HARTFORD, Conn.--Most successful small life insurance companies share specific product and performance characteristics giving them an edge among similar and somewhat larger competitors, according to a new study by Conning Research and Consulting, Inc.

"Our analysis indicated that the successful small life insurer tends to focus on ordinary life and annuity products," said George McKeon, analyst at Conning Research and Consulting.  "In fact, for the successful companies, the revenue from ordinary life and annuity products represented 96% of the total. Additionally, we see a strong growth in life premium in force-fully 8.5% versus 5.9% for small stand alone and single (SA&S) companies, and 3.2% for the industry at large."

The Conning Research study, "Successful Small Life Companies: A Statistical Analysis" defined a universe of 321 companies with direct premium from $10 million to $500 million. This group represents 40% of companies in the market, but wrote only 9.8% of the 2003 direct premium on ordinary life and annuity products. Within this group, Conning isolated 207 companies that received 75% of more of direct premium from ordinary life and annuity products, then further refined the selection to 53 of those companies operating as either standalone companies or as members of single-company groups. The study then focused on the most successful of the group to determine common strategies.

"In analyzing the successful small company, we also, of course, noticed a dramatic focus on efficiency of operations," said Stephan Christiansen, director of research at Conning Research and Consulting. "The ordinary L&A benefit cost for the successful companies was 13 percentage points lower than that of the whole small company group, and ordinary life and annuity commission expense for the successful companies was 20% lower than that of the entire small company group."

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