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Conning’s GEMS Economic Scenario Generator Selected by the NAIC to Provide Scenario Files for the U.S. Life Insurance Industry

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Conning’s GEMS Economic Scenario Generator Selected by the NAIC to Provide Scenario Files for the U.S. Life Insurance Industry

Conning, a leading global provider of risk and capital management software and professional services to the financial industry, has been chosen by the National Association of Insurance Commissioners (NAIC) to provide its award-winning* GEMS® Economic Scenario Generator scenario files for use in calculations of life and annuity statutory reserves and capital under the NAIC RBC requirements.

Economic scenario generators allow users to simulate future states of the global economy and financial markets, and this information can give insurers more confidence as they plan for their future reserves and capital needs. Conning’s tool uses advanced modeling and estimation technology to produce empirically validated, realistic economic behavior.

“We are pleased to partner with the NAIC on this initiative,” said Woody Bradford, Conning’s CEO and Chair of the Board. “Our 10 years of experience in providing this software to our insurance and pension clients globally has guided the development of our robust capabilities. We are also offering the expertise of our outstanding software services team to help the NAIC and insurers get the most out of these powerful datasets.”

Conning will provide the NAIC with updated real-world scenarios modeling interest rates, equities and other economic factors, and provide full documentation and training materials for regulators and insurers. The firm will also work with the NAIC to review proposed changes and implement those adopted by regulators.

ABOUT CONNING

Conning (www.conning.com) is a leading investment management firm with a long history of serving the insurance industry. Conning supports institutional investors, including pension plans, with investment solutions and asset management offerings, risk modeling software, and industry research. Conning’s risk management software platform provides deeper insights for decision making, regulatory and rating agency compliance, and capital allocation. Founded in 1912, Conning has investment centers in Asia, Europe and North America.

About Conning’s Risk Management Software

Conning’s risk management software platform includes GEMS® Economic Scenario Generator, FIRM® Portfolio Analyzer, ADVISE® Enterprise Risk Modeler, and Cloud-IO™, and provides deeper insights for decision making, regulatory and rating agency compliance, and capital allocation.

ADVISE®, FIRM®, and GEMS® are registered trademarks in the U.S. of Conning, Inc. Copyright 1990-2020 Conning, Inc. All rights reserved. ADVISE®, FIRM®, and GEMS® are proprietary software published and owned by Conning, Inc.

*Stress Scenarios Software of the Year, InsuranceERM Americas Awards 2020

The Hartford Finds Pandemic Renews Focus on Employee Benefits That Provide Financial Protection

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The Hartford Finds Pandemic Renews Focus on Employee Benefits That Provide Financial Protection

The Hartford’s 2020 Future of Benefits Study found that the pandemic has placed a greater emphasis on employer-sponsored benefits that help people plan for unexpected life events and provide financial protection. According to the study, 40% of U.S. workers say they will consider purchasing life insurance during their next open enrollment as a result of COVID-19.

“The pandemic is shining new light on the benefit programs offered to employees through their workplace, revealing features they might have been overlooking,” said Jonathan Bennett, head of Group Benefits at The Hartford. “People are facing challenging circumstances – whether it is the shattering experience of losing a loved one or becoming sick themselves – and are now recognizing the value of financial protection provided by life insurance and other benefit options. As we mark Life Insurance Awareness Month and approach benefits enrollment season, we encourage employees to carefully review and consider the benefits offered by their employer that can help them prevail through difficult life experiences.”

The Hartford’s Future of Benefits Study, which polled U.S. workers and human resource benefit decision makers before the COVID-19 outbreak in the U.S. in early March 2020, and again in mid-June, found that employees say they would consider purchasing the following benefits during their next open enrollment because of COVID-19:

  • Life insurance: 40%
  • Short-term disability insurance: 30%
  • Long-term disability insurance: 29%
  • Critical illness insurance: 27%
  • Hospital indemnity insurance: 23%

A shift in benefits buying habits

Employees in their early twenties (generally considered Gen Z and younger Millennials) are more likely to upgrade or buy additional benefits offered by their company than they were before the pandemic began. While more workers overall showed interest in upgrading or purchasing additional benefits, the youngest workers indicated the most notable shifts in attitudes.

