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May 15th, 2000 Edition
Extra! Extra!
BIG PRODUCER WORKSHOP - Eleven top producers and industry experts show you
incredible formulas for exploding your business in 2000, including:
How to Get Money Out of Retirement Plans Tax Free
How I Sell 400 Long-Term Care Policies a Year!
Three Annuity Strategies for Explosive Sales
How to Pack the Seminar Room Every Time
Personal Coach to Top Producers Reveals Success Rituals of Top Producers
DUTCH TREAT - ING, Europe's fifth-largest financial institution, is paying a steep price ($5.1 billion in cash and $1 billion in loans) for Minneapolis-based ReliaStar. The deal will double ING's assets under management in the United States and greatly increase its distribution network. ING is probably not finished with its U.S. acquisitions. Allmerica is rumored to be the Dutch giant's next acquisition target. And then there's Aetna. While an earlier joint offer by ING and Wellpoint to purchase the company was declined, new Aetna CEO William Donaldson told disgruntled shareholders that, while Aetna is not for sale, "he would consider any meaningful offers." Meanwhile, Aetna is "speeding" to carry out its previously-announced plans to split into two publicly-traded companies (health care and financial services) by this summer.
NAIFA, IIAA AND E-SIGNATURES - The largest P&C association and the largest financial services association have sent a joint letter to the House Commerce Committee Chairman outlining their concern with pending e-signature legislation. The associations' concern is with agents being liable for shortcomings in e-signature procedures for which they are not responsible.
PRU PLANS - According to Wick Simmons, CEO of Prudential Securities, his parent company will be looking for acquisitions or partners as soon as it goes public. The IPO is now scheduled for some time next year. Prudential, once among the largest U.S. financial companies, now has a net worth of roughly $25 billion. This is small compared to today's mega companies...Citigroup has a market cap of about $200 billion. "We will probably be part, after we go public, of a consolidation someday, with somebody. We may be the consolidator, or we may be the consolidatee. We will find out," Simmons said.
MARCH 2001 - In a letter to the SEC, the Securities Industry Association (SIA) recommended delaying the implementation of decimal pricing until March 2001, rather than implement earlier decimal pricing for exchange-listed stocks, with Nasdaq stocks continuing to be priced in fractions. Concerns center around investor confusion, as well as the expense of maintaining dual systems.
CONSECO WOES - Troubles continue for the Carmel, Ind.-based insurer as its first-quarter operating earnings fell 64%...falling far short of Wall Street's forecast. Investors have filed several lawsuits against Conseco, alleging that management misled shareholders about the value of the company's personal loans unit, formerly Green Tree. In the wake of all this bad news, founder and CEO Stephen Hilbert and CFO Rollin Dick stepped down. Hilbert still owns 4.1% of Conseco's stock...hope he saved some of his $14.5 million in 1998 compensation. Perhaps not, however...Investment News reports that "Conseco directors approved a $23 million emergency loan to Mr. Hilbert on April 6 to meet margin calls on Conseco stock."
TREND? - Concerns have been raised about Frontier Insurance Group's ability to continue as a going concern. The specialty P&C insurer is said to have insufficient reserves. According to analysts, Frontier's reserve problems may not be unique. Reserve problems could hamper the ability of smaller P&C companies to stay in business, while hurting the profitability of larger companies.
PMS - EDS, the world's No. 2-ranked computer services supplier, is making a bid worth more than $700 million for financial services consultant Policy Management Systems Corp. EDS wants to leveraging its existing IT and outsourcing skills in the insurance industry. One of PMS's current problems is "the loss of key customers due to a failure to keep pace with their demands for new ways of conducting business over the Internet."
BIGGEST INSURANCE RISK? - According to Lloyd's, the "Love Bug" computer virus that swept across the world is proof that e-commerce will emerge as the single biggest insurance risk of the 21st century. The cost to cope with the "Love Bug" is being estimated at over $15 billion worldwide and most of that bill is uninsured. That's a big number!
FEDERAL INSURANCE CHARTER - It's being reported that Michael Oxley (R-Ohio), Chairman of the House Finance Committee, is planning to hold June hearings on a federal insurance charter for insurers that choose to leave the state regulation system. Generally speaking, larger insurers appear to favor a system of federal regulation, while smaller insurers would prefer to stay with the current state regulation. In many quarters, some sort of dual federal and state charter is seen as inevitable.
