Update News for May 2009

Here is a quick run-down on what you will find in this bulletin:

• • Changes and Improvements

     

     

  • A.M. Best Ratings in Comparisons

     

     

  • Are A.M. Best Ratings Enough?

     

     

  • Annual & Modal Premiums in Comparisons

     

     

  • You Can Give It a Try Early

     

     

  • Coming Soon – New Service for On-Line PDA/Phones

     

     

  • Changes for All Web Software

     

     

  • What’s Next?

     

     

These topics will be dealt with in more detail throughout this bulletin.

Changes and Improvements – midmonth MayWe were very close to releasing the newest version of our Windows program in April but further changes and bug repairs convinced us to hold it until later in May. While the changes which we discuss here may not seem that significant, there were lots of trickle down implications to those changes that required a lot of modifications. For the most part we think that the software is ready but we want to beat it up some more before putting it into a general release. You can help us check it out if you want – keep reading.

Whether you take an early peak at the program or not, we think that you will like the improvements that we are getting ready to roll out and we think that you will find that the wait was well worth it.

If you want to give the new version of the program a try here is a webpage where you can download the new program file and save it into the \COMPLIFE folder on your computer. This will replace the existing program file:

www.compulife.com/newwindowsprogramThe most notable change is that the comparison window can have two new columns of information that you can access by new choices added to the “Options” at the top of the comparison window.

The first of the new options is a column, next to the company name, with the A.M. Best rating.

A.M. Best Ratings in ComparisonsAs many will know A.M. Best ratings appear next to the company name in the comparison results at the www.term4sale.com website. A number of subscribers have commented that they would like that A.M. Best column to also appear in the Compulife comparison results on their computer. We decided, as we were modifying the Internet version, preparing it for the new PDA online option, that it was time to introduce that feature into our windows software.

When the “Show A.M. Best Ratings” option in the Display Product Comparison window is checked the A.M. Best rating for each company will appear next to the company name in the comparison window. Previously, the only way to see the rating was to double left click on the product. The rating appears next to the company name in the Display Single Product window. This still works and it is important to use because the rating that appears in the Display Single Product window identifies the date that the rating was assigned and any A.M. Best modifiers such as “g” for “group” or “u” for “under review”. If you have enabled the Financial Size Category on the Enter Client window, the Roman Numeral financial size will also appear in the rating information on the Display Single Product window. The new column in the comparison window ONLY displays the letter rating and A.M. Best would argue that is not enough information alone.

Once again, the A.M. Best column in the comparison results is an option that you choose from “options” at the top of the comparison window. If you do not check that option the display will work just as it did before.

Are A.M. Best Ratings Enough?With the downturn in the economy we have seen a rise in interest in life insurance company ratings. There has also been a rise in discussion and commentary as to the value of A.M. Best ratings versus other rating agency ratings and there have been questions as to why Compulife does not offer ratings from other ratings agencies in our software.

The reason that we do not have multiple rating agencies ratings is pretty simple – we have no expertise in determining the financial strength of life companies. While that answer may not sound like an answer to the question it is if you think about it.

Let me say it again very, very clearly: Compulife has NO expertise with respect to ratings – NONE. By comparison it is quite clear that the ratings agencies do have expertise. So, the ratings agencies know about life company viability and we don’t. Therefore, we believe that there is a big dark hole that we could fall into if our subscribers began using our software to start comparing the ratings of multiple ratings agencies. And the way that we would fall into the hole would be by a subscriber falling into the hole and dragging us down with them.

Consider this: when a rating agency awards a higher rating to one company, versus another company, then that rating agency is offering THEIR opinion that the company they rated higher is a safer and more secure company. Why does the rating agency think it is safer and more secure – who knows? It’s their opinion. Even if they give reasons for their opinion, are they right?

Another rating agency may have a different opinion. The other rating agency may say that the company that was given the lower rating by the first rating agency, is actually stronger and safer than the company that got the higher rating. The second rating agency may give that company the higher rating. They may give a reason for their opinion, are they right?

