Re: sponsored demutualization -- request for opinions -- Insurance Forum

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Date Posted: Sun, July 21 2002, 20:28:32
Author: Rich Franzen
Subject: Re: sponsored demutualization -- request for opinions
In reply to: Jim Corr 's message, "Re: sponsored demutualization -- request for opinions" on Sat, July 20 2002, 21:09:11

>I am in favor of keeping a company a mutual. I like
>the idea of a company having only one master, the
>policy holder. If a company has policy holders and
>share holders who does the profits benefit? The share
>holders because they expect a profit (rightfully so)
>or the policy holders who could benefit from lower
>premiums or higher cash values? It is my understanding
>that it is almost impossible to start a mutual company
>these days. It's just to expensive. Just my opinion.

Jim,

It sounds like we agree in general about mutual companies staying mutual. I don't know how hard it would be to start a new mutual company nowadays. Just a couple years ago, the whole idea was going out of fashion. Now that reality has hit, and people are reminded that the market can go down for years at a time, being part of a conservatively managed mutual life insurance company will probably make sense to more people.

If the market stays down for several more years, MONY, MetLife, and Prudential might start to wonder about the wisdom of exposing themselves to the whims of stock market emotion. Those who purchased variable and variable universal policies primarily as life insurance may begin to wonder if they had made the best choice as well.

The three companies mentioned in the last paragraph were healthy when they demutualized. I am still interested in hearing what anyone thinks about the unhealthy companies which needed a sponsored demutualization to survive. These include The Equitable and Provident Mutual. The main point my GlossPinion makes was that it was mismanageent which brought them down in the first place. An ethically and conservatively managed mutual life insurance company has a lot of built-in robustness. Does anyone care to comment about this assertion?

-- Rich

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Replies:

Re: sponsored demutualization -- request for opinions -- Brent D. Gardner, ChFC, Mon, July 22 2002, 19:12:10
- Nationwide Insurance -- Rich Franzen, Tue, July 23 2002, 9:25:09
  - American Home Life - A mutual company since 1909 -- Brent D. Gardner, ChFC, Tue, July 23 2002, 18:07:40