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.
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“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.
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By GlobalData“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.
