Symetra Product Overview: Classic Universal Life w/Lapse Protection Benefit

Overview:

  • Prior to the rate revision, LifeTrends performed limited benchmarking on the Classic UL w/LPB product. When looking at lifetime solves, this product held a very narrow focus of competitiveness. After the revision, LifeTrends added the product to all three no-lapse guarantee scenarios (Lifetime, Age 100 and Age 90).
  • With this reprice, Symetra clearly defined their focus and niche in the no-lapse guarantee market. They expanded and improved their competitive positioning for both Lifetime and A100 solves, for all non-tobacco risk classes, ages 45 and above.For these solves, Symetra dropped their pricing about 10% on average. This was a very strategic pricing change that resembles a term pricing strategy. Symetra defined their niche, then took each cell and found the best priced premium in the market, then dropped their rates by only a few dollars (if that). The preciseness of this pricing strategy is even more pronounced when looking at guaranteeing to A100. It loses the competitive niche when limiting the guarantee below A100.
  • For short and single-pays, premiums dropped about 9%. Their current positioning with these solves are top to middle 2nd quartile from a ranking standpoint; this puts them behind the best priced product by roughly 25% to 30% in a majority of cells.
  • To entice producers, targets continue to be strong relative to premiums. While many no-lapse products struggle to bring their targets above 100% of full pay premiums, Symetra looks like they are enticing every agent they can with an average 120% ratio in the cells they are the most competitive. By not offering rolling targets, there is a danger of agents forcing early 2nd year premiums in the 1st year to regain their lost target surplus. Historically, this has appeared to be detrimental to this product, since it would hit cost tiers that kill the performance. We tested some younger and older ages; paying 2nd year premiums early didn’t appear to have much of an effect on the guarantee. The guarantee only dropped the lifetime (age 121) death benefit by a year or two. In fact, if you missed a premium altogether in year 3, 6, or 11, it performs slightly above average than the rest of the market, maintaining the guarantee to reasonable ages.
  • Overall, Symetra seems to have a very specific targeted competitive space that they want to claim. The exact pricing is odd, and it leaves us with a feeling of cautiousness, as it is unknown how long they can maintain their current pricing. Classic Universal Life with LPR is the least expensive product in their targeted area, it offers well above 100% of target to premium ratio, and it don’t appear as volatile as the past product’s structure garnered in reputation. See attached for more detail.
  • Cash surrender values are decent for a no-lapse guarantee product, falling middle of the pack from an accumulation standpoint.
  • Their previous single pay restriction of 7x target for ages 70+ was removed. The $1m annual premium home-office approval requirement still stands.

The attached standard analysis includes all of the products we benchmark (29/30 products considered):

  1. Old Ranking for $1,000,000 DB, NLG Lifetime (single, full and short-pay scenarios)
  2. New Ranking for $1,000,000 DB, NLG Lifetime (single, full and short-pay scenarios)
  3. Ranking Changes for $1,000,000 DB, NLG Lifetime (single, full and short-pay scenarios)
  4. Percent Premium is Above Best Rate for $1,000,000 DB, NLG Lifetime (single, full and short-pay scenarios)
  5. Percent Premium is Below Next Best Rate (when ranked 1st) for $1,000,000 DB, NLG Lifetime (single, full and short-pay scenarios)
  6. New Ranking for $1,000,000 DB, NLG A100 (single, full and short-pay scenarios)
  7. Percent Premium is Above Best Rate for $1,000,000 DB, A100 (single, full and short-pay scenarios)
  8. Percent Premium is Below Next Best Rate (when ranked 1st) for $1,000,000 DB, A100 (single, full and short-pay scenarios)
  9. New Ranking for $1,000,000 DB, NLG A90 (single, full and short-pay scenarios)
  10. Percent Premium is Above Best Rate for $1,000,000 DB, A90 Lifetime (single, full and short-pay scenarios)
  1. New vs Old Percentage Premium is Higher or Lower for $1,000,000 DB, NLG Lifetime (single, full and short-pay scenarios)

Data was updated on the LifeTrends website on Wednesday, February 12th, 2014.