Sun Life guns for market share in hybrid life/LTC space

Sun Life Financial Inc.’s hybrid whole-life and long-term-care product came out just last month, but the insurer is champing at the bit to build market share in a space currently dominated by just a select few.
The burgeoning linked-benefits marketplace experienced a 69% increase in sales last year, as more than 26,000 policies were sold in 2010 and new premiums totaled $1.2 billion, according to LIMRA.
Competition is stiff for Sun Life’s Sun Care product, which is entering a market that’s owned by a handful of firms, most notably Lincoln National Life Insurance Co. Lincoln currently has a following among advisers with its MoneyGuard Reserve hybrid universal-life and LTC policy, a product that has more than a 20-year history.
But Sun Life has picked up the brain trust behind MoneyGuard’s creation and success — including Bob Klein, former head of sales for MoneyGuard Reserve. Now a vice president of life strategy and linked benefits at Sun Life, Mr. Klein said the key to differentiating the Canadian carrier from its competitors will stem from its wholesaling efforts.
“The goal is to differentiate ourselves in two places: the ease of doing business from the adviser and client perspective, and getting more feet on the street from a distribution perspective,” he said.
Few advisers make long-term-care planning a core part of their business on a regular basis, so lack of awareness has been the biggest challenge getting the hybrid products out, Mr. Klein added.
Sun Life’s biggest potential opportunities, he noted, are among independent firms, banks and wirehouses. The insurer has handed off Sun Care to its variable annuity sales force, which consists of 80 external and 50 internal wholesalers.
Wholesalers who specialize in hybrids are somewhat rare, and Mr. Klein estimated that there are just 40 to 50 individuals across the country who are experienced in selling them. Had Sun Life built its wholesaling force from the ground up, it would have taken four to five years to generate profits, he added.
“It takes a long time to hire people from scratch,” Mr. Klein said. “It’s not like the annuity world, where you have a vast group of wholesalers who can move from firm to firm.”
In turn, the dialogue between advisers and Sun Life wholesalers will be different when talking about Sun Care.
Most wholesalers talk about other living-benefit products in terms of moving fixed assets that are sitting on the sidelines into a hybrid life/LTC product. However, Sun Life’s wholesalers will play up two products in their discussions with advisers: using the variable annuity to solve for retirement income needs and then protecting the risk to assets by using Sun Care.
“It’s not going after that same fixed bucket of money but going at it from a more holistic approach: talking about the whole retirement income story and where long-term care fits in,” Mr. Klein said.