 

  I typically don’t upgrade or buy the additional benefits offered by my company.
  Total Gen Z/younger Millennials (1995-2002) Older Millennials (1981-1994) Gen X (1967-1980) Baby Boomers (1955-1966)
Early March (Before the pandemic escalated in the U.S.)

 

 64% 73% 66% 62% 62%
Mid-June (Amid the pandemic in the U.S.)

 

 55% 59% 60% 52% 55%

 

“We have been conducting research about Millennials’ preferences for many years and have found that the youngest generation typically has the lowest participation rates in company-sponsored benefits,” Bennett said. “It is encouraging to see this notable shift and it is even more important now to make sure employees have access to educational information to make informed benefits decisions. We’ve developed new resources using data and personalized experiences to communicate the value and affordability of voluntary benefits, as well as the ease of enrollment at work and payment through payroll deductions.”

Personalized benefits experience

Gen Z and younger Millennials consistently indicate that they would like a personalized recommendation for what benefits they should be buying (68% in both waves of the survey). With multiple generations in the workforce today, The Hartford has developed educational resources to help employers communicate benefits options through targeted, data-driven methods, including:

  • An online education center giving employees access to relevant, personalized voluntary benefits information they need to make informed decisions;
  • Tailored communications based on an understanding of their individual benefit needs, influences, life stages, buying habits and mindsets; and
  • A fully digitized benefits experience employees can access at their convenience including one-on-one sessions with benefits counselors, virtual benefits fairs, videos, plan details and other content based on their preferred method of learning.

Insuring more than 20 million Americans, The Hartford is a leading provider of employee benefits products and services, including leave management, group life and disability insurance, as well as other voluntary products. For more information, visit www.thehartford.com/groupbenefits.

Methodology

The Hartford’s 2020 Future of Benefits Study was an online survey fielded in two waves. The first wave was fielded from Feb. 27 – March 13, 2020, just before the pandemic escalated in the United States, and included 761 employers and 1,503 employees. The second wave was fielded from June 15 – June 30, 2020 and included 567 employers and 1,038 employees. The employers surveyed were HR human resource professionals who manage/decide employee benefits and employees surveyed were actively employed. The margin of error is employer +/- 4% and employee +/-3% at a 95% confidence level.

Key Trends in Mergers & Acquisitions Insurance Highlighted in Decade-Long Study From Liberty Mutual Insurance

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Key Trends in Mergers & Acquisitions Insurance Highlighted in Decade-Long Study From Liberty Mutual Insurance

Liberty Global Transaction Solutions (Liberty GTS) has announced findings from its inaugural Mergers & Acquisitions claims study.

“Having issued more than 2,000 policies since 2010 and managed over 300 notifications of warranty breaches across the globe, we are in a unique position to uncover M&A claim trends that can help deal makers and advisors better understand and manage their exposure,” said Liberty GTS President Rowan Bamford. “This is vitally important now as the M&A insurance industry grapples with four key challenges: an over-supply in capacity, a significant drop-off in deal flow, an increase in claims activity and the emerging risks caused by COVID-19.”

Key study findings include:

Impact of COVID-19

While COVID-19 has yet to result in a noticeable increase in M&A claims activity, it is possible that the pandemic may result in certain types of claims becoming more common, such as those related to labor issues or key customer insolvency.

Notifications are rising

There has been a noticeable uptick in notifications over the last few years, with about 19% of policies now receiving a notification.  However, no more than 25% of these notifications result in actual claims – a statistic that has remained relatively consistent over the years, despite rising notification frequency.

Smaller deals produce more notifications

Deals with an estimated value of $250 million or less are more likely to result in notifications and account for the largest paid claims, compared to deals valued at more than $1 billion. They have also resulted in the most pay-outs of policy limits.

