Insurance advisors prefer selling life products, but the major insurance carriers say living benefits products are gaining ground.
“Critical illness has to be considered the hot product in Canada,” says Teresa Walkey, product director of living benefits products at Waterloo, Ont.-based Manulife Financial Corp. “Two years ago, it would have been difficult to have a conversation with an advisor [about critical illness insurance], but now it’s gaining interest.”
Critical illness and disability insurance are by no means top sellers. In fact, advisors and major insurers report that universal life and term life products still dominate. Living benefits are among their least popular products, but there are indications they may be the ones to watch in coming months. Insurers say the products’ relative newness accounts for the weak sales, but that should be temporary.
Halifax-based Maritime Life Assurance Co. offers the broadest product line of any insurance company that works exclusively through independent advisors, says Brian Taylor, the company’s vice president of retail pricing and design. The firm offers living benefits, investment and life insurance products.
“CI is probably the product that is gaining most in acceptance,” Taylor says. “It’s a product that really was quite new just three years ago, and now … virtually every broker is probably familiar with and selling that product.”
Transamerica Life Insurance Co. of Canada, which markets UL, term and CI products to independent agents, says its new CI product, Critical Advantage, is quickly gaining acceptance.
CI is also the fastest-growing product at Burlington, Ont.-based UnumProvident Corp., which specializes in living benefits. “We have a good one, and we kind of leverage off our positioning as a disability leader and living benefits specialist,” says Gary Fetcher, the firm’s director of sales operations. The company recently launched a long-term care product and is reworking its CI product.
On the life side, UL products are the top sellers for many companies, with term policies still accounting for significant premiums.
Standard Life Assurance Co.‘s flagship Prospecta UL policy is the Montreal-based firm’s most popular, says Francis Labarre, manager of marketing development and implementation. Prospecta accounted for 80% of Standard Life’s sales in 2002.
It’s a similar story at Manulife, RBC Life Insurance Co. and Clarica Financial Services Inc., for which UL products are the top sellers. “Right now, universal life is selling best because it is a mature product,” says Manulife’s Walkey.
RBC’s UL product, Destiny, which has a number of investment accounts and a guaranteed account built into it, is its top seller. “That seems to be where people are showing some real interest, particularly with equity markets being as volatile as they have been,” says Kathryn Giffen, president of Mississauga, Ont.-based RBC Life.
While UL sales appear to dominate, term insurance sales are still significant.
Maritime Life recently reviewed and repriced its term product. “It’s probably the one that brokers are most excited about now, as it is fresh and new to the market,” says Taylor.
Clarica’s custom term product is its best, based on number of sales, but accounts for only 35% of life sales overall, says president Jack Garramone. The firm’s UL product accounts for 45% of total premiums.
Both Transamerica and Toronto-based State Farm Insurance Cos. say their respective term products are their top sellers
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Developing and offering products is one thing; marketing them is quite another, and the major firms are always coming up with new ways to reach out to advisors.
Manulife, which respondents to the 2003 Insurance Advisors’ Report Card mentioned most often as their key supplier, reaches advisors through its field management staff, which contacts advisors directly with new products and updates. The firm also has a strong presence on the Web.
When advisors sign a contract with Manulife, they choose a package that details the level of service and compensation. All advisors also have access to RepSource, Manulife’s Web tool.
Standard Life has staff, known as “business development managers,” who are responsible for developing relationships with the insurance brokers, creating new contacts and providing service to advisors, Labarre says, as well as specialists who provide technical expertise to brokers. It also bolsters its marketing with a cross-country road show.
Toronto-based Canada Life Assurance Co. promotes its UL, term, par, disability and CI products to independent agents using a “target marketing” strategy, says Andrea Hampton, vice president of individual insurance and product development: “The broker is key to us. Most of our marketing and advertising is always to the broker.”