Colin Devine, Managing Director of Citi Investment Research, is known for his candid and well-informed analysis of the life insurance industry. In this issue of The Forecaster, Colin shares his views on the health of the industry with Jim McArdle, Senior Vice President of Sales and Marketing for Transamerica Reinsurance.

Dave Dorans, Vice President of Mortality Solutions, spoke with Jessica Bibliowicz, Chairman and Chief Executive Officer of National Financial Partners, about the changes in the industry over the past 18 months. Jessica believes that the response from carriers and producers largely has been positive. Today they are focusing more on the value that life insurance can play in the life of a policyholder rather than on selling product. This, she believes, can help change the mindset not only of insurers but also the public at large.

Many factors contributed to a prosperous life insurance market during much of the last decade. Companies were introducing new product features at competitive prices. Capital market financing was available at low rates. And companies, buoyed by appreciable sales growth, low capital costs and robust investment earnings, reported record profits. But this prosperity was challenged severely by the financial crisis. President Paul Rutledge recently discussed the demanding issues facing life insurers since the onset of the financial crisis with Fred Sievert, former president of New York Life and current chairman of the Actuarial Foundation.

The recent financial crisis demonstrated that sophisticated computer models are no substitute for sound judgment. As the life industry begins its recovery, companies and regulators alike are reconsidering the complex tools on which our business now depends and how to improve our collective skill at using them. Transamerica Reinsurance discussed the near-term future of modeling with Donna Claire, president of Claire Thinking, Inc., a consulting firm which specializes in risk management and regulatory issues.