Pitfalls of IRR Pricing - Actuary.com

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New Growth Strategy 1 Reorganize Sales force to pursue Older Aged Sales 2 Revamp UL Product to meet this Market's needs (lower premiums). Why do it? > Fertile demogarphics (lots of available business!) -- Tap IOLI markets > Larger Sales Premium per case > Higher profits?? Profitability of Current Sales Strategy ($59.8 million of Sales Premiums) % of Profit PV Profits Sales Premium IRR Margin Strain ($1000s) Younger Aged 65% 11.3% 9.0% 64% 29,000 Age 70+ 35% 17.1% 10.9% 40% 18,016 Total: 100% 12.4% 9.1% 56% 47,016 12
Profitability of Current Sales Strategy ($59.8 million of Sales Premiums) % of Profit PV Profits Sales Premium IRR Margin Strain ($1000s) Younger Aged 65% 11.3% 9.0% 64% 29,000 Age 70+ 35% 17.1% 10.9% 40% 18,016 Total: 100% 12.4% 9.1% 56% 47,016 New Age 70+ 11.4% 4.4% 42% Profitability of Older-Aged Sales Strategy ($71.1 million of Sales Premiums) % of Profit PV Profits Sales Premium IRR Margin Strain ($1000s) Younger Aged 35% 11.3% 9.0% 63% 18,740 Age 70+ 65% 11.4% 4.4% 42% 16,093 Total: 100% 11.4% 5.6% 48% 34,833 -26% 13
Page 1 and 2: Pitfalls of IRR Pricing June, 2006
Page 3 and 4: Roadmap for this Presentation -- Us
Page 5 and 6: Comparative 8% Investments Coupon F
Page 7 and 8: Pushing the Limit Capital Extreme B
Page 9 and 10: Impact of GAAP on Humphrey Term Dis
Page 11: Analyzing the Year 10 Commission Sc

Pitfalls of IRR Pricing - Actuary.com

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