New York Life Insurance Company, New York,
announced in its third quarter earnings results, released Monday, that the company's dividends to participating policyholders will increase by $100 million in 2013, an 8% rise over the company’s 2012 payout.
Mark Pfaff, New York Life’s executive vice president of agency operations, says the dividend distribution is in part a result of the “ongoing strength” of the company’s whole life portfolio, robust earnings, operating cost savings and growth of the company’s capital surplus, which now exceeds $19 billion.
Neal Strauss, vice president and senior credit officer of Moody's Investors Services Inc., New York, adds that New York Life’s financial strength is mirrored in the company’s sterling credit rating: AAA, Moody’s highest rating.
“New York Life has a strong market position and brand, a diversified product portfolio, as well as capital adequacy and liquidity,” says Strauss. “Plus, the company has a very strong distribution field force.”
Pfaff says that New York Life’s career agency workforce, which numbers more than 12,000 agents, now has as a significant presence in the U.S.’ burgeoning cultural markets, including the African-American, Asian-American and Latino-American markets, The company invested “heavily” in these sectors three years ago, he notes, by recruiting and training agents to serve them.
New York Life recorded a 4% increase in agent recruitment over the same period in 2011, with 2,396 new agents hired through Sept. 30, 2012. In addition, 79% of the new agent hires in 2012 have been either women or individuals representing cultural markets.
“We're now seeing the pay-off three years out,” he says Pfaff. “We’re on track to attain our sales goals in these markets.”
New York Life’s agents recorded an increase of 11% in sales of recurring premium whole life insurance over the third quarter of 2011; The company’s
annuity sales also rose 16%, driven by income annuity sales, which are up 17%.
“This is our best year ever in terms of sales of income annuity products,” says Pfaff. “We should have well over $1 billion in sales through 2012. In respect to variable annuities, we expect to achieve an 8% to 9% growth in sales for all of 2012. And that’s on top of the 22% sales increase we recorded last year.”
Pfaff adds that New York Life’s “case rate” (or the number of sales) also grew 6.5% in the third quarter. For all of 2012, the case rate is expected to be up by 7-8% compared to 2011.
Sales of New York Life’s flagship product, whole life insurance, also are up 20% through the third quarter, says Pfaff.
Mutual fund sales in the third quarter increased 10% compared with the third quarter of 2011. The gain, New York Life reports, reflects the "consistent investment performance from the company’s investment boutiques in both income-oriented and capital appreciation funds."
While touting New York’s robust third quarter results, Pfaff says that several macroeconomic factors remain concerns for the company moving into 2013. Among them: Congressional action to reign in the deficit by, among other possible measures, eliminating or watering down the tax-favored treatment of life insurance; the slow-growth economy; and continuing low interest rates.
