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In one of his first acts as the chief executive officer and managing director of the Caribbean Designate, Bill Shultz launched Pan American Life Insurance Group’s latest insurance product offering to the market. Called “Life Access”, Shultz said there is nothing like the product currently in T&T.
Shultz, along with Bruce Parker, senior vice president of Global Life Insurance, and Robert DiCianni, senior vice president of International Business, were on hand to talk to the Sunday Business Guardian about Life Access and Pan American’s presence in and plans for the local market. Parker explained that “Life Access” was the first US-dollar denominated universal life policy. Universal life, he told Sunday BG, was a true life insurance policy with a built-in level of flexibility.
“Unlike a traditional whole life policy which many people are familiar with, with a universal life policy you can adjust the face amounts. So if you start out with US$100,000 of face amount and your family grows, you can increase that product from US$100,000 to US$200,000. Instead of buying a whole other policy, you now have one policy that can be adjusted up.”
The premiums—payable in US dollars—can also be adjusted downwards, if the policyholder’s circumstances change. The other benefits of the product include the ability to access cash value without penalty and a guaranteed interest rate of one per cent. The executives revealed that the policy’s launch interest rate is 3.75 per cent. Both cash value and death benefits are paid in US dollars.
Policyholders are also able to make higher contributions than their actual premium, allowing “Life Access” to be used as “an alternative type of investment,” according to Parker. Shultz said the product was designed for an emerging affluent business owners market, but could be adapted to suit a wide variety of circumstances.
“The young guy who is trying to save for his children’s education, people who are saving for retirement, people who want a little bit of life insurance, but not as much cash build up. There is much that can be done with this programme.” The Life Access product is only the latest in a series of innovations the executives said have brought the company great success within the local market.
Parker listed some of their more successful items since the company took over operations from MetLife in 2012 as being their major medical programme—Private Client Health—which, he said, is aimed at the higher end of the market. He added that Pan American’s term life was also a very good seller. Their critical illness programme, while not as popular as the others, was also doing well.
The executives told the Sunday BG that the company planned to focus on increasing its penetration into the local market, where they saw opportunities for further growth.
Shultz said: “There is a great opportunity for us to grow the business here, to increase the penetration in Trinidad. Because if you do look at and compare it to some other countries, penetration isn’t as great. Some of the products are outdated. That’s the reason why we develop new products and offer them to the community. Despite the fact there are significant amount of people with life insurance coverage, I think there is still an opportunity to broaden that and to appeal to a wider market.”
The Caribbean area represents 12 per cent of Pan American’s group business. It is the second largest grouping in terms of business for the group. The T&T market makes up six per cent of Pan American’s total business. Shultz said this was why increased penetration was so vital, since the region represented a smaller percentage of overall business to previous owners.
Robert DiCianni, senior vice president of International Business, underscored the importance of the development of new business in T&T and the wider Caribbean to the health of the Pan American. “We can’t be successful on a group level, if we are not successful here.” The executives said currently, their local insurance portfolio is divided into thirds: between life, annuities and personal accident coverage and that they are satisfied with this mix.
Shultz told the Sunday BG that the company hoped to maintain the division since it offered them an advantage in the especially crucial middle market. The executives noted that Pan American was entering a new phase, where there was a distinct possibility that of making new acquisitions. The executives’ response was guarded, though, on the likelihood of acquiring Clico’s traditional insurance policy portfolio, which is being sold for value by the Central Bank.
In answer to the Sunday BG’s question on the issue, the executives only said: “We are looking into it”. They were also supportive of efforts by government to reform insurance legislation. They admit that they have seen the legislation and have made contributions to its development. The Pan American executives told the Sunday BG that the law, “was a work in progress” but could be expected to benefit both consumers and companies when it was passed.