5 Senior Market Distribution Veteran Insights

JANUARY 22, 2018

By Allison Bell Insurance Editor

Each product has its own drivers

Denis Tauscheck (Photo: Integrity)

Integrity Marketing Group L.L.C. made news earlier this month by announcing that it had acquired Neishloss & Fleming Inc., a longtime Medicare plan distributor.

(Related: Integrity Marketing Group Acquires Neishloss & Fleming)

Integrity itself is a Dallas-based company that focuses on distributing a wide range of life insurance products, health insurance products and other products aimed at older consumers.

Integrity was founded in 2006 and now has relationships with about 120,000 independent agents and brokers.

Japan’s population got old early. It may be where the United States will be in five years or so.

Denis Tauscheck, the company's chief revenue officer, said his company looks for relationships with other companies that try to do right by the insurers, the agents and the consumers.

"It's got to be the right fit," Tauscheck said today in a telephone interview.

Tauscheck himself spent some time as an actuary at Aviva's North American operations, then served as a senior vice president and actuary at National Guardian Life Insurance Company. He joined Integrity in 2014.

Tauscheck's position gives him a broad perspective on what's happening in the U.S. senior market.

Here are five of his observations about the market, drawn from today's interview.

1. The Medicare Advantage market is still maturing.

Today, agents coping with the turmoil in the individual major medical market may see the Medicare Advantage market as a refugee. But that market is still rebounding from the turmoil it faced in the late 1990s, when federal subsidy cuts chased major carriers from that market.

Tauscheck said he sees that market continuing to evolve.

The news that Mutual of Omaha will be entering the Medicare Advantage market "brings a lot of credibility to that space," Tauscheck said.

2. Producers are broadening their Medicare plan horizons.

Japan’s population got old early. It may be where the United States will be in five years or so.

A few years ago, many agents liked selling Medicare supplement insurance plans.

Some Medicare specialists avoided selling Medicare Advantage plans and Medicare Part prescription drug plans, in part because of concerns about the extra layers of regulation associated with those products.

These days, "that has changed dramatically," Tauscheck said.

Producers tend to sell all three types of products, to increase their ability to help more customers, Tauscheck said.

3. Long-term care insurance (LTCI) could still come back.

LTCI issuers continue to wrestle with the problems caused by bad policyholder behavior assumptions in the past, and low interest rates today, but the need is still there, and the policyholder-owned mutual insurers seem to be doing better in the market than the publicly traded issuers, Tauscheck said.

"I think you will see a recovery in that market as interest rates rise," Tauscheck said.

4. New agents and brokers might consider starting by selling simpler products.

Integrity operates mainly in highly competitive markets, in which insurers compete vigorously for sales and still need to work with agents.

Tauscheck said he thinks new agents might want to begin by offering funeral insurance, which is a simple, affordable product that serves an obvious need.

5. Each product has its own unique tailwinds and headwinds.

The aging of the baby boomers should help sales of senior market products, Tauscheck said.

In theory, senior market products could be less interest-sensitive than products for younger customers, because older customers tend to have fewer years of life expectancy, and the products they use may have a shorter duration than the products younger consumers buy.

In the real world, however, 70% of the pre-need funeral products purchased are single-pay products, and issuers have had to increase prices to cope with the effects of low interest rates on those products, Tauscheck said.

Outsiders might think that demand for senior market funeral insurance market might be relatively stable, because consumers in the senior market know there will be a need for an end-of-life event.

Demand has actually changed, Tauscheck said, because more people want to be cremated when they die, and fewer are going to funeral homes to plan their funerals. 

http://www.thinkadvisor.com/2018/01/22/5-senior-market-distribution-veteran-insights?page=2