With CSO Tables Due Soon, Insurers Advised To Take Stock Of Products
By
New York
The development of new CSO Tables is an opportunity for companies to take stock of their product offerings and see how well the products fit, a Tillinghast-Towers Perrin executive told attendees gathered to hear about the impact of the new tables.
Noting the work that will be needed to integrate the new Tables into a company's product portfolio and the resources it will take to achieve that goal, Rick Berry, a principal in Tillinghast's New York office, says companies should rethink their products.
The "product rationalization" that Berry addressed includes goals such as rethinking product strategy and creating a better alignment of products with business strategy.
Business strategy, he continued, could address how products will be distributed and what markets are being targeted, he added. It could also entail filling gaps and eliminating redundancies, Berry said.
The new tables will lower reserves and the cost of insurance, he said, with the result that term insurance will be more competitive. There might be less of a need for rethinking charges and load structures and less of a need for offshore reinsurance solutions, Berry said.
During the seminar, the impact on products such as variable universal life was discussed. For instance, using a hypothetical VUL product as an example, Nancy Kenneally, a Tillinghast consultant, explained how the new CSO Table would, among other things, reduce the cost of insurance margins and could conceivably elminate maturity issues since a maturity age of 121 would be adopted under the new Tables (see NU, April 8.)