Notifications are being made sooner

Notifications are being made more quickly than in the past. However, there is a notable divergence when it comes to deal size, with most notifications on smaller deals being made in the first year of the policy period, while the majority of notifications on the largest deals happen in the second year of the policy period.

Common breaches leading to notifications and claims

The most frequent notifications involve tax-related breaches, although many of these are filed as a precaution and rarely develop into substantive claims. Claims relating to breaches of financial statement warranties continue to be common, and the value of these claims can be significant. Claims relating to breaches of material contracts warranties – already common in the Americas – are becoming more frequent in other regions, making it the fourth most frequent breach type globally.

High severity claims are still rare

Claims for an amount in excess of $10 million are relatively uncommon – they made up just 8% of notifications globally, although the Americas has seen slightly more of these types of claims compared to the Asia Pacific and Europe, Middle East and Africa regions.

New claims trends are emerging

Recently, there has been a large number of claims relating to stock and inventory issues, as well as claims involving more niche issues, such as software licensing shortfalls and the failure to comply with health and safety legislation.

“We issued our first claims study during a year in which we have seen a great amount of uncertainty in the Mergers & Acquisitions space,” said Bamford. “It’s fitting that it comes at a time when potential insureds – with good reason – are focused more than ever on the strength of an insurer and its approach to claims.”

EMC Earns Elite Certification for Ease of Business for Independent Agents

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EMC Earns Elite Certification for Ease of Business for Independent Agents

EMC Insurance Companies has been awarded DCC Elite certification by Deep Customer Connections. Awarded to only five property/casualty insurance carriers nationally, the honor represents exceptional performance in, and commitment to, ease of business as experienced by independent agents.

“EMC places great value and importance on our relationships with our independent agent partners,” said Scott Jean, EMC President & CEO. “To be recognized for our agent experience efforts and ease of business is very reaffirming and rewarding. We look forward to continuing to innovate to better serve our independent agent force.”

DCC Elite certification requires two levels of qualification. First, each carrier must demonstrate mastery in ease of business, verified by Deep Customer Connections, using standardized metrics and competitive benchmarks derived from each carrier’s own agent network. Second, eligible carriers must pledge to implement specific strategies to further improve their performance in ease of business factors.

“The DCC Elite program recognizes carriers who step up in a profound way to support their distribution network,” says Jason Bogart, CEO of Deep Customer Connections. “Many carriers claim to make it easy for their agents to write business, but few actively invite anonymous feedback from all of their agents to make sure that they deliver on their promise.”

“Ease of business is an experience that constantly shifts along with customer expectations, staffing, competitors’ programs and other variables,” explains Bogart. “DCC Elite carriers have proven their dedication to ongoing innovation when it comes to serving their agents.”

About Deep Customer Connections

Deep Customer Connections focuses on helping property/casualty insurance executives leverage ease of business as a strategic differentiator. Year after year, 98% of independent agents report that ease of business is critical to their decision of where they place business. Widely known for measuring agents’ perceptions of how easy it is to do business with specific carriers, Deep Customer Connections uses its DCC Index™ to benchmark clients’ competitive positions across 11 Performance Factors that matter the most to agents.

BH GUARD Continues Expanding Its Full Line of Professional Liability Products Across the United States

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BH GUARD Continues Expanding Its Full Line of Professional Liability Products Across the United States

Berkshire Hathaway GUARD Insurance Companies recently announced it continued its expansion of the company’s Professional Liability products, which include coverage for Lawyers, Architects and Engineers, Accountants, and nearly 100 more classes of business. Most recently, the company has added Professional Liability for Lawyers in Alabama and New Mexico, for Accountants in Arizona and Illinois, and for Architects and Engineers in Missouri. In all, the company has introduced products from their suite of Professional Liability coverages in eight states this year with plans for a dozen more by year end.

An unintended error or omission while performing the job could have serious consequences for a business. Due to perceived – or real – negligence, a dissatisfied customer or third-party could pursue litigation, putting a firm’s finances and reputation in danger.

