A strategy of aggressively marketing its financial strength under banners such as “Built For Times Like These” and “Guarantees Matter” paid off for New York Life (NYL) in 2009.
For the US’ largest mutual insurer it was a year of record insurance sales, which increased by 11% compared with 2008 to $2.66bn. US life insurance sales provided the biggest boost, increasing 14% in 2009 compared with a 15% fall in the life industry’s individual life sales reported by financial services organisation LIMRA.
“Consumers have clearly come to appreciate that it matters who provides their family’s protection,” commented Ted Mathas, NYL’s chairman, president and CEO. “They want an insurer with a track record of providing long-term guarantees.”
He added that of 1,000 life insurers in the US, NYL is one of only three with the highest possible ratings from all four major rating agencies.
NYL’s success in 2009 was not limited to insurance sales. Investment sales were also strong, increasing by 22% compared with 2008 to $32.9bn. Assets under management increased by 15% to $286bn, a new record for the insurer.
On the profitability front NYL put in a strong performance, reporting operating earnings of $1.2bn, down 4.7% from a record $1.3bn in 2008. This was the fourth consecutive year that NYL’s operating earnings exceeded $1bn.
“The company’s operating earnings have remained basically flat throughout the financial crisis, a reflection of how we manage the company for long-term strength,” said Mathas.
He added that the two-year median decline in operating earnings for NYL’s peer competitors was about 45%.
According to NYL, its peer competitors comprise 13 mutual and publicly-traded domestic life insurers. The 13 are its largest competitors and share similar profiles to NYL with respect to markets served, products offered and distribution methods.
In its home market NYL’s distribution is spearheaded by its agency channel which boasted 11,800 licensed agents at the end of 2009, 15% more than in 2005. In 2009 US insurance sales through NYL’s agency channel grew by 16% to a record $805m.
In its foreign operations, NYL had 82,000 career agents in the field at the end of 2009 with its joint venture in India, Max New York Life, accounting for about 85% of this total. NYL’s other foreign operations are located in Argentina, China, Hong Kong, Korea, Mexico, Taiwan and Thailand.