Standing Strong in 2020:

Highlights of Our Recent Leadership Roundtable

5 Nov 2020

Standing Strong in 2020: Highlights of Our Recent Leadership Roundtable

Estimated read time: 4 minutes, 36 seconds

Communication is critical during uncertain times, and these are indeed uncertain times. To that end, our executive leadership team recently met virtually with some of our agents and brokers throughout our footprint to answer questions and share information.

The roundtable included:

Professional headshot of Jose A. Suquet, Chairman of the Board, President and CEO Pan - American Life Insurance Group

José S. Suquet, Chairman of the Board, President and CEO

Professional headshot of Carlos Mickan Vice Chairman of the Board Head of Finance and Administration at Pan-American Life Insurance Group

Carlos Mickan, Vice Chairman of the Board, Head of Finance and Administration

Professional photo of Robert DiCiani President Global Benefits at Pan - American Life Insurance Group

Robert DiCianni, President - Global Benefits

Professional headshot of Bruce Parker President Global Life at Pan - American Life Insurance Group

Bruce Parker, President - Global Life

Professional headshot of Steven Friedman Executive Vice President Deputy Head of Corporate and Chief Investment Officer at Pan - American Life Insurance Group

Steve A. Friedman, Executive Vice President - Deputy Head of Corporate Finance and Chief Investment Officer

Not surprisingly, attendees had many great questions—and because we know these topics are on everyone’s mind, we’re pleased to share highlights of the discussion with you.

How Is PALIG Faring Financially? (Strong as Ever!)

As Chairman José Suquet observed, although PALIG has weathered its share of crises over the last few decades—from 9/11, Hurricane Katrina, the financial crisis—the COVID-19 pandemic is by far the most complex. However, the company is emerging even stronger than ever—thanks in no small part to the collective efforts of PALIG’s outstanding colleagues, who stepped up to meet the challenge and haven’t missed a beat.   

The proof: our recent ratings reaffirmation by A.M. Best and Fitch. While both ratings services gave us “the grilling of all time”—including the modeling of various stress scenarios’ and their impact on our portfolio—we emerged with flying colors.

This stands in stark contrast to many carriers that were downgraded or put on a negative outlook. Please rest assured: we will continue to make decisions guided by our commitment to PALIG’s financial strength and stability.

How is PALIG Positioning Itself to Meet COVID19 -related Needs?

While no one knows how the pandemic will progress, we do know it will continue for some time. Our leadership firmly believes that maintaining the afore-mentioned financial strength is what will enable us to deliver on the promises we’ve made to our insureds.

Case in point: an analysis of COVID-19 death claims to-date revealed that many insureds were elderly clients whose policies were on the books for decades. These are the promises that are so important to keep—and we’re well positioned to do just that.

What Factors Are Impacting PALIG’s Financials Today?

According to Vice Chairman Carlos Mickan, we are monitoring three COVID19 -related factors closely: 

  1. Reduced Investment Income
    Investment income is down, partly because we increased liquidity in anticipation of increased claims activity and partly because interest rates have fallen. Nevertheless, our investments remain higher than the industry average—and our balance sheet is strong.
  2. Delayed Health Insurance Utilization
    During the early days of COVID-19, utilization plummeted because people stayed home. Now, it’s creeping back up. Leadership is mindful of the fact that insureds who delay receiving healthcare may face bigger problems down the road—and is taking steps accordingly. 
  3. Rising Mortality Rates
    While we’ve paid our share of COVID19-related death claims, it hasn’t made a significant impact on our financials.

How Is PALIG’s Investment Portfolio Doing?

According to Executive Vice President Steve Friedman, the end of July the bulk of our holdings are high investment-grade securities that withstood market volatility. Our market value is greater today than it was at the end of 2019.

In fact, our investment returns have outperformed the industry average every year for the last five years by an average of 71-77% basis points.  

While the market environment is very different from the start of the year, we expect to beat the market once again in 2020, although our overall yield will be lower than past years.

What Are PALIG’s Core Strategies for 2020-2021?

PALIG will continue to prioritize financial strength and stability and to maintain our focus on the life, accident and health markets in the individual and corporate segments. We’ve taken specific actions to guarantee that we experience positive financial years in 2020-2021, even if loss ratios rise as expected.

These include a company-wide hiring freeze and the elimination of all travel and entertainment expenses. In addition, we’ve kept our promise to refrain from layoffs in 2020—a commitment that was very well received by employees.

What Innovations Are You Making/Considering?

PALIG has been very active, both in terms of responding to COVID-19 and projecting beyond it. As you know, in response to COVID-19, we extended grace periods, waived pandemic exclusions, and provided telemed options in many countries at zero cost to customers - while maintaining compliance in every jurisdiction and collaborating closely with our reinsurance partners.

In addition, we are moving forward with a number of exciting initiatives, including:

Investing in Technology

This year, PALIG’s leadership committed to a new, three-year technology plan, investing an additional 40 million on top of already-budgeted funds. In addition, we brought in a new Chief Information Officer, Senior Vice President Miguel Edwards, to accelerate our digital capabilities in many areas.

IT worker checking network connections

Developing New Products, Benefits and Campaigns

We are also exploring a number of initiatives, including:

  • Adding coverage for telepsychology sessions (currently being tested in Panama).
  • Developing chronic disease management programs (to keep utilization down long-term and keep group renewals more competitive).
  • Exploring bundled life insurance and hospital indemnity benefits that specifically cover COVID-19.
  • Launching regional campaigns to raise brand awareness, such as the PALIG Cares Safe Return Initiative, which provided PPE and safety signage to small businesses in the Caribbean and Ecuador.

In summary, while 2020 has been a challenging year, our outlook remains positive and our future bright. Agents and brokers have every reason to project the utmost confidence when meeting with current and prospective clients—because they are backed by PALIG, and our mission is to remain the insurance company that people can trust for life.

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