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© International Group Program
Country Panel Presentation: USA
2016 IGP Regional Americas Seminar São Paulo, September 15, 2016
Jesse Ogushwitz Director, Product Management Advanced Markets The Prudential Insurance Company of America (Prudential)
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This presentation was exclusively prepared for the attendees of the 2016 IGP Regional Americas Seminar. None of the contents of this presentation may be copied or disclosed to any other party or used for any other purpose than the one mentioned above without IGP's prior written permission.
0296205-00001-00
© International Group Program
Key Topics
Background Information
Company Info & Background
Social Security
Summary of Social Security
Benefits
Private Practice
Customary Private Employee Benefits:
Type & Level of Benefits / Survey
Data / Plan Design / Benchmarking /
Trends
Multinational Pooling
Specifics of multinational
pooling in the US
Legislation
Current legislative issues with
significant impact on the funding of the benefit plans / How are employer
and employees affected?
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Prudential’s Company Overview The Rock Symbol and the Prudential Name are Among the Most Widely Recognized Brands in the U.S. 1
- years in group insurance1
#1
95+
“World’s Most Admired Companies®” Insurance: Life, Health Category2
60+ years in the Disability industry1
1 Prudential Brand Image Study, Wave 43, January 2013. 2 Fortune® magazine, 2016 World’s Most Admired Companies®, Insurance: Life and Health category, March 1, 2016. 3 Our Company, www.prudential.com. Assets under management as of June 30, 2016. 4 Ratings, www.investor.prudential.com, as of August 3, 2016. AAA (Extremely Strong) is the highest of 24 ratings that Standard & Poor’s extends, the lowest being R (has experienced regulatory action), and is a measure of claims-paying ability. Aaa (offers exceptional financial security) is the highest of 21 ratings that Moody’s extends, the lowest being C (having extremely poor prospects of ever offering financial security) and is a measure of financial security. A++ (Superior) is the highest of 15 ratings that A.M. Best extends, the lowest being F (In Liquidation), and is a measure of claims-paying ability. AAA (Exceptionally Strong) is the highest of 21 ratings that Fitch Ratings extends, the lowest being D (Distressed) and is a measure of insurer financial strength. Ratings are not an indication of any variable portfolios’ performance, which fluctuates with market conditions. Ratings are not a guarantee of future financial strength and/or claims-paying ability.
trillion in total assets under management3 $1.2
A.M. Best: A+ (Superior)4
Standard & Poor’s: AA- (Very Strong)4
Moody’s: A1 (Good)4
Fitch: A+ (Strong)4
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Prudential’s Company Overview
1 Prudential Brand Image Study, Wave 43, January 2013. 2 FORTUNE Magazine, 2015 World’s Largest Companies, March 1, 2015. 3 Prudential Brand Image Study, April 2015. 4 Our Company, www.prudential.com. Assets under management as of March 31, 2015. 5 Prudential Group Insurance Book of Business 2013 Client Satisfaction Survey. 6 Prudential Group Insurance Book of Business Results, 2014. 7 2014 Statutory Annual Statement of Prudential Excerpts (Blue Book). 8 Prudential Book of Business Results, 2014.
