Majority of insurance companies are providing easy to understand statements, says DALBAR

Manulife Financial, Standard Life and Canada Life are the best at providing policyholders with informative, appealing and straightforward statements, according to DALBAR’s 2007 universal life policyholder statement analysis.

Manulife Financial was the only firm to reach DALBAR’s “Excellent” designation level for universal life statements this year.

The Universal Life Policyholder Statement Analysis examined statements from nine Canadian insurance companies and used DALBAR’s criteria to assign each a score out of 100.

The top-ranked Universal Life statements for 2007 are:

1. Manulife Financial;
2. Standard Life;
3. Canada Life;
4. Sun Life Financial; and
5. Clarica.

Due to the complicated nature of universal life policies, it would be expected that universal life statements would be just as complicated. Fortunately, the majority of insurance companies are providing easy to understand statements that do not drown the reader in jargon, abbreviations, and difficult language.

“The single biggest deficiency today in universal life statements is performance reporting,” said Kevin Lam, senior manager of private research of DALBAR’s Toronto office, “one of the most important pieces of information that they will look at is the rate of return.”

DALBAR also examined 12 segregated fund industry statements from the investor point of view. Throughout this study, DALBAR found that overall, seg fund providers have made significant improvements to their statements. However, they are still failing to highlight the details of their value added features; deposit maturity dates, guarantee amounts, reset options; and death benefit guarantee amounts.

The top-ranked seg fund statements for 2007 are: