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MIB Life Index Reports U.S. Life Insurance Activity up 1.4% in 2012

Index cautiously turns the corner

BRAINTREE, Mass., Jan. 25, 2013, Strength in the first half of the year was sustained in the closing quarters of 2012 driving the MIB Life Index up +1.4% YTD as compared to last year, all ages combined. After bottoming out in 2008, this year’s annual gain in U.S. individual life insurance application activity represents the culmination of a slow, but steady recovery. Year-to-date growth was shared by all age groups, but waning end-of-year activity, particularly in December, could be cause for concern heading into 2013.

“We are very encouraged by the overall positive growth, however we remain cautiously optimistic as growth early in 2012 predominated this year’s results,” said Lee Oliphant , MIB Group’s Chief Executive Officer. Flat December activity for the composite Index, up only +0.3% year-over-year, was further evidenced by sluggish activity in ages 60+ (a key Index driver) up only +1.5% in what is normally a high-performing, double-digit month. Superstorm Sandy wreaked havoc with many insurers’ operations and agent activity in the Mid-Atlantic and Northeastern U.S. late October, which may account for the tame fourth quarter.

Life insurance application activity grew across all three age groups in 2012 with ages 0-44, up +1.0%; ages 45-59, up +0.5%; and ages 60+, up +4.8% YTD as compared with last year. December’s activity was mixed and diminished overall with ages 0-44 up +0.5%; ages 45-59 off -0.6%; and ages 60+,up +1.5%, year-over-year. A retrospective six-quarter analysis (Q4, 2012 – Q3, 2011) shows application activity climbing in Q3 2011 to a peak at the end of Q1 2012 and then waning over the remaining quarters. The most notable trend shifts for 2012: modest growth in ages 0-44 (positive 7 of 12 month) after literally years of decline; nascent strength in ages 45-59 (positive 5 of 12 months); and slowing momentum ages 60+ (evidenced by 2-3% YTD declines in growth from 2009 to 2012). Modest Q4 performance in 2012 for ages 60+ may be related to uncertainty in the estate tax exemption which was settled in the closing days of December.

“This is the first time we’ve seen positive numbers in the ages 44 and below market, but it’s far too early to understand if these trends will endure. This 1% gain on the year may signal ground gained on the industry’s marketing challenges, but again we remain cautious,” says Oliphant.

Review all the 2012 industry trends in detail by registering for MIB’s 2012 Life Index Annual Report (free) at www.mibsolutions.com/regLI or login at www.mibsolutions.com/loginLI.

Monthly Percent Change
(2012/2011)

Dec. 2012

+0.3%

Nov. 2012

-0.8%

Q4 – 2012

+0.8%

YTD 2012

+1.4%

Monthly Percent Change by Age

(2012/2011)

Dec. ’12

Nov. ’12

Oct. ’12

2012 YTD

0 – 44

+0.5%

-0.2%

+2.1%

+1.0%

45- 59

-0.6%

-2.2%

+2.2%

+0.5%

60 +

1.5%

-0.2%

+6.6%

+4.8%

 

U.S. Monthly Percent Change
vs. Prior Month

Dec. 2012

+0.1%

About the MIB Life Index
The MIB Life Index is the life insurance industry’s timeliest measure of application activity in the United States. Released to the media each month, the Index is based on the number of searches MIB life member company underwriters perform on the MIB Checking Service database. Since the vast majority of individually underwritten life premium dollars in North America include an MIB search as a routine underwriting requirement, the MIB Life Index provides a reasonable means to estimate new business activity. For past releases, methodology or to subscribe visit www.mib.com/lifeindex.

About MIB
MIB is the life and health insurance industry’s most trusted resource for risk information and analytical services. Owned by the industry it has served for more than a century, MIB is uniquely positioned to aggregate industry insights in order to develop products and services for our members that improve their risk assessment. MIB, Inc. and MIB Solutions, Inc. are wholly-owned subsidiaries of the MIB Group, Inc. (www.mib.com and www.mibsolutions.com).

Contact:
David O. Aronson
MIB Group, Inc.
781-751-6330
daronson@mib.com

SOURCE: MIB Group, Inc.

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Manulife Financial, John Hancock Investor Sentiment Surveys: Affluent North American Investors Believe They Are Financially On Track

  • Affluent Canadian and American investors optimistic about the future
  • Seventy per cent of affluent North American investors on track to meet financial goals
  • US investor sentiment holds steady while Canadian sentiment rises
  • Canadians and Americans aligned in financial New Year’s resolutions and priorities

TORONTO, Jan. 21, 2013, Affluent North American investors are feeling very optimistic about their personal finances heading into 2013. Seventy per cent of affluent investors in both Canada and the United States agree that they are either ahead of plan, or on track, to meet their personal financial goals and about 50 per cent anticipate that their financial position will improve over the next two years.

Six out of ten affluent Canadian and American investors say that they are on track to meet their current financial goals while roughly 10 per cent say that they are ahead of plan on their goals. Just one in five investors surveyed in both countries indicate that they are behind on their financial goals but they are likely to catch up.

“It’s positive to see that, despite ongoing news about the fiscal cliff, global debt and U.S. debt ceiling, economic uncertainty and other challenges, our surveys indicate that affluent North American investors are feeling very confident about their financial future,” said Paul Lorentz , Executive Vice-President, Investment and Insurance Solutions for Manulife Financial.

The findings are derived from a comparison of the results of the latest Manulife Financial and John Hancock Investor Sentiment Index surveys. The surveys – conducted in Canada and the U.S in December 2012 – measure affluent investors’ feelings about whether or not this is a good time to invest in a variety of savings and investment vehicles and the likelihood of purchasing specific financial products and services.

Investor sentiment differs in North America
In Canada, overall affluent investor sentiment index strengthened in the second half of the year, rising to +31, from +26 in January 2012. In the U.S., investors’ confidence held steady in the fourth quarter of 2012, with the John Hancock Investor Sentiment Index® ticking upward slightly to +18 from a score of +17 in the third quarter of last year.

New Year’s resolutions, financial priorities aligned
Other findings from the surveys show that Canadians and Americans are aligned in their financial New Year’s resolutions and how they plan to achieve their top financial goals.

  • In Canada (31 per cent) and the United States (29 per cent), the top financial-planning related New Year’s Resolution is to trim household budgets.
  • Rebalancing portfolios is the second top resolution for 19 per cent of Canadians and also for 19 per cent of Americans.

Top financial priorities for 2013 among affluent Canadians and Americans differ slightly.

  • Canadians’ top three priorities are to manage/maintain current lifestyle (32 per cent), pay down debt (18 per cent) and save for retirement (15 per cent).
  • American respondents say their top financial priorities are the same: however, they differ in order with maintain/manage their current lifestyle (35 per cent) topping the list followed by, saving for retirement (29 per cent) and paying down debt (11 per cent).

Similar steps to achieving financial goals
When asked what steps, if any, affluent investors are taking to achieve their financial goals, Canadians and Americans identified the same top four steps. However, these steps varied in terms of priority.

Percentage of Affluent investors that indicated what steps they have taken to achieve their financial goals:

Step taken

Affluent Canadians

Affluent Americans

Talked to a   financial
professional for advice

45%

40%

Saved a certain   amount on
a regular basis

41%

59%

Reduced spending

40%

45%

Calculated how much
money needed to achieve
goal

27%

41%

Seven in ten affluent Canadians work with a financial advisor to achieve their financial goals while in the U.S., five in ten affluent investors choose to seek professional financial advice. However, affluent investors in both countries indicated that they work with advisors for a similar reason. Seeking advice on how to get better returns is the main reason for Canadians (24 per cent) and Americans (56 per cent) to work with a professional financial advisor.

“We encourage people to work closely with an advisor and stick to a financial plan,” Mr. Lorentz added. “People with integrated financial plans, working with strong, reliable and trustworthy companies, generally feel better prepared for the future, are more confident about reaching their goals and are better equipped deal with the ups and downs in the economy.”

In both countries, those who do not work with a financial advisor say it is because they feel knowledgeable enough to manage their investments on their own (Canada, 26 per cent, U.S., 43 per cent).

About the Investor Sentiment Index Surveys
Both Investor Sentiment Index surveys are conducted in a similar fashion. The survey measures affluent investors’ feelings about the current economic climate and their evaluations of what represents a good or bad investment given the current environment. The poll also asks consumers about their confidence in reaching key financial goals and the likelihood of purchasing financial products and services.

An online survey of 1,127 investors was conducted in the U.S. between November 26th to December 7th. In Canada, a sample of 1,003 investors were surveyed between November 30th to December 8th. Both surveys included household decision-makers at least 25 years of age, with a household income of $75,000 or greater and investable assets of $100,000 or more.

The Canadian research was conducted by Research House, an Environics Company. The U.S. survey was conducted by independent research firm Mathew Greenwald & Associates.

In a similarly-sized random sample survey, the margin of error would be plus or minus +/- 3.10 percentage points at the 95% confidence level.

About Manulife Financial
Manulife Financial is a leading Canada-based financial services group with principal operations in Asia, Canada and the United States. Clients look to Manulife for strong, reliable, trustworthy and forward-thinking solutions for their most significant financial decisions.

Our international network of employees, agents and distribution partners offers financial protection and wealth management products and services to millions of clients. We also provide asset management services to institutional customers. Funds under management by Manulife Financial and its subsidiaries were C$515 billion (US$523 billion) as at September 30, 2012. The Company operates as Manulife Financial in Canada and Asia and primarily as John Hancock in the United States.

Manulife Financial Corporation trades as ‘MFC’ on the TSX, NYSE and PSE, and under ‘945’ on the SEHK. Manulife Financial can be found on the Internet at manulife.com.

About John Hancock
John Hancock Financial is a division of Manulife Financial, a leading Canada-based financial services group with principal operations in Asia, Canada and the United States. Operating as Manulife Financial in Canada and Asia, and primarily as John Hancock in the United States, the Company offers clients a diverse range of financial protection products and wealth management services through its extensive network of employees, agents and distribution partners.

The John Hancock unit, through its insurance companies, comprises one of the largest life insurers in the United States. John Hancock offers a broad range of financial products and services, including life insurance, annuities, fixed products, mutual funds, 401(k) plans, long-term care insurance, college savings, and other forms of business insurance. Additional information about John Hancock may be found at johnhancock.com.

SOURCE: Manulife Financial Corporation

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Extravagance Over Necessity Concerns Financial Experts

LONDON, January 11, 2013,

A lot of people live under the illusion that life insurance is an expensive luxury that saps funds from other more pressing purchases, although it has recently come to light that members of the public are still spending large sums of money each year on holidays, fashion, style, food and drink, entertainment and technology.

It’s only natural that people’s priorities fluctuate and vary in a changing world, but experts are concerned that life insurance should be seen as a luxury rather than an essential when so many of the perceived essentials might just as easily be considered luxury items.

In a few weeks’ time, life insurance premiums will rise in line with the EU Gender Directive but until then members of the public may be able to take advantage of much more favourable rates. The date the new strategy comes into effect is December 21st and countless people have already contacted specialists like Lifebroker in order to get a policy sorted out in good time.

The team at Lifebroker is committed to finding the best deals on life insurance for its customers and now is definitely a crucial time for reassessing where the genuine priorities lie. Specialists are encouraging households to ask themselves whether they couldn’t afford life insurance simply by saving a little money on the luxuries here and there.

Financial advisers recognise that life insurance is an important part of protecting the family. A life insurance policy ensures that debts and mortgage repayments can be addressed when the policy holder dies, meaning that dependents are shielded from having to pick up the pieces. Specialists also stress that life insurance is actually a cheap and fundamental part of life’s administration.

This is something that the professionals are always keen to convey to their customers and the EU Gender Directive simply adds a greater sense of urgency to the situation, giving members of the public a very real time scale in terms of making savings on a real life essential.

SOURCE: Lifebroker

 

 

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