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PRODUCTION RESULTS UPDATE!!!!!!!!!!!
Last month we reported that while we were having a very good year we were having a difficult time keeping up with last years 35% growth rate. We also said that we hoped that would change in July and we are pleased to report that indeed it did. July turned out to be the highest paid premium month we have ever had with Union Central. As a result of this record month we are now ahead of where we were at the same time last year. Having passed that threshold we will concentrate on growth the rest of 2008 with your help.
In spite of the economy along with the uncertainty of who will lead our country after the fall elections, we are encouraged by the level of quote activity and sold cases that continue to come in. We are very pleased with the results that all of you have put up so far this year and we look for a big finish in the final five months of 2008. Thank you for all you do for us.
As we said last month our production with our other carries has already exceeded the total premium we paid with them in 2007 and we expect that number to continue to grow. We are looking at somewhere in the 70% growth in our ancillary lines, so once again we appreciate you brining all your DI prospects to us as there isn't a DI need we cannot cover.
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As some of you know Pam had hip replacement surgery this week and we wanted to let you know that she came through that fine and is at home recuperating. Anyone who wishes to send a card to Pam may do so via our office and we will see that she gets them. We look forward to having her back in the office in three to four weeks. In the mean time all of us here will continue to provide the high level of service you have come to expect from us.
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Industry Updates and Trends:
The disability industry has had relative peace for several years now, following so many companies leaving the business starting in the late 1980's and ending last year with the exit of Pan American. While we have had many companies leave the disability business we have not seen new companies or even old companies getting back in.
Just in terms of a history lesson here are some of the companies who have left: Macabees, Monarch, Equitable, New York Life, Mutual of New York, Minnesota Mutual, Mass Casualty, National Life of Vermont, Paul Revere and Provident are now part of UNUM, and so many others. The trend led away from own occupation definitions, especially in medical and dental professions. Another trend was away from high issue limits as well as lifetime benefits.
Today we see companies moving back to own occupation definitions, and revising issue and participation limits upwards. After 10 years of the industry being in the red it seems like the profits have returned due to better risk management and that is a trend all of us are hoping will continue.
Today no one company is way out there doing things like many were doing in the 1980's when the risk envelope kept getting pushed to the breaking point and the claims came in during the 90's and lasted for a decade. It seems like most companies today are approaching disability with some common sense.
There has been some innovation in terms of CAT riders, and covering retirement contributions but overall the industry has been providing the basics in income protection, buy out coverage, and paying overhead expenses. We do not look for this to change in the future and one major reason for that is there are only two re-insurance companies that are still in the disability business, and companies offering disability products are with one or the other and sometimes both. One of those companies is owned by Warren Buffet, and we know he likes to make a profit; so I guess the trend is steady as she goes, but that is a good thing for the clients as pricing has stabilized, issue limits are rising slowing, and the industry has returned to profitability so the companies that are in should stay in and perhaps we will even see some that exited return to write again.
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