“We continue to expand our portfolio to supply our network of independent agents with quality products that enable them to grow,” said Sy Foguel, Berkshire Hathaway GUARD CEO. “In 2016, we began writing Professional Liability for a limited number of classes in 13 states. We now offer Professional Liability in 32 states and continue to exercise our targeted growth strategy with the goal of offering these products to all available classes nationwide in the near future.”

“Our Professional Liability product is designed to address the damages commonly incurred as a result of wrongful acts. Depending on the line of business, we offer limits from $100,000 up to $5 million and a wide range of deductible options,” explains Lyle Hitt, Chief Insurance Officer. “Full Prior Acts coverage and subpoena assistance may be requested along with a variety of other optional add-ons.”

Berkshire Hathaway GUARD’s Professional Liability product aims to meet the needs of many different professions. Policyholders are offered a variety of complementary services including online training videos, a risk-management help line and website for lawyers, and 24/7 self-service features via an online service center and mobile app.

Ryan Specialty Group and All Risks Finalize Merger

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Ryan Specialty Group and All Risks Finalize Merger

Ryan Specialty Group, LLC (RSG) and All Risks, Ltd. (All Risks) are pleased to announce the completion of the transaction to merge the two firms into Ryan Specialty Group. RSG is an insurance specialist providing services in wholesale brokerage and delegated underwriting authority in the form of binding authorities, programs and managing general underwriting companies. The combination of All Risks and RSG, with roughly 3,300 employees and 70+ offices across the United States, the United Kingdom and Europe, is projected to handle nearly $15 Billion in premium during 2020.

Explaining the strategy of combining these two outstanding companies, Patrick G. Ryan, Founder, Chairman and CEO of Ryan Specialty Group, commented, “The world has become a much riskier place, and our clients’ needs have expanded. As hazards continue to evolve, they are becoming larger and more complex. Social inflation liability, cyber and transactional exposures, among a myriad of other emerging and ever-present unforeseen threats, require forward-thinking responses. To provide our clients the best solutions, we have brought together an exceptional group of brokers and underwriters. Along with the extraordinary talent that All Risks brings to the group, there are over 36 superb specialty programs, an industry leading training and development platform in All Risks University, and a deep, complementary culture. Further strengthened by the former All Risks team, Ryan Specialty Group is in prime position to continue to be nimble and innovative as we create products and find the answers that meet the ever-changing needs of the industry.”

Nick Cortezi, CEO of All Risks, added, “RSG is a natural fit for All Risks. We share the same values, the same focus, and the same will to win. We could not be more excited about bringing these two remarkable companies together. The combination of resources and talent enables us to continue to raise the bar for excellence in wholesale brokerage and rapidly expanding delegated authority responsibilities. Looking forward to great days ahead!”

Terms of the transaction were not disclosed.

J.P. Morgan served as sole M&A Advisor to Ryan Specialty Group. J.P. Morgan, Barclays, and BMO Capital Markets served as Financial Advisors to Ryan Specialty Group.

Reagan Consulting served as M&A Advisor to All Risks, Ltd.

Life Insurance Sales Down Across the Board

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Life Insurance Sales Down Across the Board

Wink Inc. released the second quarter, 2020 life sales results in its 92nd edition of Wink’s Sales & Market Report. Wink’s Sales & Market Report is the insurance industry’s #1 resource for life insurance sales data, since 1997.

Non-variable universal life sales for the second quarter were $642.0 million; down 16.6% when compared to the previous quarter and down 27.5% as compared to the same period last year. Non-variable universal life (UL) sales include both indexed UL and fixed UL product sales.

Noteworthy highlights for total non-variable universal life sales in the second quarter included Pacific Life Companies retaining the #1 ranking overall, for non-variable universal life sales, with a market share of 11.2%. Pacific Life Pacific Discovery Xelerator IUL 2 was the #1 selling product for non-variable universal life sales, for all channels combined, for the 4th consecutive quarter.

