BISA Magazine - Quarter 2, 2017 - 28

FEATURE STORY

An insurer's
financial rating
matters when it
comes to bank
distribution.

There were other reasons for the merger. "Penn Mutual's culture and status as
a mutual life insurance company is a
natural fit for Vantis Life," Tedone said.
Penn Mutual is a mutual life insurance company, which means that it is
owned by policyholders, not shareholders. Vantis Life is the former Savings
Bank Life Insurance Company (SBLI)
of Connecticut, established in 1942 by
an act of the Connecticut Legislature
to provide that state's families with affordable life insurance products.i These
two companies, in other words, aren't
traditional profit maximizers, arguably.
Vantis long ago broke out beyond
Connecticut's borders, but most of the
carrier's bank clients are still east of the
Mississippi River. Vantis operates today
in 45 states and sells through 10,000
locations. The anticipated "ratings
enhancement" should enable it to do
more business with larger banks, not
only through licensed bank employee

(LBE) programs, but also via call centers and online sales. Penn Mutual will
provide capital to invest in new processes like accelerated under writing.
Meanwhile, the merger fits in with
Penn Mutual's long-term growth
strategy. "Pre-crisis [before 2008], Penn
Mutual ranked 38th nationally in new
individual life insurance sales," McDonnell said. "Today, we occupy the 17th
spot." The plan is to break into the top
10 by 2025.
In recent years, Penn Mutual has
focused largely on the affluent market,
distributing through some 1,000 career
insurance agents and 5,000 financial
advisors. But its long-term plan is premised upon and recognizes "the value
of the middle market" as well as the
affluent market, McDonnell said. Banks
serve this consumer segment, as do
some suppliers like Vantis Life, which
focuses on "under-insured, middleincome markets," Tedone said.

i. SBLI companies were also established in New York and Massachusetts and they operated separately.

28
www.bisanet.org

Vantis Life was attractive to Penn Mutual because it was an established "brand"
in the bank market, McDonnell said.
So when the opportunity to join forces
arose in 2016, it was deemed preferable to trying to go solo into the bank
distribution market. Penn Mutual isn't
turning its back on the affluent market, she adds, but the company realizes
that to achieve its long-term goals, it
needs to tap the middle market - not
just the affluent segment.
Given the pressing need on the part of
banks for new sources of fee income
and the rise of the millennial generation, with its financial conservatism
and appreciation for life protection, the
bank channel may be in a new place
when it comes to individual bank-sold
life insurance.
As McDonnell put it, "We're in a period
when the moon and stars align." ▲

http://www.bisanet.org

Table of Contents for the Digital Edition of BISA Magazine - Quarter 2, 2017