When people shop around for a life insurance provider they may be prone to sticking with the bigger name companies, but this may end up becoming a costly mistake, according to Conning research and Consulting. Conning is a provider of asset management and insurance industry research to insurers.
"As many large life insurers faltered in the financial crisis, the majority of small life insurers showed much steadier performance," said Terence Martin, senior analyst at Conning. "Their relatively conservative product mix, with greater focus on whole life, term life, and fixed annuities was one major reason for their stability. This product focus was matched with a more conservative investment stance, which also served them well."
The study analyzed smaller companies' performance and detailed the insurers with the most successful results. This is the third study that the group has conducted on small companies. They also looked at characteristics that produced consistent performance through the financial crisis.
The successful companies tended to have a higher ratio of life premium to annuity premium and investment performances bested their larger counterparts during the financial crisis, said the study.