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Famguard unveils life insurance products

BISX-listed firm expects ‘strong traction’ from flexible programs, while reporting $2.5M bump in premium income
  • Patricia Hermanns.

Guardian Business Editor

Published: May 01, 2013

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Family Guardian Insurance Company is preparing to launch two new products this summer in an effort to expand its life insurance portfolio.

Following the BISX-listed firm's alliance with Aetna, a major third-party healthcare provider with one of the largest networks in the U.S., the "modified whole life" and "modified term" options should help to attract new business and bring added flexibility to clients, according to Patricia Hermanns, president of Famguard Corporation Limited.

She told Guardian Business yesterday that the new products are specifically geared to streamline the life insurance process.

"There will be a limited amount of underwriting, which will make it easier for the consumer.  We are excited and it will be available for our group clients, so we expect it will make a difference in terms of ease of access," she explained.

Whereas modified whole life lasts "the full extent of mortality", modified term focuses on a specific period of time.  The latter is sometimes popular for clients looking to take it out of credit risk.

"It is the ease of issue that makes it appealing.  There is a short questionnaire you fill out.  We make it as easy as possible," she added.  "We think it will have an impact in the market and it won't be as complicated from a consumer perspective.  We feel it should get strong traction."

Meanwhile, Hermanns told Guardian Business that the firm is starting to see benefits from its partnership with Aetna.

The agreement, which occurred in March of last year, has given Family Guardian "a very extensive network in the United States".

The move gives the firm tremendous depth of clients, she explained, and allows it to achieve better pricing on healthcare policies for those accessible North American facilities.

She said the alliance was "certainly an improvement" over the previous arrangement and should continue to pay dividends in the future.

The announcements by Hermanns follow the release of Famguard Corporation Limited's financial results for the period ending December 31, 2012.

Gross premium income grew from $95.68 million in 2011 to $98.2 million, according to the report.  Net income expanded marginally to $5.44 million compared to $5.21 million in the previous year.

Total comprehensive income fell to $5.4 million from $6.14 million.  Hermanns attributed the drop to the revaluation of assets in 2011.  She told Guardian Business that overall the firm's book of business is continuing to grow.  She said that strong products and services and "our agency force" have helped achieve these positive results.

Back in July 2012, Family Guardian Insurance Company was downgraded by A.M. Best, a top rating agency, when its financial strength was revised from "A-" to "B++".  Part of the reasoning was a lack of diversification and a focus on volatile mortgage loans.

Hermanns told Guardian Business yesterday that the firm's mortgage portfolio is trending below the industry in terms of non-performing loans.  Noting she is "familiar with the financial statements of other insurance companies and banks", the president insisted that Famguard is confident it's trending positively in relation to the market.

She said the mortgage portfolio is around one-third of the total portfolio, "which we believe is very reasonable".

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