(Boston Business Journal) - John Hancock continues to see a increases in its life insurance sales, even as competitors experience a slowdown from the highs that marked an earlier period of the pandemic, when consumers began seeking out the policies in droves in the face of mass death.
Hancock’s Canadian parent company, Manulife Financial Corp. (NYSE: MFC), recently reported that U.S. annualized premium equivalent reached $161 million in the third quarter, a 58% jump from the same period a year earlier.
The gains come as interest in life insurance may be plateauing. U.S. life insurance application activity was essentially flat in the third quarter compared with the same period in 2020, according to an index from Braintree-based MIB Group. Activity levels are still historically high, but the industry has not been able to match the record level of growth it saw in 2020, which was fueled in large part by younger consumers as the pandemic raged around them.
Brooks Tingle, chief executive of Hancock’s insurance business, attributes the company’s continued growth to several factors, including incentives that its products offer to policyholders who make healthy decisions.
Through Hancock’s Vitality program, for instance, policyholders get premium discounts and other rewards for doing things like exercising or visiting the doctor. (All Hancock policies now come with Vitality, with customers able to pay more for a version with enhanced rewards.) That has proven a powerful selling point, Tingle said, considering that surveys show that most Americans are more interested in life insurance because of Covid-19 and that most of them are striving to live healthier lives because of the virus.
In the third quarter, sales of policies with Vitality Plus, the enhanced version of the product, were up 84% year-over-year.
“This is the sweet spot for Vitality,” Tingle said.
The insurer has taken several steps to adjust the Vitality program in response to the pandemic, including offering policyholders points for getting vaccinated and, when gyms were closed because of Covid, allowing users to submit selfies of themselves working out at home to earn points.
In addition, interest in so-called “survivorship” products has picked up as a result of tax reform talk in Washington, according to Tingle. “Survivorship” products pay out when the second member of a couple dies, a benefit to wealthy Americans facing the estate tax. Sales of the products are nearly double what they were last year at Hancock, Tingle said, as customers try to get ahead of possible legal changes that would subject more people to the tax.
Some life insurers, such as MetLife Inc., are seeing higher payouts on policies because the Delta variant is killing younger people than older versions of the virus. Hancock has not been "that adversely affected by death claims from Covid," Tingle said, because it is not as involved in employer-sponsored policies that working-age people receive as a job benefit.
Manulife’s U.S. core earnings increased slightly year-over-year in the third quarter, to $389 million from $374 million. Its U.S. investment management business, which also uses the Hancock brand, slightly increased its assets under management from a year earlier, to $189 billion from $183 billion.
By Greg Ryan
Senior Reporter, Boston Business Journal
