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In an effort to expand its customer-centric portfolio of products, St. Paul, Minn.-based Securian Financial Group ( billion in total assets) turned to Woodland Hills, Calif.-based third-party administrator LifeCare Assurance Company for help developing Securian's new long-term care insurance product, LTC Guard. Securian's Ben Roth, director of life product research and promotions, and Mary Anne Smith, director of individual business technology, recently spoke with I&T Associate Editor Maria

I&T: How does Securian Financial Group approach product development?

Roth: We have four guiding principles when we decide to introduce a new product: Will the product meet social need; is it a product that our advisors believe is important to their clients; can the risk involved be properly managed; and can the infrastructure and technology be put in place in a cost-effective manner?

I&T: What was your strategy in developing LTC Guard?

Roth: Our advisors in the Securian Financial Network recognize that long-term care is a very important issue for their clients. In addition, our nation's demographics and public policy are driving the need for more Americans to consider long-term care insurance. Once we determined that the risks of offering a long-term care product could be properly managed, we began a serious exploration of the infrastructure alternatives [in June 2005]. Securian selected LifeCare Assurance Company as our outsourcing partner because they have experience managing long-term care insurance and they have the infrastructure to handle it.

Smith: We discovered during due-diligence visits that the key benefit to using LifeCare Assurance Company was that they had knowledge and tools to administer a product that could easily blend with Securian's existing infrastructure and product offerings [i.e., individual annuity, retirement plans, group life insurance and investment products].

I&T: What were the business and IT processes for creating the product?

Roth: Our initial step was to finalize the design of the product. It didn't take long to identify the general design parameters of the product. We started by knowing we wanted to offer something our advisors could get behind and sell with conviction. Their target market is high-net-worth individuals -- primarily the baby boomers, who are now 45 to 65 years old. That also is the target demographic for selling long-term care insurance as an executive benefit to small- and medium-size employers, which is another market in which our advisors are active. Long-term care insurance premiums are fully deductible for many companies that offer it as an employee benefit. The product design was completed in about a month, and then the project team took the product from the drawing board to introduction in five months.

Smith: LifeCare already had most of the infrastructure in place, so the bulk of our work was to integrate our respective systems. For example, we were able to interface our extranet portal,, with LifeCare's Web-based applications and provide a seamless user experience for our advisors.

I&T: How has the product been accepted?

Roth: We went live with the product in March. Our advisors are very excited to offer a new LTC product, and client applications have just begun to arrive. We are very confident that LTC Guard is designed to meet the needs of the customer.

Guiding Principles

Securian Financial Group asks four questions before deciding to introduce a new product:

1. Will the product meet a social need?

2. Will advisors believe it is important to their clients?

3. Can the risk involved be properly managed?

4. Can the infrastructure/technology be set up cost effectively?

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