[A] nearly two-century-old Montpelier-based life insurance company has seen robust growth over the last decade, exceeding the industry’s national trends.
The National Life Group has seen a 252% growth in life insurance sales since the Great Recession in 2008, far outpacing life insurance growth nationally, according to the company’s 2018 annual report.
Nationally, life insurance sales grew only about 6% after 2008, according to LIMRA, an industry association.
“We remain one of the fastest growing life insurance companies in America,” Mehran Assadi, chairman, CEO and president of National Life, said in a press release from the company.
Robert Cotton, chief operating officer at National Life, attributed the company’s success to its focus on selling life insurance to people with mid-range incomes, including individuals, families, and small business owners. He described that segment of the market as the largest and least likely to have life insurance.
“We consider the market significantly underserved because fewer than 40% of U.S. households actually have adequate life insurance,” he said.
In 2008, National Life’s customers paid $87.8 million for new life insurance policies, according to the company. The number started to rise in 2013, when $151 million was paid in premiums. By 2018, that total was $309.1 million.
Cotton said some people are deterred from buying insurance because they lack the disposable income. But a larger reason, he said, is that most people don’t understand the need for insurance and its significance in their long-term financial planning.
As a result, National Life has been focusing on providing education around the need for insurance, not just selling the products, said Cotton.
Life insurance gives people financial security, Ross Sneyd, director of corporate communications and community relations for the company, said.
Sneyd also said a life insurance policy is an important part of financial planning by helping and individuals ensure that children or spouses have money to pay a mortgage or meet other needs.
“We think our strategy is very effective and is resilient through different market cycles, so we expect our growth to continue,” Cotton said.
Karen Terry, assistant managing director for insurance research at LIMRA, an industry group, said she’s not allowed to comment on specific company results. But the numbers show that National Life’s growth rate has exceeded the national average in the past decade.
Terry said some of the premium increases seen since 2008 are part of the recovery from the recession. At the same time, the sales of some specific products have grown, including the whole life insurance and indexed universal life insurance.
According to LIMRA, life insurance customers paid $13.5 billion in premiums for new policies in 2008. The number dropped to $11.6 billion the following year during the Great Recession but has been steadily growing since then, LIMRA said. Last year, the premium payments came to about $14.3 billion.
Terry said whole life insurance is popular because the cash value growth is guaranteed when people buy the product, and the premiums don’t change over time.
“In times of economic uncertainty, that’s a pretty popular product for consumers,” she said.
National Life has a 170-year history, according to its website. The 2018 annual report shows the company’s total assets were $31 billion, an increase of 4% over the previous year, and were against total liabilities of $28 billion. The budget of the company’s charitable foundation doubled from $1 million to $2 million in 2018, according to the report.
The company has 1,200 employees, according to Cotton. More than 800 work in Vermont and the rest of them are based in Texas or work remotely.
National Life initially incorrectly reported the sales growth as 351% in its annual report and press release May 14. After VTDigger pointed out the error, the company corrected the number, saying it had been miscalculated.
The CEO Forum, a magazine that focuses on the work of companies in America, recognized National Life as one of “America’s Magnificent Eight Exceptional Companies” last year.
“Their exceptional financial performance and significant revenue growth occurred because they build a culture of people focused on community and important causes, and caring for customers which resulted in more business through referrals and higher customer retention,” Robert Reiss, the CEO of CEO Forum said in an email to VTDigger Tuesday.
Reiss said the “servant leadership” that has been implemented by Assadi also benefits the company. He said the philosophy of this leadership is leaders see their roles as building the culture and delivering exceptional service to their customers.
There are 1,800 domestic and licensed foreign insurance companies doing business in Vermont, according to a 2017 report from National Association of Insurance Commissioners, or NAIC. That puts Vermont at No. 6 in the nation for the number of insurance companies offering services in the state. In 2017, individuals and employers in Vermont paid $3.8 billion for all types of insurance. The number has grown more than 26% since 2008.
However, despite National Life’s growth, state officials say that the rate of Vermonters who have life insurance has not increased over the last decade.
Kevin Gaffney, deputy commissioner of insurance at the Vermont Department of Financial Regulation, said life insurance sales growth in Vermont is only about 0.5% over the past five years. It’s mainly because the population is a little mature and has not grown.
“Growth has not been there, so you have fewer individuals to purchase life insurance than you did 10 years ago,” Gaffney said.
