What Do Insurance Company Leaders Fear?
By Dean Lambert, Executive Director, LIC
According to the 2023 CEO Outlook Report from KPMG, geopolitics and political uncertainty are the leading risks of concern to CEOs. Of note, neither of these were considered in the top five in KPMG's 2022 study. The sample group consists of 1,300 CEOs whose companies have annual revenues greater than $500M in a variety of sectors that include insurance.
So, What Do You Think?
The reason I ask is to generate some thought about whether you feel your small- to medium-sized organization may be insulated from some of the problems larger insurers face. What are the impacts of geopolitics and political uncertainty...
Wishing You and Yours Peace and Joy
During the holiday season we are reminded of how lucky we are to serve this industry by helping small- to mid-size life insurers improve performance through shared excellence. Thank you for your participation and support. We wish you all the best throughout the holidays and the new year!
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Industry News
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LIC Member Companies Represented on 2024 LIMRA and LOMA Board
During the 2023 LIMRA Annual Conference, LL Global, the parent company of LIMRA and LOMA, announced 10 new Board members including executives from several LIC Member companies:
- Vice Chair Carolyn Feeney, Executive Vice President and CEO, U.S. Business, Prudential Financial
- Rob Arena, Co-President and Head of Individual Markets, Global Atlantic Financial Group
- Ron Herrmann, Executive Vice President and Head of RGA Americas, Reinsurance Group of America, Inc.
Read about all 10 new Board members in the press release linked below.
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Koron Named VP of First Consulting, President of AICP
First Consulting announced in November 2023 the hiring of Stacy Koron as Vice President. Stacy will be responsible for directing First Consulting's product development and drafting services for all lines of business and all U.S. jurisdictions. In addition Stacy was recently elected President of the Association of Insurance Compliance Professionals (AICP).
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December 14 Webinar Offers NAIC Updates
Clearwater Analytics is conducting a webinar at 12-1:30 p.m. Eastern on December 14, 2023. Titled "NAIC Investment Updates: Fall 2023 National Meeting Overview," the webinar will provide 1.5 CPE credit.
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How To Kick Off a PAS Modernization Project
Equisoft has published a new eBook to find out how conducting a detailed discovery, defining granular scope, and setting clear priorities can help de-risk potential hazards of a policy administration system modernization project.
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Trunzo Reflects on Leading TruStage through Transformation
In a December 7, 2023, interview with McKinsey's Ari Libarikian, recently retired TruStage CEO Bob Trunzo discusses his career journey, tips for emerging CEOs, and experiences in digital transformation.
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Individual Annuity Sales Expected To Exceed $350B
For the second consecutive quarter, registered index-linked annuity (RILA) products set a new sales record, according to LIMRA's Third Quarter 2023 U.S. Retail Annuity Sales Survey. LIMRA is forecasting total annuity sales to exceed $350 billion, more than 10% higher than the record set in 2022.
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Life Insurance Sales Down in Q3, Says Wink
InsuranceNewsNet recently covered highlights of Wink, Inc.'s quarterly Sales and Market Report for the third quarter of 2023, indicating a continuing trend of depressed life sales.
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Why Retirees Need MYGAs
ThinkAdvisor's Allison Bell interviewed Bryan Pinsky, President of Individual Retirement at Corebridge Financial, on the health of the multi-year guaranteed annuities market and why this product is critical for retirement savers.
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Milliman Examines Life Insurance Risk, Capital, and Asset-Liability Management in the Age of Uncertainty
Milliman has published a white paper examining how the insurance industry is responding to the fast-evolving world based on conversations with life insurers, focusing on implications for capital management, asset-liability management, and risk-management practices.
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Upcoming LIC Events
LIC Winter CEO Forum
Reserved for Insurance Company CEOs & Presidents
The Westgate Hotel, San Diego
February 6-7, 2023
LIC Annual Conference
The Westgate Hotel, San Diego
February 7-9, 2024
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LIC 2023 Premier Sponsors
Many thanks to the following companies! As LIC Premier Sponsors, they support all LIC events throughout 2023.
Parkway Advisors
Parkway Advisors is focused on being the best most respected provider of service in the insurance industry. Parkway offers asset management, consulting, and statutory investment reporting services that are customizes to the needs of each insurance client. Through Parkway's emphasis on personal service, custom solutions, and strong communication, our clients have enjoyed historically strong performance success, especially during the financial crisis and the low interest environment that has followed. www.parkwayadvisors.com
iPipeline
iPipeline is a leading provider of low code, cloud-based software solutions for the life insurance and financial services industry. Through our SSG Digital, end-to-end platform, we provide process automation and seamless integration between every participant in our ecosystem including carriers, agents, general agencies, advisors, broker-dealers, RIAs, banks, securities/mutual fund firms, and their consumers on a global basis. Our innovative solutions include pre-sales support, new business and underwriting, policy administration, point-of-sale execution of applications, post-sale support, data analysis, reporting, user-driven configuration, consumer delivery and self-service, and agency and firm management. www.ipipeline.com
Trilogy Actuarial Solutions
Let Us Be Your In-House Actuaries. We are a trio of actuaries with a combined 45 years of experience providing exceptional service to insurance companies, fraternal benefit societies, and marketing organizations. We can support your existing actuarial staff or serve as your entire in-house actuarial department. We understand the value of a dedicated in-house team and we will endeavor to replicate this experience for you. Our goal is to seamlessly integrate into your organization and culture. www.trilogyactuarial.com
thinktum
thinktum is a technology company with a strong commitment to innovation, leadership and a responsibility to give back to the communities in which we serve. thinktum's dimmpl platform offers modular InsurTech systems that support true end to end functionality via multiple distribution models. Whether it be face-to-face or non-face-to-face, affiliate or direct-to-consumer, dimmpl supports you from early prospecting straight through to policy delivery. www.thinktum.com
QLAdmin Solutions
QLAdmin Solutions is a leading technology partner for the small to mid-sized insurance company offering traditional life, health, annuity, preneed, final expense, and Medicare Supplement products. QLAdmin serves the entire policy lifecycle from new issue to termination with expert policy administration processing that is both comprehensive and easy to use. QLAdmin continues to evolve based on product and client needs ensuring extreme client longevity and satisfaction with QLAdmin products and support. QLAdmin is your proven partner in policy administration. www.qladmin.com
Equisoft
Equisoft is a business-first technology company dedicated to helping insurance and wealth management organizations reach their goals. Specialized expertise: Over 25 years of experience helping small and mid-sized life insurers & fraternals solve their biggest challenges through digital transformation. www.equisoft.com
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About The LIC Bullet
The Bullet is the official e-newsletter of the Life Insurers Council, which has been providing networking and practical business solutions for life insurers since 1910. As a council of LOMA, LIC serves the unique needs of small-to-midsize member companies, offering a personal network of peers with practical solutions to shared challenges. The Bullet delivers immediate and relevant industry news and editorial.