►Ranked 55th on Fortune 500 list2 ► The Rock®—one of the most widely recognized brands in the U.S.1
► 96% Brand Recognition among consumers3
► 97% Client Satisfaction5 ► 96% Client Persistency6
►More than 11,000 Group Life customers7 ►More than 3,000 Short Term Disability customers8
►More than 3,900 Long Term Disability customers8
► 21 million covered employees7
► Institutional and individual customers in more than 40 countries1
►Over $1.2 trillion in total assets under management4
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Prudential’s Group Product and Service Portfolio
Disability Solutions
Life & Retiree Solutions
Voluntary Solutions
►Short Term Disability (STD) ►State Mandated Disability Plans ►Long Term Disability (LTD) ►Absence Management (FMLA) ►ADAdvocateTM Leave
Support Services ►Return to Work Services
►Basic Term Life ►Basic AD&D ►Retiree Term Life ►Retiree Life Buyout ►Business Travel Accident ►Group Universal Life ►Multinational Pooling ►Captive Reinsurance
►Critical Illness ►Accident ►Optional Life & Dependent Life ►Voluntary AD&D ►Voluntary STD ►Voluntary LTD ►Voluntary Retiree Reducing Term
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© International Group Program
Key Topics
Background Information
Company Info & Background
Social Security
Summary of Social Security
Benefits
Private Practice
Customary Private Employee Benefits:
Type & Level of Benefits / Survey
Data / Plan Design / Benchmarking /
Trends
Multinational Pooling
Specifics of multinational
pooling in the US
Legislation
Current legislative issues with
significant impact on the funding of the benefit plans / How are employer
and employees affected?
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© International Group Program
Social Security Benefits
• Retirement Income Benefits
• Disability Income Benefits
• Medical Benefits (Medicare) Hospitalization Supplementary Medical Medicare Advantage Plans Prescription Drug Coverage
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Summary
© International Group Program
Key Topics
Background Information
Company Info & Background
Social Security
Summary of Social Security
Benefits
Private Practice
Customary Private Employee Benefits:
Type & Level of Benefits / Survey
Data / Plan Design / Benchmarking /
Trends
Multinational Pooling
Specifics of multinational
pooling in the US
Legislation
Current legislative issues with
significant impact on the funding of the benefit plans / How are employer
and employees affected?
8
© International Group Program
Customary Private Employee Benefits
• Retirement Benefit Plans Defined Contribution Defined Benefit
• Group Life Insurance/Accidental Death and Dismemberment Employer Paid (Basic Life) Employee Paid (Optional Life)
• Group Disability Income Benefits Leave Management Short Term Disability Long Term Disability
Type of Benefits
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Customary Private Employee Benefits
• Medical Benefits Consumer Directed Health Plans (CDHP’s) Health Maintenance Organizations (HMO’s) Preferred Provider Organizations (PPO’s) Point-of-Service (POS)
Type of Benefits (Cont’d)
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Customary Private Employee Benefits
• Dental
• Voluntary Benefits Vision Permanent Life Plans Long-Term Care Critical Illness Accident Pet Insurance Legal Plans Group Auto and Homeowners Insurance
Type of Benefits (Cont’d)
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Customary Private Employee Benefits U.S. Market Environment
Trend Implication
Cost Sensitivity Need to control overall employee benefits costs.
Competitive Labor Market Need for a competitive benefits offering.
Delayed Retirement Employees are staying in the workforce longer than anticipated.
Less Financially Secure Workforce
An employee’s state of financial wellness can have an impact on workplace productivity.
Multicultural and Multigenerational Workforce
Varying benefits and communication needs and preferences across all employees.
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Customary Private Employee Benefits U.S. Competitive Environment
Trend Implication
Focus on Customer Experience
Investments in new technology and capabilities to drive and track a more positive customer experience for employers and employees.
Low Interest Rates U.S. based carriers have to search for new areas for growth.
Mergers and Acquisitions A changing competitive landscape and market environment.
New Technology Platforms Benefits technology and education firms are offering consultative resources and tools for employers and employees.
Slow Adoption of Private Exchanges
Assessment of investment dollars and prioritization among carriers and exchanges.
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Customary Private Employee Benefits Research on Employee Benefits
Ninth Study of Employee Benefits: Today & Beyond. The Prudential Insurance Company of America, February 2016. Conducted for Prudential by Center for Strategy Research (CSR), an independent market research firm.
