Template Letter to Insurance Broker Re: Effect of All-Cause Mortality Increase on Insurance Company Credit

The following template was prepared by the Solari Report.

[NAME OF AUTHOR(S)]
[ADDRESS OF AUTHOR(S)]
[EMAIL ADDRESS OF AUTHOR(S)]
[TELEPHONE NUMBER OF AUTHOR(S)]

[Date]

Joe Insurance Broker
Insurance Brokers, Inc.
1234 Happy Lane
City, State Zip Code

Re: John and Mary Smith
Insurance Carrier, Inc. Term/Whole Life/Disability/Other] Insurance Policy
Policy No. ________________

Dear Joe:

I/We are writing to ask your advice regarding my/our insurance policy(ies) issued by [Insurance Carrier, Inc.] in light of recent financial market revelations.

In November 2022, I/we saw in TheWall Street Journal that the stock of industry leader Lincoln Financial fell by 30% in just one day. Lincoln Financial itself was downgraded from A+ to A and is on negative outlook (for possible further downgrades). See the press release below for additional details about AM Best’s reasoning and future expectations.

Also note Lincoln Financial’s recapitalization with 9.25% preferreds following the blow-up and some other comments in this press release: https://news.ambest.com/presscontent.aspx?refnum=32763&altsrc=2. Lincoln has had to raise additional funds to maintain its required statutory capital levels.

As I/we understand it, Lincoln discovered it was under-reserving in its universal life insurance business. I/We have also read that Prudential Financial took similar charges in its life insurance business earlier this year and that many other companies, including Globe Life, reported elevated group life insurance loss ratios over the past twelve months. This is consistent with the information in the additional sources below.

My/Our understanding of the reported data is that an increase in all-cause mortality of non-disabled employees of working age occurred after the height of the “pandemic,” when COVID-related claims would have been expectedRead More