Northwestern Mutual Named Top "Traditional" Life Insurance Company in New Survey

Strategic Insights -

Northwestern Mutual has been named the top "traditional" life insurance company in a recent survey of industry executives, according to a report by Tillinghast - Towers Perrin. The survey, conducted in April and May, included CEOs of 343 of the largest life insurers in the United States and Canada, with individual life and annuity reserves ranging from about $200 million to well over $10 billion. Chief executives of the nation's largest life insurance companies cited Northwestern Mutual as the company best positioned to meet the major challenges facing the industry, with Fidelity Investments named as the top "non-traditional" company.

Key Takeaways:

  • Northwestern Mutual was named the top "traditional" life insurance company for the second time, citing its financial strength, low-cost operations, and productive distribution system.
  • 96% of executives predict that legislative restrictions on "banks in insurance" will be relaxed in the next three to five years, allowing banks to compete on a level playing field with insurers.
  • Nearly 90% of CEOs believe that the primary change to the competitive structure of the life insurance industry is the growth of non-traditional competitors, up from 68% in 1993.
  • Insurers are exploring alternative distribution channels, with nearly a third of the surveyed insurers exploring new distribution methods.
  • Small and regional insurers are likely to be the "losers" in the industry, with many of these companies saddled with high-cost operations, a lack of market focus, and traditional distribution systems.
  • Two-thirds of the respondents cite "better service" as the primary way to satisfy customers, with 80% trying to provide better service by centering selling efforts on particular market niches.
  • Insurers are well behind their financial service counterparts in terms of market focus, with many continuing to define their markets very broadly.

Statistics:

  • 96% of executives predict that legislative restrictions on "banks in insurance" will be relaxed in the next three to five years.
  • 96% of executives expect banks to be amongst the fastest growing forms of distribution for life insurance and annuities.
  • 80% of respondents are trying to provide better service by centering selling efforts on particular market niches.
  • 67% of respondents cite "better service" as the primary way to satisfy customers.
  • 29% response rate from CEOs of the 343 surveyed insurers.
  • 342 Life insurance companies with individual life and annuity reserves ranging from about $200 million to well over $10 billion.

Sources:

  • Tillinghast - Towers Perrin survey (no date)
  • Tillinghast - Towers Perrin CEO Survey Report (1995)
  • Elizabeth Bliss, 212/840-1661 (for a copy of the report)