So now you have two ratings agencies, offering two completely contradictory opinions. If you provide those two ratings to the insurance buyer, what is it that they want to know? They want to know which ratings agency has the correct opinion or which rating is the better or more important rating. They are going to ask you what you think and you are going to be very attempted to give an opinion. After all, the client will reason, why did you show me the two ratings when they disagree with each other?

Compulife is certain NOT going to give an opinion about which rating is correct and we would certainly caution you to think twice before you do. The correct answer is, WE DO NOT KNOW and we are pretty sure that the average agent doesn’t know either. The problem is that Compulife cannot control the agent and we cannot stop you from offering an opinion. And if you relied on our software as the source of information for your opinion then we get sucked into your opinion.

While everyone has an opinion, and while we firmly believe that everyone is entitled to their opinion, you will find that you are also responsible for that opinion particularly if a consumer relied upon that opinion to determine which life company was safer. If the consumer goes with the company you said was safer, and if that company goes out of business, then you will be held responsible by the consumer for the opinion that you gave. And if the consumer is sufficiently unhappy with you, then off to court you may go.

And while some may disagree with my opinion about opinions, remember that anytime two parties stand in front of a judge, you are in essence dealing with two different legal opinions that cannot be reconciled between the parties. It is now left up to a judge or a judge and jury to decide which opinion is the correct opinion. In coming to a judgement the judge is now offering an opinion about the opinions. And it may not end there. Many cases are appealed and move to higher courts because the opinion of the lower court judge has been put into question.

And if you begin giving an opinion about the opinion of one rating agency versus another rating agency, then you have also become a judge and you have set yourself up as smarter than the ratings agencies. And that is the hole that we believe you fall into. Worse, we do not see how you don’t take Compulife down with you if we were the one giving you multiple ratings from multiple rating agencies.

So when a client asks you which company is safer versus another company, remember that when you give the client information you want to be certain that it is not your opinion that you are giving. You want the client to understand that you are simply providing the opinion of the ratings agency and that they know more about this stuff than you do. Once again, you need to make it clear that the rating itself is only an opinion and it is NOT your opinion.

Sometimes it’s good to be like this guy:

Hogan’s Heroes – Sgt SchultzAnd Compulife is certainly not going to do anything to cloud up the issue. We provide you with A.M. Best information which is the opinion of A.M. Best. Are A.M. Best ratings the best ratings? We don’t know. What we know is that A.M. Best has been around as long as any rating agency and they are generally respected as being a serious player in the ratings business.

Annual & Modal Premiums in ComparisonsThe current version allows you to obtain the annual OR modal premium in comparisons. The new version that will be released later in May will permit you to have BOTH the annual premium and a modal premium (of your choice) shown in the comparison results. For example, if you choose the option “Annual & Monthly” then the annual premium will appear followed by a new column with the monthly premium.

Of course this added column will require a wider display and so you will see the comparison window widen out when you select this option. It took some fooling around with the software to get the window automatically expanding and contracting and it was one of many seemingly incidental changes that needed to be made to accommodate the new feature.

We think the new option will be of particular value in situations where a company does not offer a particular premium mode. For example, some companies do not have a quarterly premium mode and so if you do a comparison of quarterly premiums, that company will not appear. However, if you do an Annual & Quarterly comparison, the company’s annual premium will display and the shortform “N/A” (for not available) will appear in the quarterly column.

This will be of particular assistance to those quoting no lapse U/L products. Many companies do not have simple monthly conversion factors for their no lapse U/L products and because of that Compulife is not able to currently quote those premiums. We sometimes hear from new subscribers wondering why their favorite companies disappeared from monthly premium comparisons of no lapse U/L products. Until this new feature, we generally encouraged subscribers to avoid comparing no lapse U/L products by monthly premium. Our view will be that those comparisons should now be done using “Annual & Monthly”.

