Home' Trinidad and Tobago Guardian : April 5th 2015 Contents APRIL 5 • 2015 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
COVER STORY | SBG5
Nine months after launching a US-dollar universal
life insurance product that has performed "slower"
than expected, the Pan-American Life Insurance
Company last month rolled out an identical product
in TT dollars called Pan-American Life Access on
the local market.
Pan-American Life Access is considered to be a traditional
life, but its launch on March 20 came a few weeks after the
Central Bank s Financial Stability Report observed that "non-
traditional products accounted for close to 60 per cent of total
insurance liabilities" as at the end of September 2014.
According to the Central Bank: "Strong demand for unit-
linked products and individual annuities drove the robust
growth of almost 14 per cent in gross premium income over
the year to September 2014."
Pan-American Life Access is universal life insurance, which
means that it offers a cash value and is permanent as opposed
to term insurance in which the coverage is for a defined period.
The cash value element of the product allows the policyholder
to accumulate interest in a fund during their lifetime. The
product is being sold with a 1 per cent lifetime guarantee and
currently credits 3.5 per cent interest, explained Bruce Parker,
Pan-American Life s Senior Vice President -- Global Life Insur-
The universal life insurance product is flexible, said Parker,
allowing policyholders to adjust their contributions to suit
their life needs. "That s a critical part of why we believe the
product is going to be important here in T&T because we can
sit down with a family, do their life insurance plan and give
the breadwinner one product that should last them a lifetime
as it can be adjusted up and down as their needs change."
The flexibility of the product extends to the rate at which
the policyholder wants to accumulate the cash value, said
Pan-American Life s CEO and Managing Director for the
Caribbean, William Schultz.
"The product has a life insurance element for which the
policyholder has to pay the required premium for that risk to
the insurance company. In addition to that, the policyholder
can opt to make additional contributions in excess of the pre-
mium required that would become part of the savings element,"
That flexibility would help, for example, if the policyholder s
children want to go away to university. The extra contributions
that accumulate the cash value of the policy can be reduced
and the policyholder still has the protection of the life insur-
Parker said the cash value element of the Life Access product
"will supplement retirement savings, it is not meant to replace
a retirement plan." He said if the policyholder does not access
the cash value of the fund early, prefering instead to let the
policy accumulate, "they will have a sum of money in that
policy that, when they retire, can be used to set up regular
withdrawals or periodic loans. They have flexibility on how
they can access that money.
"The policy covers a life insurance need and the savings is
a supplemental benefit of the product."
Asked to respond to the prevailing wisdom locally that the
T&T market favours annuity-type products more than tra-
ditional life insurance, Parker said: "Pan-American Life has
only been in T&T for a few years. We have a philosophy that
we do sell annuities, personal accident and life insurance and
we feel that people should have a balanced approach to the
"We don t think that annuities replace life insurance and
life insurance does not replace annuities."
He said in T&T, the majority of the company s assets are
in life insurance, followed by personal accident insurance.
Annuities are third on the list.
The insurance executive said the company launched its US-
dollar Life Access product first "because we sell that product
everywhere else so we decided to launch the US-dollar product
first here. We also started with the US dollar product because
our international major medical product is in US dollars and
we felt that there was a need for a US-dollar product here."
At a certain level, Parker said, people want to buy a US-
dollar product, but it did not have broad reach in the mar-
"The US-dollar product went slower than we expected. We
sold a handful of policies since last June because people had
difficulty accessing US dollars. But we expect the TT-dollar
product to be our main life insurance product over the next
While Pan-American Life expects the new product to drive
sales, it is not really a mass-market product as the company
"is looking for face amounts (death benefit) of $350,000 and
above," said Parker, describing the target market as middle
income to affluent.
Schultz said Pan-American Life said the company is in
favour of the new Insurance Act as it will provide a fair playing
field, which will provide for its customers and establish rules
for the industry to follow.
"The process is a good one as the companies have been
given the opportunity to give their perspectives. We think this
will develop into a good piece of legislation and we are waiting
to see what happens."
On the issue of the sale of Clico s traditional portfolio, the
executives said the company would be interested in evaluating
any opportunity that comes up, but like any other enterprise,
the Pan-American group focuses its resources on where it
makes the most sense for it.
Parker added the evaluation is based on where the company
wants to grow, whether it be new markets or increasing its
size in existing markets.
As an example of its thinking, Schultz referenced the group s
acquisition of Algico from its majority shareholder, saying that
before the company came on to the market, Pan-American
was looking to expand its footprint in Central America and
"That was an opportunity that came up. It fit the long-
term strategic plan that Pan-American had, so that made
sense. We would not look at something just to acquire it...nec-
Parker said: "We are really focused on growing in our own
markets, especially those markets that have tremednous oppor-
tunities that we don t have a great deal of penetration in."
The group does not now have a presence in Jamaica, Haiti
or the Domican Republic, but it does operate in the Cayman
Islands, using an offshore Class "B" licence to sell US insurance
to non-American citizens or residents in Florida or Texas. The
offshore insurance is not available for residents of countries
in which the group has an operation, like T&T.
Pan-American rolls out
traditional TT$ policy
William Schultz, Pan-American Life Managing Director for
Bruce Parker, Pan-American Life's Senior Vice President
About Pan-American Life
New Orleans-based Pan-American Life Insurance
Company, the Group's flagship member, has been
delivering financial services since 1911, employing more
than 1,400 worldwide, providing top-rated life, accident
and health insurance, employee benefits and financial
services in 47 states, the District of Columbia (DC),
Puerto Rico, and the US Virgin Islands. The Group's
member companies offer individual and/or group life,
accident and health insurance throughout Latin
America and the Caribbean. The Group has branches
and affiliates in Costa Rica, Colombia, Ecuador, El
Salvador, Guatemala, Honduras, Mexico, Panama, and 13
Caribbean markets, including Barbados, Cayman Islands,
Curacao and Trinidad and Tobago.
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