Reinsurers play a key role in today’s voluntary market, with over two-thirds of the carriers surveyed in Eastbridge’s Voluntary Product Development Processes using these companies in their product development process. Many use reinsurance companies for pricing support, policy form development and risk insight. Others use them for market competitiveness and trends, plan design, and underwriting. A significant percentage of the carrier respondents (nearly 70 percent) reinsure their voluntary products, most commonly life and long-term disability insurance. Some carriers also reinsure their short-term disability, critical illness, accident, AD&D and hospital indemnity products.
The carriers also solicit help from reinsurers with their product filings, although most (66 percent) use only internal resources and another 34 percent a combination of internal and external resources. About half (53 percent) of the respondents file at least some of their voluntary products under the Interstate Compact, particularly life insurance. A few of the carriers use the Compact for their voluntary short-term disability, long-term disability, critical illness, accident and hospital indemnity products.
To launch and introduce their new products, the carriers surveyed employ a variety of tools, most commonly training and educating internal staff and distributing product and training materials via mail, email and/or online. The majority also use in-person meetings with sales representatives and brokers as well as webinars/video conferences. The in-person meetings were deemed as the most effective method among those surveyed.
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