Ruark Insurance Advisors has the capability to help our clients structure, price and place life reinsurance Aggregate Stop Loss programs. We use our stochastic mortality model to evaluate the mortality fluctuation risk of your business. From this analysis, the Attachment Point and Claim Limit can be chosen to provide the risk coverage desired, at the price acceptable to the Ceding Company. Ruark Insurance Advisors then places the reinsurance program with reinsurers acceptable to the Ceding Company. A more detailed description of these programs can be found at:
Life Reinsurance Aggregate Stop Loss Programs
Rich Tucker and Tim Paris’ article entitled “State of the Variable Annuity Reinsurance Market” has been reproduced in the January 2011 newsletter of the Society of Actuaries Reinsurance Section. The newsletter can be found at:
Reinsurance News January 2011
The Society of Actuaries has released the 2010 VA Policyholder Behavior in the Tail survey results for VA guaranteed benefits. This survey is conducted annually by the Joint Risk Management Section to assist the industry in developing better estimates of policyholder behavior in the tail. Rich Tucker is a member of this Working Group. The report can be found at:
2010 VA Policyholder Behavior in the Tail Survey Results
Ruark Consulting will conduct the industry’s first aggregate surrender study for indexed annuity products. Eight companies are currently expected to participate, including most of the major indexed annuity writers. Participating companies will benefit from the extensive analysis of their own data, aggregation of results across the industry, and ability to compare their own results to the aggregate.
The indexed annuity surrender study is an extension of Ruark Consulting’s ground-breaking variable annuity experience studies. Analysis is detailed enough to be helpful when establishing assumptions used in financial modeling. Companies utilize these models to establish appropriate pricing, reserves, and capital. The analysis will include the impact caused by living benefit riders, distribution channel, product bonuses, time period, duration, age, and policy size.
Jan Soppe of Strategic Health Management authored an article in the October 2010 issue of Life Insurance Selling that discussed the path to success for Combo products, addressing annuity & long term care combos as well as life insurance & critical illness combos. The article can be accessed here:
Combo Products: Where is the Path from Potential to Reality
Ruark Consulting works with Strategic Health Management to provide the necessary combo product expertise to our clients, naturally aligning our annuity and life insurance knowledge with Strategic Health Management’s long term care and critical illness knowledge. Let us know if you’d like an introduction to Jan and her colleagues.
Tamiko Toland of Annuity Insight has issued an analysis called “Shifting Risk: Hints of Reinsurance Resuscitation”. She discusses the evolving state of the variable annuity reinsurance marketplace. Ruark Consulting’s article “State of the Variable Annuity Reinsurance Market in 2010” is referenced. Rich Tucker is quoted as “I think insurance companies had forgotten that reinsurance is another tool because supply has been very difficult to come by. It’s still not cheap and it’s not able to fulfill all the risk management demands of the industry (not even majority at this point), but why not blend it in as a second risk management strategy when it is available?”
“The reports of my death have been greatly exaggerated.” – Mark Twain
Reinsurance for variable annuity guarantees (VA GMxBs) has often been characterized as unavailable over the last few years. In fact, this is not the case. Reinsurance is available, but the terms required by reinsurers are often inconsistent with the pricing of direct writers. Success with VA reinsurance requires an understanding of the critical reinsurance design points discussed below.
Ruark Consulting has released our major benchmark Variable Annuity Benefit Utilization Study. Please view the press release below for additional information.
Variable Annuity Benefit Utilization Study (Press Release)
The media has shown interest in the Variable Annuity Benefit Utilization Study. Noteworthy articles include:
National Underwriter
Rich Tucker was quoted in a Bloomberg News article, dated January 8, 2010, that discussed the emergence of Athene Life Re as a reinsurer focused exclusively on fixed annuities. A link to this article in Business Week follows.
Black’s Apollo Targets Fixed Annuities With Bermuda Reinsurer
The high capital requirements of traditional fixed and fixed indexed annuities must be managed carefully. Reinsurance is a major management tool. Inforce blocks of business can be reinsured to manage current capital levels. Apply reinsurance to new business to manage to your desired capital levels on an ongoing basis. Instead of restraining sales to manage capital levels, reinsurance allows you to continue to support your distribution channels by allowing them to sell the volume of new business desired and providing them with the variety of products needed. The insurance company can diversify their accumulation business among traditional fixed, indexed, and variable annuities.
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