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How Should Advisors Respond to Carriers Offloading Life & Annuity Blocks?

Nov 9, 2021 8:00:00 AM

Mergers and acquisitions have always been common within the life insurance and financial services industries. But recently, the trend has seemingly accelerated, particularly among carriers who are offloading their life and annuity business to private equity and venture capital firms. Recent examples include: Allstate, Voya, Allianz, Hartford Financial Services Group, Prudential, and Principal Financial Group.

While there are many different ways to analyze this ongoing trend, and certainly much room for debate and difference of opinion among advisors who work with clients that depend on their life insurance coverage, for me it matters less whether you believe these sales are a good thing or a bad thing. Because as it stands, we have yet to see whether this becomes something that benefits or detriments policyowners and their beneficiaries.

To me, it’s clearer now more than ever that the best thing a producer can do for their clients is to stay informed. And not just on carrier activity. It’s essential that producers are monitoring policy performance for their clients, too. We don’t know yet how carriers offloading their life and annuity blocks to PE & VC firms will affect fee structure on policies, so we’ll need to keep our ears to the ground so that we can be proactive in communications with our clients should any material changes be coming.

My advice to producers and advisors who are concerned about who actually owns their clients’ life policies can be summarized pretty easily. Don’t panic; stay informed. And staying informed is simple when you use a system like Proformex for centralized visibility of your life insurance business. See everything you’ve sold in one place and monitor those policies’ performance relative to your clients’ changing needs and objectives and evolving industry trends to ensure you have time to act before it’s too late to keep your clients’ coverage in check. Visit our website to learn more about our life insurance service platform and how it can support you.


Written by Mike Pepe

Mike Pepe capitalized on 20 years of life insurance expertise by launching Proformex, a life insurance servicing platform that helps advisors, brokers, and carriers service clients better. Proformex delivers multicarrier visibility, collaboration, and performance reporting in a single, secure system.

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