There certainly ap-pears to be a shift in the products that advisors surveyed for the 2008 Insurance Advisors’ Report Card are selling to their clients.

First of all, given the aging population’s need for retirement income, there is an increased demand among advisors for segregated funds with guaranteed minimum withdrawal benefits — despite the fact some insurers are far from ready to bring such products to market. And, second, living-benefits policies are gaining much greater prominence in advisors’ repertoire as more and more insurers establish a larger and more comprehensive offering in that area.

Waterloo, Ont.-based Sun Life Financial (Canada) Inc. garnered the highest rating of the five insurers surveyed in this year’s Report Card in the “bringing new investment products to market” category for the successful launch of its GMWB product in May 2007. (This category does not apply to the managing general agencies.)

“Our GMWB product, called SunWise Elite Plus, is proving to be very successful in the marketplace,” says Jack Garramone, Sun Life’s vice president of its career sales force.

However, Sun Life is one of only a handful of insurance companies to launch a GMWB product. And the insurers surveyed for this year’s Report Card that have not yet brought a seg fund with a GMWB component to market have garnered a lot of displeasure from their advisors.

“They are way behind the eight ball,” says an advisor in Ontario with Winnipeg-based Great-West Life Assurance Co., in reference to his insurer’s lack of a GMWB product offering.

Adds another GWL advisor in Ontario: “Manulife Finan–cial Corp. came out with a great product called IncomePlus. Sun Life followed up, and it took the industry by storm. You would think [GWL] would do likewise. But no.”

Other insurers may be even further behind their competitors than GWL. The three other insurers surveyed in the Report Card say they are still in the preliminary stages of developing a GMWB product.

Guelph, Ont.-based Co-operators Group Ltd., for instance, is exploring adding more withdrawal-style products, says Jim Wingrove, vice president of agency and sales support.

But despite the fact Co-operators is exploring its product options, almost all its advisors complain that the firm is “behind the curve” when it comes to bringing new investment products to market — and that competitors inevitably have new products months before Co-operators does. This sentiment translated into the rating advisors gave Co-operators in the category of bringing new investment products to market: it was tied with GWL for the lowest score among the firms asked the question in the Report Card.

Co-operators isn’t winning any kudos from advisors in the life and living-benefits streams, either. “Some of the features on the life and critical illness side need improvement,” says a Co-operators advisor in Ontario.

However, Wingrove says, since Co-operators developed its critical illness products, sales of the firm’s living-benefits products have increased every year over the past three to five years. “This year, to date,” he says, “we are up 35% in new premiums from the same time last year.”

Overall, Co-operators sales of living-benefits products, which not only include critical illness policies but also disability and long-term care insurance as well, went up by 3.3% in 2008 over the previous year.

Among the 361 insurance advisors surveyed this year by Investment Executive, living benefits account for 12.7% of all products sold this year, compared with 9.4% last year. The difference comes mostly from firms with dedicated sales agents, as their sales of living-benefits products increased to 13% from 8.3%. Sales of the products among advisors at MGAs increased only slightly, to 12.3% from 11.9% in 2007.

Despite this small increase for MGAs, they, too, have placed a significant emphasis on living-benefits products. Even Toronto-based PPI Financial Group Inc.,which focuses mainly on building customized financial products for high net-worth clients, participated in the trend.

“We have invested in excess of $3 million in systems and personnel to develop an integrated-solutions approach to individual and group living benefits,” says Jim Burton, PPI’s chairman and CEO. “Our primary focus is the upscale client and key executives — and a benefit portfolio is part of this initiative.”

Adds a PPI advisor in Ontario: “Because PPI is expert [in high net-worth clients], it creates concepts that solve problems in the marketplace. PPI has experts who can teach me the product, and then I can spend more time going out to bring in the clients.”

@page_break@The reason why more firms are aggressively pursuing the living-benefits market isn’t a complicated one, says Richard Williams, president of World Financial Group Inc., a Toronto-based MGA: “Advisors are much more aware of how living benefits work as a solution for a client. And the public has become more aware of its availability. Both are driving the sales of this product.”

Increasing sales are also attributable to an unavoidable reality, as Co-operators’ Wingrove points out: “Unfortunately, people do get certain illnesses. These types of products help families cope financially when someone is off work due to a serious illness.”

Although sales of living benefits have increased, the majority of advisors still focus on life products; 31% of insurance sales for all advi-sors surveyed were in permanent life products, while 26% of their sales are term life policies.

That’s understandable, as agencies with dedicated sales forces, such as Mississauga, Ont.-based RBC Life Insurance Co., start their advisors on life products right at the training stage.

“The early training that we do really puts the advisors in the life and living-benefits marketplace,” says Ernie Murdoch, RBC Life’s senior vice president of career sales. “Outside of that, we also have seg funds and a limited suite of travel insurance products available.” IE