Comparison printouts were another incidental change that we needed to handle with the new option. While there was room on the summary page for both annual and modal premium, the comparison page which shows 6 products per page did not allow for both. If you do an annual and monthly comparison, the comparison page will only show the annual premium. Therefore, if you want to show both premiums, you will need to set the number of comparison pages in the “Print Options” to zero. This will give you a summary page only printout.

You Can Give It a Try EarlyIf you want to give the new version of the program a try here is a webpage where you can download the new program file and save it into the \COMPLIFE folder on your computer. This will replace the existing program file:

www.compulife.com/newwindowsprogramComing Soon – New Service for On-Line PDA/PhonesWork on the new service for PDA/phones is coming along well. Essentially this service is a new web quoting option for subscribers and it is intended for the use of subscribers ONLY. The new web quoting capability is NOT designed to be a public quoting service, it is for individual subscriber use ONLY.

Currently Compulife has an early variation of this service running at:

www.termcomparisons.cc/blackberryIf you have a PDA/phone that can surf the web, we would encourage you to check it out. When the new, upgraded service is available, the above link will cease offering quotes and will offer an application form that lets you apply to have a personalized PDA/phone version created just for you. Once you complete the brief application, Compulife will email you a link for your new PDA/phone quote system.

The difference between the generic service that is currently available, and what is coming, is that the new PDA/phone service will be personalized for each subscriber. You will have a web address that is your web address for your personal use – it is NOT intended to be a web site that you let other people use. The web pages and quote format are being specifically designed for the “small screen” of your PDA/phone. You will also have two web addresses for your PDA/phone. One web address will let you run quotes AND a second web address will let you select the companies that you want to include in your quotes. Once again, these addresses will be for your use ONLY.

Changes for All Web SoftwareHaving noted that, a number of the improvements that we are making for the PDA/Phone service, such as showing annual premium and a modal premium, will be placed into our web based software that is used for public web quoting. These changes, together with our new categories, will be made available in the coming upgrade to our web software. Once that software has been implemented at www.term4sale.com, we will be making it available as a FREE upgrade to our current internet engine subscribers and to our authorized web providers.

That upgrade will be available with new documentation that highlights the changes and improvements and how they can be integrated into current web sites. We will let our Internet engine subscribers know when that is ready.

What’s Next?Once our work on the web engines and PDA/Phone software is complete, we will be turning our attention to some important maintenance work that is needed to the data entry systems. Those programs have not been updated for quite some time, and some need to be converted to take advantage of the newer programming compilers that we have been using for the Windows software that we already distribute to you. Our goal is to make it easier to program future software, which will ensure that we can roll out changes and improvements more efficiently.

Further, having reviewed where we are heading over the next few years, and the changes that we would like to be able to make in the future, we have decided to stop and do a much more extensive overhaul than simply changing our data entry software. We have determine that we would also like to implement a better data storage structure that will make maintenance easier on both a data entry basis, as well as a programming basis.

To achieve our goals in this regard, we will be spending a fair bit of time reviewing our new data storage needs, and then building conversion software that will convert our existing data files into our new data file structure. Once we have done that, we will then introducing new comparison software that does exactly what it does now, but which derives its results from the new data structure. In other words, you will end up with a new program that does exactly what the old program did/does.

Once this first stage is completed, we will have both old program and old data, with new program and new data. Moving forward we will use the old data entry systems to maintain the old version, then converting old data to the new data forms for general distribution.

The next stage is to create the new data entry systems that talk to the new data format. Once we are satisfied that the new data entry system give us everything that we have now, we will then switch to the new data structure alone. We will only do this once we have thoroughly tested the new software to ensure it gives us no problems in maintaining the date. This may take several months. As far as the part you use, by the time we make that transition, you will have been using the new software for several months.

The point of sharing this with you is that the process will be quite lengthy and so from this fall throughout most of 2009, you will not be seeing many changes and improvements to the software that you use, even though the underlying foundation will be going through a massive change. Once the foundation has been reconstructed, and all the tools to work on the foundation have been built, the program will be in a position to make some substantial moves forward.

Think of it as transplant surgery, where you need to keep the patient alive and well, at the same time as you are swapping out the organs.