Indexed life sales for the second quarter were $494.9 million, down 6.0% when compared with the previous quarter, and down 14.3% as compared to the same period last year. Indexed life sales include both indexed UL and indexed whole life. “Product repricing for 2017/PBR is definitely catching up with everyone,” exclaimed Sheryl J. Moore, President and CEO of both Moore Market Intelligence and Wink, Inc. She continued, “This cyclical reduction in sales is something we see every time the mortality tables update, but this time it was more severe!”

Items of interest in the indexed life market included Pacific Life Companies retaining the #1 ranking in indexed life sales, with a 13.9% market share. National Life Group, Transamerica, John Hancock, and Nationwide rounded-out the top five, respectively.

Pacific Life Pacific Discovery Xelerator IUL 2 was the #1 selling indexed life insurance product, for all channels combined, for the 4th consecutive quarter. The top pricing objective for sales this quarter was Cash Accumulation, capturing 69.0% of sales. The average indexed life target premium for the quarter was $10,716, an increase of more than 15.0% from the prior quarter

Fixed UL second quarter sales were $147.5 million, down 39.6% when compared with the previous quarter and down 52.4% as compared to the same period last year. Noteworthy highlights for fixed universal life in the second quarter included the top pricing objective of No Lapse Guarantee capturing 65.9% of sales. The average UL target premium for the quarter was $5,830, a decline of more than 9% from the prior quarter. Moore commented, “The decline in fixed interest rates, which has plagued the life insurance industry for more than a decade, continues to drive traditional UL sales downward.”

Whole life second quarter sales were $930.0 million, down 10.4% when compared with the previous quarter, and down more than 21.0% as compared to the same period last year. Items of interest in the whole life market included the top pricing objective of Final Expense capturing 61.7% of sales. The average premium per whole life policy for the quarter was $3,823, a decline of nearly 9% from the prior quarter. “With indexed life facing additional regulatory changes due to AG49-A, and fixed UL credited rates not improving, whole life insurance sales have the brightest future for next quarter’s sales.,” commented Moore.

Wink currently reports on indexed universal life, indexed whole life, universal life, whole life, and all deferred annuity lines’ product sales. Sales reporting on additional product lines will follow in the future.

For more information, go to www.WinkIntel.com

Keystone Expands Its Franchise Into Maryland

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Keystone Expands Its Franchise Into Maryland

Keystone Insurers Group (Keystone) expands its footprint into Maryland by partnering with Bay Area Insurance Group of Annapolis.

“Bringing Bay Area Insurance on as our first Keystone partner in the state of Maryland is a testament to the strong expansion Keystone is experiencing this year,” noted Margo Mackedanz, executive director of franchise expansion at Keystone. “They are a quality agency and a perfect fit for us. They know the benefits our partnership will realize, from tapping our divisional resources to cultivating partner relationships throughout our 16 states. Brian Roszell and his team will play an integral role in expanding our partnerships throughout the Maryland and Delaware area.”

“Keystone will give us access to markets and high-end services that are otherwise available only to giant agencies, all while allowing us to remain independent,” explained Brian Roszell, CIC, agency managing partner.

About Bay Area Insurance Group–The agency has been serving the Annapolis and Bay Area with specialized products and versatility since 1981. The staff works with their clients in dedicated production and account management teams. Managing Partner Brian Roszell will assume ownership of the agency in the near future. For more, visit https://www.bayareains.com/.

About Keystone Insurers Group (Keystone) — Keystone started in 1983 when four independent insurance agencies teamed up to pool their experience and expertise. Growing to almost 300 independent agency partners in 16 states, Keystone provides its agents with a community of like-minded agencies, industry expertise and access to specialized products for their clients. Keystone is ranked number three on Insurance Journal’s 2019 list of Top 20 Agency Partnerships. For more information, go to www.keystoneinsgrp.com.

Brian S. Hertzman Promoted to Senior Vice President and Chief Financial Officer of American Financial Group, Inc.

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Brian S. Hertzman Promoted to Senior Vice President and Chief Financial Officer of American Financial Group, Inc.