Ninth Study of Employee Benefits: Today & Beyond
Current Landscape: Broker and Employer Objectives and Strategies
Return-to-Work Programs are More Than a Cost Savings Strategy
Voluntary Benefits: Here to Stay
Employee Financial Wellness and the Role of the Workplace
Employee Benefits and Enrollment Communication
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Research on Employee Benefits
• Changing broker role
• Larger economic impact on employee benefits strategies for employers
• Controlling health care costs remains the top benefits objective for benefits decision makers
• In addition to health care related costs, benefits decision makers are also looking to reduce the cost of non-health care related group benefits
• Employers are recognizing a link between employee benefits and employee financial wellness and are focused on educating employees
Changing Landscape of Employee Benefits
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Key Topics
Background Information
Company Info & Background
Social Security
Summary of Social Security
Benefits
Private Practice
Customary Private Employee Benefits:
Type & Level of Benefits / Survey
Data / Plan Design / Benchmarking /
Trends
Multinational Pooling
Specifics of multinational
pooling in the US
Legislation
Current legislative issues with
significant impact on the funding of the benefit plans / How are employer
and employees affected?
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© International Group Program
Legislative Update*
• Most Changes Became Effective on January 1, 2014
• Key Points: Individuals are Required to have Health Insurance Small Business Tax Credits Pre-Existing Condition Insurance Plans Establishes Health Insurance Exchanges Eliminates Lifetime Limits on Insurance Coverage Expanded Coverage for Young Adults Free Preventative Care for Seniors
* www.healthcare.gov
(National Healthcare Reform)
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© International Group Program
Legislative Update
• Future Implementation Dates: 2015
‐ Employers with over 50 full-time employees must offer health insurance (“Shared Responsibility” mandate)
‐ Midsize Employers (50-99 employees) will not be subject to "play-or-pay" penalties until 2016
2017 ‐ No preexisting conditions for anyone, including high-risk customers.
2018 ‐ All healthcare plans must now offer preventive coverage. ‐ The "Cadillac" tax for higher quality coverage is implemented.
2020 ‐ Fully eliminates the Medicare Gap
* www.healthcare.gov
(National Healthcare Reform)
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© International Group Program
Key Topics
Background Information
Company Info & Background
Social Security
Summary of Social Security
Benefits
Private Practice
Customary Private Employee Benefits:
Type & Level of Benefits / Survey
Data / Plan Design / Benchmarking /
Trends
Multinational Pooling
Specifics of multinational
pooling in the US
Legislation
Current legislative issues with
significant impact on the funding of the benefit plans / How are employer
and employees affected?
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© International Group Program
Multinational Pooling in the U.S.
• Non-contributory Basic Life
• Escalated Interest in Pooling U.S. Business
• Year-over-year Increase in Cases Reviewed for Pooling
• RFPs Requesting Pooling Consideration
• Lunch ‘n’ Learns Creating Market Awareness
• Debunking the Myth of Excluding U.S. Business from Pools
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Consultative Marketing Materials
White Paper
Flyer
Client & Advisor Directed Presentations
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Our Commitment to IGP
Committed to Pooling with IGP Dedicated resources to support IGP business
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Thank you for your attention! Key Topics We Discussed:
Background Information
Company Info & Background
Social Security
Summary of Social Security
Benefits
Private Practice
Customary Private Employee Benefits:
Type & Level of Benefits / Survey
Data / Plan Design / Benchmarking /
Trends
Multinational Pooling
Specifics of multinational
pooling in the US
Legislation
Current legislative issues with
significant impact on the funding of the benefit plans / How are employer
and employees affected?
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© International Group Program
www.prudential.com
Contact Info
Prudential
+1 973 548 5696
Director, Product Management Advanced Markets
Jesse Ogushwitz
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© International Group Program 25
Group Insurance coverages are issued by The Prudential Insurance Company of America, a Prudential Financial company, Newark, NJ Prudential does not provide tax, accounting, or legal advice. Please consult your own professional for advice in these matters. © 2016 Prudential Financial Inc. and its related entities. Prudential, the Prudential logo, and the Rock symbol are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.