LIC E-News Online Community: As a networking organization, we welcome dialogue and input from our readers – therefore we are transitioning the Bullet to its new home in the LIC E-News online community at LICConnect. All Bullet subscribers have access to this forum, and others can request access by contacting lic@loma.org.
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Feature Article (Full Text)
What Do Insurance Company Leaders Fear?
By Dean Lambert, Executive Director, LIC
According to the 2023 CEO Outlook Report from KPMG, geopolitics and political uncertainty are the leading risks of concern to CEOs. Of note, neither of these were considered in the top five in KPMG's 2022 study. The sample group consists of 1,300 CEOs whose companies have annual revenues greater than $500M in a variety of sectors that include insurance.
So, What Do You Think?
The reason I ask is to generate some thought about whether you feel your small- to medium-sized organization may be insulated from some of the problems larger insurers face. What are the impacts of geopolitics and political uncertainty on your business, and how do these potential risks factor into your short- and long-term strategies? With all the challenges smaller companies inherently face, how broad is your view of external factors that may threaten your immediate and long-term success?
Not (Yet) a Priority for LIC Member Organizations
At the November 2023 LIC Enterprise Risk Management Conference Call, attendee-requested topics were void of any concern about business threats due to geopolitical distress. A common definition of ERM is "processes and procedures to identify, assess and manage risks such as cybercrime, brand reputation, certain technology integration such as AI, regulation, and investment risk."
While geopolitics and political uncertainty are not specifically part of the definition, each can catalyze cybercrime, disrupt AI-driven processes, and wreak havoc on the investment environment. Further, some may believe smaller organizations are insulated from geopolitical concerns due to corporate structure, location, even business category. It is possible certain organizations may experience delayed effects of world issues, but the ripple effects cannot be avoided. What about political uncertainty of the non- "geo" kind?
Domestic issues such as inflation, joblessness and heated election cycles can have immediate and lasting business effects. Often the focus within ERM is the risk itself. Is this enough? What can insurance company leaders do to ensure they understand causal circumstances, including tremors of geopolitical issues, that most certainly influence North American businesses?
Global Leaders' Perspectives
A June 2022 report from the global specialty insurer Beazley, titled "Spotlight on Geopolitical Risks," reported findings from a study of U.K. and U.S. business leaders. While most respondents felt able to manage current geopolitical risks, concerns about the possible consequences of war were rising compared to 2021 (prophetically), and inflation was a dominant concern. The report also found:
- Businesses urgently need to build resilience, as they currently face a high-risk/low-resilience geopolitical environment.
- Inflation is a dominant threat, with 55% of business leaders saying they lack the necessary resilience to deal with it. That figure rises to 65% in the US.
- The proportion of business leaders ranking war and terror as their top risk has spiked 46% over the previous year.
- Economic uncertainty has spiked 31% from the previous year.
- Risking prices and an unpredictable economic environment are driving instability and civil unrest, as has already been seen in Sri Lanka. Countries such as Egypt and Turkey could be vulnerable as well.
- U.S. business must deal with both unpredictability domestically due to rising gun violence, and a watershed in geopolitics as the country's relationship with Russia and China shifts.
- Business leaders need to better understand their geopolitical risks and seek to mitigate them where possible. Specialist political risk, trade credit and terrorism insurers can play a role in providing appropriate cover.
The ever-evolving world in which we live and do business requires more diligence-more resilience-than ever. Small- to medium-sized insurers and fraternals are no different than their larger counterparts in terms of risk. In the first half of 2023, cyberattacks on small businesses dramatically increased. Experts warn this trend will grow as small companies shift to the Cloud and adopt advanced technologies.
What steps, beyond supporting regulatory action and deploying technology, are you taking to ensure more efficient, effective risk mitigation? Recognizing the scarce resources of many LIC member companies, there are some things to consider:
- Do your risk and compliance leaders have a seat at the strategy table?
- Just as sales and marketing should be symbiotic, are your risk and compliance teams working seamlessly?
- How nimble can you be with capital decisions, especially when it comes to mitigating fast-onset risk conditions?
- Do you employ advanced analytics and automation so your people can focus on things that require human judgement?
- How are you promoting the importance of all employees, agents, and other operational stakeholders in risk awareness? What is your company's risk culture?
Questions like these will be part of the LIC conversation this year, beginning with the LIC Annual Conference February 7-9 in San Diego (www.loma.org/LIC2024). Will we see you there?
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