Average Annual Rate Increases

[2112Greg]

Assurant prices out in Austin most of the time, but I have become a huge fan of 24-36 rate locks with them. Much of my business, if not all, is outside of Austin in surrounding cities/towns, where Assurant prices out much better and quite competitive. I like the innovative and unique 'sizzle' that they offer and have moved them to one of my go-to carriers.

In an effort to back up the position that rate locks make sense to clients, I was wondering if anyone has any data on how rates go nuts after the first 12 months with other carriers. I know it depends on the plan and I've seen some plans reduce in premium and other plans with the same carrier increase.

I'm really just looking for a sales tool in this respect. Any info y'all have would be appreciated...

 

[joshril]

I don't know of any areas where Assurant prices out well in TX... I know there are pockets in San Antonio, Lubbock, Amarillo, etc. where their rates are a little better.

BTW, the rates will get nasty coming off of a 24 or 36 month rate lock. Do so with caution...

 

[somarco]

Avg in my area is in the 12% range. Time is +20% higher than anyone else in most parts of GA so the 2 - 3 yr rate lock is out of the question.

As Josh indicated, expect a whopping rate increase once the guarantee expires.

 

[joshril]

When I started as an independent, one of the first carriers I hooked up with was Assurant. They're alluring due the 12 month advance and easy apps. But, it's very difficult to make consistent sales with Assurant in TX if you're not selling RightStart...

For example:

78750 - 38-yr old male - Preferred
$2,500 Deductible 80/20 with copay

UHC Copay Select (with RX buy-up) = $157.51
Assurant MaxPlan = $209.82
Aetna MCOA $2500 = $130.00

Of course the Aetna plan is a little limiting in the RX department.

Very hard for me to recommend Assurant here. It's like this in most of the state. As far as increase is concerned, there is no advantage with Assurant over these carriers.

It's just a rate increase postponement. Your client is really mad in 2-3 years instead of kind of mad and willing to change in 1-2 years.

Not to mention, Assurant's chargeback policy is stupid.

 

[somarco]

Aetna plan is a little limiting in the RX department.

They had that here too, except for one policy. No one else had Rx caps so no reason to offer them . . . plus they weren't competitive.

Last yr they lifted the $5k cap on all policies but still not competitive. This year they dropped rates 20 - 30% on the HDHP and maybe 15% or so on the copay plans by switching to a better network.

They are strong now, especially on the HDHP.

 

[joshril]

T

Last yr they lifted the $5k cap on all policies but still not competitive.

I wish they would lift the RX caps here... Their prices are typically some of the best in the state. Back before smokers were a tier B, their rates were untouchable...

The only major carriers that have RX caps in TX now are BC/BS, Aetna, and UHC (cheap to buy-up though)...

If Aetna would ditch the RX cap and fix their online app, they'd get a lot more business from me. Right now, a lot of mine is going to UHC and H1.

 

[TXINSURANCE]

Is this the Assurant pitch?

"Yes sir we have a 36 month rate lock (that you pay for rate increases IN ADVANCE) , however the kicker is you can not get sick in those 36 months because if you do - you will never get approved on another carrier since your rates are going to go up 300 to 500% after your rate lock. Keep in mind your current premium is 30 to 60% higher than other comparable plans in your state, but I am an honest agent (chasing commissions) and I have your best interest (and my commission) at heart.

But here is the good news - most people do not on average keep their policies 36 months unless you are self employed and rolling in money. We will need at least 3 months premium to get started (because if not I have a 100% charge back on my commissions).

What do you say? Ready to sign up?"

OK poking a little fun but I have no idea how this product is sellable in any market. I am licensed all over the country and this is very hard to sell and not competitive but it select regions.

 

[joshril]

Is this the Assurant pitch?

"Yes sir we have a 36 month rate lock (that you pay for rate increases IN ADVANCE) , however the kicker is you can not get sick in those 36 months because if you do - you will never get approved on another carrier since your rates are going to go up 300 to 500% after your rate lock. Keep in mind your current premium is 30 to 60% higher than other comparable plans in your state, but I am an honest agent (chasing commissions) and I have your best interest (and my commission) at heart.

But here is the good news - most people do not on average keep their policies 36 months unless you are self employed and rolling in money. We will need at least 3 months premium to get started (because if not I have a 100% charge back on my commissions).

What do you say? Ready to sign up?"

OK poking a little fun but I have no idea how this product is sellable in any market. I am licensed all over the country and this is very hard to sell and not competitive but it select regions.

I like it! Great pitch! I have a client I'm working with now that has been with Assurant for just over 3 years... His rates have increased from $300 to almost $1,200 per month and that's after increasing his deductible... Assurant is just sick!

I have written a few Assurant plans lately for some 62 year old clients... the 3 year rate lock actually does make sense here, but they cut the agent commission in half I believe for applicants over 60. Not to mention the BS about not pro-rating chargebacks during the first 3 months...

 

[2112Greg]

Yea, I understand the downside of the rate lock. It's nice, though, to have a carrier that is trying new/different stuff. That part I like. Along with decreasing deductibles and healthy discounts, they are pretty unique. I just wish they were more competitive.

One BS thing about them is if there is anyone over 60 on the application, the commission drops to 3%. THREE!!!! That's seriously screwed up...!

 

[joshril]

Yea, I understand the downside of the rate lock. It's nice, though, to have a carrier that is trying new/different stuff. That part I like. Along with decreasing deductibles and healthy discounts, they are pretty unique. I just wish they were more competitive.

One BS thing about them is if there is anyone over 60 on the application, the commission drops to 3%. THREE!!!! That's seriously screwed up...!

Another BS thing is they charge you back 12 months if someone cancels in the 3rd month. Just stupid! I believe the commission over 60 is 10% or 15% though? I wrote one last month and I know it was at least 10%.