If you're like most folks you probably don't spend much time thinking about life insurance companies but here's something to think about.
There are actually two different types of insurers and how they differ may affect how they think about the customer experience.
The two types are mutual companies and stock companies.
Companies that are part of a mutual organization such as Western & Southern Financial Group focus on business strategies that provide long-term value to policy owners.
However, stock companies also have a third party, stockholders. to consider.
So they're additionally interested in investment practices that support their stock price,
which may not necessarily be aligned at all times with the concerns of policyholders.
Plus, stockholders can sell their stock so company ownership can change.
In fact, there's been a recent rash of Industry deals where Private Equity firms have invested in and taken control of many life companies.
The NAIC previously estimated that such firms now control 117 companies.
And these insurers could shift their investments to higher risk and less liquid assets or even increase premiums and fees, all to pursue stockholder returns.
In contrast, Mutual companies do not have stockholders and are instead owned by policyholders.
As a result, they are not beholden to stockholder demands and may be able to focus more on long-term investment strategies to build strong capital positions that benefit customers.
All this can seem complicated but an analogy might help simplify things.
Let's say you had a choice of two restaurants for a nice dinner out, one served you with a focus on what you, the diner, wanted.
And the other put food on your plate based on what the restaurants investors wanted, whether you ordered it or not.
Where would you rather dine?
Whatever you decide, we hope this has been Food For Thought for your financial future.
For more information on our company contact a representative of W&S Financial Group Distributors, a member of the Western and Southern Financial Group.