means many consumers are increasingly under served. Many of the companies that offered traditional sale training to captive sales forces are walking away from that. The brokerage market has failed to come up with training alternatives.

    I fully expect mergers and acquisitions to continue and more and more carriers to step back from the term market. I don't think there is any reason to think we need a market with 100 life insurance companies selling term life insurance.
     
  7. Allen Trent
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    great points. I agree. I am just saying if some carriers feel like the pace of change & expectation of consumers and agents for innovation on top of constant repricing, maybe they believe it is taken too much focus from their more profitable lines of business such as EIA or VA, etc
     
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