HANGING IN AND MOVING ON - Despite calls for his resignation from the LA Times and a host of others, embattled Chuck Quackenbush is still the California Insurance Commissioner. Meanwhile, another high profile state commissioner, Bill Nelson of Florida, has launched his campaign for the U.S. Senate. Trivia: In 1986, Nelson became the first U.S. Representative to fly in space, aboard the shuttle Columbia. The mission returned to Earth 10 days before the launch of Challenger, which exploded a minute after lift-off.
Extra! Extra!
FREE MARKETING NEWSLETTER - How to improve your direct mail results, get more attendance at seminars, have people calling you from a direct response newsletter, get your name in the newspaper and more on building your business.
VARIABLE GROWTH - Variable life insurance is the fastest growing product in the industry today. Variable new business premium has grown dramatically from zero in the mid-80s to 38% of all new business premium written today. According to Prudential, survivorship variable life insurance is becoming ever more popular, with a growth rate of 144% between 1996 and 1998.
NEW FINANCIAL PRODUCT? - The ban on futures contracts on individual stocks may be repealed before Congress adjourns in October. It's reported that traditional exchanges are eager to offer new products in an effort to fend off the threat posed by their electronic challengers.
WHAT'S YOUR URL? - We believe every agent and adviser will need a Web site, but don't spend the money if you expect to get a flood of leads from it. View the site as an electronic brochure that promotes your business and offers financial tools as well as other value to your clients and prospects. Check out http://www.profiles.com/fsonline for a good, yet inexpensive, site provided through Financial Profiles.
SUPPLY NOT MEETING DEMAND - A new Conning study cites poor distribution efforts, and not a lack of demand, for the recent underachievement of worksite marketing. Worksite marketing has been viewed as a method for insurance carriers to improve distribution, but it has been slow to achieve its true potential. The Conning study shows that "employers and employees are eager to take advantage of the benefits of worksite marketing programs, but distribution bottlenecks and enrollment inefficiencies have made this market slow to perform."
BUYBACKS - The Treasury Department has implemented a regular schedule for buying back portions of the national debt, the first such buybacks in 70 years. Thus far, Treasury has bought back a total of $7 billion of outstanding 30-year Treasury bonds...still only a small fraction of the $5.7 trillion national debt, but a beginning.
QUOTES - There is a plethora of new sites (many owned by enterprising GAs) offering insurance quotes on the Net, but expect to see more of Quotesmith...selling and marketing expenses will be increased to about $28 million in 2000 from $14.4 million in 1999. They also expect to post a net loss of $25 million in 2000, compared with a loss of $13.8 million last year. Predicted breakeven point...3rd quarter of 2002.
PROSPECTING TOOL! - One of the most effective prospecting tools is a simplified fact
finder that is completed by the prospect. LUTC's Priority Planning Review is designed
to get your prospects thinking about financial matters and to tell you their current
financial priorities. Check out a copy at http://www.lutc.com/public/ppr-gama.pdf
(you'll need Adobe's Acrobat Reader installed on your computer). For details on how
to use this great prospecting tool, take LUTC up on its 30-day "free look" offer
for its Virtual Sales Assistant (http://www.lutc.com).
ALL THAT REALLY MATTERS - Sam Walton is quoted as saying, "In the end all that really matters is helping others." Howard Wight adds, "So the bottom line and the top line are: All that really matters is helping others. Make it your mission to help others. The more you help others...the more they will help you."
MARSH-MAC'S BANK - Marsh & McLennan, the world's largest insurance broker, won approval from regulators to set up an Internet savings bank. The new thrift, which will be called "AtBank," will market retail deposit products primarily to Marsh & McLennan's employees and existing customers and clients.
MAJOR TAX REFORM UNLIKELY - The prospects for major tax reform dimmed considerably with the report from Congress' nonpartisan Joint Committee on Taxation that, in order to be revenue neutral, a flat tax rate would have to be in the 26% range. There's not much support for that high of a flat tax rate, and there's even less support for a national sales tax of between 36% and 57% needed to generate as much in tax receipts as now. All of a sudden, the current system doesn't look so bad!
DÉJÀ VU ALL OVER AGAIN - After several years of relatively small increases, health insurance premiums are again rising several times faster than the rate of inflation, and are expected to continue to do so for the next several years. Not surprisingly, the number of uninsured Americans is expected to increase as a result.
BOOMERS AND NURSING HOMES - Not a pleasant subject to Baby Boomers, but more of us will spend our last days at a nursing home, and at significantly higher costs than are paid today. This according to recent American Council of Life Insurance studies. "With fewer children to rely on for care giving, middle-class Boomers who aren't planning now for long-term-care needs will be most vulnerable," according to the report.
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