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Last week we, like much of the insurance industry, were shocked to learn that the Shenandoah Life Insurance Company entered receivership.  Shenandoah Life, like AIG and other distressed companies, lost a significant amount of its value from the decline in its mortgage related investments.  

At PSM our diverse portfolio includes more than 25 insurance carriers, so our business will see a minimal impact from this latest industry development.  However, like many of you and your clients, we are now questioning our past assumptions as to which companies are truly stable. 

Recently, Mutual of Omaha sent out a report to its customers conveying information regarding its financial stability as a means of reducing any fear or doubt.  Here are a few key highlights from the report:

* $2.2 billion in statutory surplus

* $1.5 billion in cash flows generated each year from investments

* Only 1% of investment portfolio exposed to subprime collateral

* Only 4% of fixed income portfolio exposed to financial industry debt

* 80% of portfolio invested in highly rated bonds

* S&P AA- (very strong)

* A.M. Best A+ (superior)

* Moody’s Aa3 (excellent)

* No credit default swaps

* Increased demand for fixed insurance products such as annuities

* Currently has no securities out on loan

With Forbes and other news organizations advising the public to switch over to or stay with highly rated insurance companies for the foreseeable future, we believe that companies such as Mutual of Omaha will see increased demand for their products.  Now in its 100^th year, Mutual of Omaha continues to prove itself a rock amidst a sea of change. 

March 1, 2009 sees the release of a very attractive Medicare Supplement product by Woodmen of the World and the Assured Life Association in 10 states.  Over the next several months we will be heavily marketing this product to agents nationwide to ensure they are aware of this great opportunity to write new business.

In addition to the appealing agent benefits this product offers (click here for details), it also provides numerous fraternal benefits that add significant value for its target customers.  Despite fierce competition in the market, Woodmen of the World and the Assured Life Association have impressively differentiated its Medicare Supplement product to make it a worthy addition to your product portfolio, and is why we are staunchly supporting it.  Here is a summary of the key fraternal benefits you are going to want to discuss with your clients should you decide to offer it:

Educational Benefits: Members and their family may be eligible to receive a variety of academic scholarships for both short-term and long-term education.  They can also access an education Web site where they can find information on how to successfully enter a college or university.   

Health & Security Benefits:  Woodmen of the World and the Assured Life Association has partnered with numerous companies to offer its members discounts on a variety of health and security services.  Members have three options that range from $9.85 per month to $14.35 per month on healthcare discount packages.  Members also receive discounts on a personal response service, medical information storage and forwarding services, prescription drugs, and Medic Alert.

Life Benefits: Members have access to special life insurance products that include assistance to orphaned children, newborn child protection benefit, and estate planning.

Travel Benefits: Members can save up to 10% every time they rent a car through Hertz both domestically and abroad.  Discounts on vacation packages to over 180 destinations are also available through Collette Vacations

As always if you have any questions or just want more information, feel free to contact us at any time.