Conseco Insurance Group just closed the book on a disappointing 2004 but its leaders already have a jump on several initiatives to prevent a repeat in 2005.
The Conseco Inc. subsidiary launched two new life insurance products earlier this year and is aiming for a 25-percent increase in new business in 2005, according to Brad Corbin, the insurance group’s new executive vice president of sales.
The insurer also has started burning some phone lines to boost the independent sales force so crucial to its products. The whole improvement strategy boils down to simple hard work, Corbin said.
“It’s a matter of rolling up shirt sleeves and building the product from the ground up, and not trying to throw a new product out there and hoping to get what you can,” he said. “We want to build measured, predictable sales growth.”
A big boost to that goal could come from a financial strength rating upgrade, according to Jukka Lipponen, an analyst for New York-based Keefe Bruyette & Woods. The New Jersey-based ratings firm A.M. Best Co. currently rates Conseco’s core subsidiaries B++, one notch below the A level that makes it easier to sell policies.
Carmel-based Conseco’s two subsidiaries, Bankers Life and Casualty Co. and Conseco Insurance Group, headed in opposite directions as 2004 wound down.
Both recorded profits. But Chicagobased Bankers saw its pretax profit rise $3 million to $63 million in the fourth quarter, while the insurance group’s dropped more than $7 million to $61 million.
Conseco Insurance Group recorded a pretax profit of $270.5 million for the year, but its sales disappointed company leaders. The Carmel-based subsidiary collected $57 million in new business, counting life and health premiums and a portion of its annuity business, spokesman Jim Rosensteele said.
“To be blunt, Conseco Insurance’s sales in 2004 were lower than planned, and we are taking deliberate steps to meet our sales challenge,” Conseco Inc. President and CEO William Kirsch told analysts during a March 14 conference call.
Conseco Insurance Group sells products in three main areas: life insurance, annuities and supplemental health policies for things like cancer and Medicare supplements, Rosensteele said. The company targets middle-class Americans.
The deliberate steps Kirsch mentioned include recruiting new leaders like Corbin, who started in early February, and rolling out more products. Last year, the company unveiled its first new cancer policy in several years, Corbin said.
The product includes a health advocate service, which is basically a help desk that answers questions about treatments, doctors and clinics for the policyholder, Corbin said.
The insurance group also launched a Medicare supplement in early 2005, along with two life insurance products.
That’s a crucial move in the life insurance business, where companies must keep their product portfolios fresh, Lipponen said.
“If it becomes stale, it won’t take very long before it starts to impact your sales,” he said.
Another key move is building agent relationships. The company works with more than 450 independent marketing organizations that represent thousands of sales agents.
Industry consolidation over the past five to 10 years has displaced many independent agents, and Corbin told analysts during the March 14 call he sees “abundant opportunity” to add more.
The insurance group has more sales leadership and connections than last year to boost that effort, Corbin said. He noted, for instance, that he used to manage a sales force of 6,000 agents for Northern Life Insurance Co.
While company leaders are optimistic about their product and recruitment plans, Lipponen said the key to spurring a “more material” increase in sales is that ratings upgrade.
Best analysts made their annual visit to Conseco March 22, and Lipponen thinks they could deliver an upgrade by midyear.