American Financial Group, Inc. (NYSE: AFG) is pleased to announce the promotion of Brian S. Hertzman to Senior Vice President and Chief Financial Officer.

Mr. Hertzman joined AFG in 1991 and has held positions of increasing responsibility within the Company’s finance and accounting areas during his nearly 30-year tenure. He previously served as Vice President and Controller of AFG, with responsibility for oversight of accounting policies and procedures in compliance with GAAP and other applicable regulations, and financial reporting to the Securities and Exchange Commission. In June 2020, Mr. Hertzman was named interim principal financial and accounting officer.

Mr. Hertzman earned a bachelor’s degree in Accounting and Finance from the University of Cincinnati and a Master of Business Administration in Finance from Xavier University. He is a Certified Public Accountant (CPA) in the State of Ohio, and a member of the American Institute of CPAs, the Ohio Society of CPAs and Financial Executives International. He also serves on the board of Camp Livingston, a non-profit community-based camp that serves the Greater Cincinnati area.

Carl H. Lindner III and S. Craig Lindner, AFG’s Co-Chief Executive Officers commented, “Brian’s business acumen and leadership skills have positioned him for success in this executive leadership role. We are proud of the strength of AFG’s succession planning and talent development programs, which have helped us build a deep bench of strong candidates for leadership opportunities at all levels of our organization.”

About American Financial Group, Inc.

American Financial Group is an insurance holding company, based in Cincinnati, Ohio with assets of approximately $70 billion as of June 30, 2020. Through the operations of Great American Insurance Group, AFG is engaged primarily in property and casualty insurance, focusing on specialized commercial products for businesses, and in the sale of traditional fixed and indexed annuities in the retail, financial institutions, broker-dealer, and registered investment advisor markets. Great American Insurance Group’s roots go back to 1872 with the founding of its flagship company, Great American Insurance Company.

Workers See More Value in Employee Benefits as Pandemic-Era Annual Enrollment Nears

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Workers See More Value in Employee Benefits as Pandemic-Era Annual Enrollment Nears

Amid the COVID-19 pandemic and the resulting economic fallout, workers report a significant increase in the value they place on the employee benefits offered by their employers, including a double-digit increase in how likely they are to remain at a job based on non-health benefits such as retirement savings, disability insurance, life insurance and other tools to help alleviate financial stress.

In a survey by Prudential Financial (NYSE: PRU) to understand employee needs and perspectives ahead of the 2020 annual enrollment period, employed respondents overwhelmingly said their benefits programs make up a key part of their compensation (77%, up from 67% from a year ago) and are a big reason they would stay at a job (73% vs 59%).

Under normal circumstances, open enrollment season poses unique opportunities and challenges for employers and brokers. This year, the impact of COVID-19 will provide the backdrop as they are tasked with curating, administering and communicating the right mix of employee benefits to support the interconnected physical, mental and financial wellness of their employees.

Workers will similarly face enrollment decisions in the current environment—and those choices matter, in unexpected ways. The research found that people who report that their benefits reduced stress are more likely to opt for certain lesser-adopted benefits—particularly those that can alleviate unanticipated expenses. Examples include participation in a health savings account, accident insurance and life insurance.

Other findings in the survey, conducted Aug. 3-4, include:

  • 75% agreed that, “Due to the pandemic, I feel that access to benefits through an employer is now more important than ever before.”
  • 75% agreed that, “Given the current environment, it makes me realize that benefits are a much more important part of a job.”
  • By more than a 2-to-1 margin, respondents said they would “be willing to take a chance on a new job right now if it offered better benefits” (52% agree vs. 24% disagree, with 24% neutral).

“While we’re pleased to see workers increasingly recognize the value of a comprehensive, cohesive workplace benefits package, we also cannot ignore that this stems from the financial, physical and mental stressors of the pandemic,” said Leston Welsh, head of business segments for Prudential Group Insurance. “Given the uncertainty of the current environment, it’s more important than ever for employers to educate and encourage their employees to choose the solutions that will help safeguard their financial security — over the near and long term.”

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