by John Darer CLU ChFC CSSC RSP
One aspect of the withdrawal from the market of Aviva and last quarter's downgrade of Hartford that has yet to be commented on publicly is that the normal "rhythm" of business has been disrupted for the surviving markets, brokers and stakeholders all the way down the food chain. Those surviving markets are now flooded with new business opportunity yet seem to be attempting to handle this with the same relative amount of staff. The result is that the sales cycle must be extended, turnaround expectation on such quotes must be adjusted and such expectations must be related to clients and, in some cases (from a post settlement standpoint), the courts.
How can these processes be streamlined in the wake of market developments?
The structured settlement departments of these life insurance companies are encouraged to hire and train additional staff and/or provide appointed brokers with reasonable estimates. Assuming the capacity is there it would seem worthwhile to both the markets and the brokers to collaborate and come up with a solution.
On the other hand it is possible that one or more of the companies now rated A ( Excellent), who may be less busy, could capture a competitive service advantage.
Post Script: One annuity issuer issued a memo late today that it will now take approximately 4 months to issue a contract. Others are encouraged to issue their own memos on the topic with a hopefully shorter time frame!.
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