LPI News & Views speaks to David Lessing and Scott Taylor from Beechwood, and Nar Almeida and John Uprichard from Kane LPI, following the recent launch of Beechwood’s guaranteed investment plans Accumulator Plus and Escalator Plus.
In November 2013, Kane LPI Solutions began work with Beechwood to help define and implement a Bermuda-based trust structure to support both a fixed and a variable annuity- style product to take to market.
As Beechwood’s David Lessing explains the current market is, in his view, primed for the launch of such guarantee products, with the firm confident that there is significant demand from investors and their advisors. “We’re excited about the plans,” he says, “because we don’t think there are any products currently on the market that can match Beechwood’s combination of a strong guarantee, innovative features, low fees and attractive incentives for financial advisors.”
The choice of Kane LPI Solutions as the third party administrator on the project was a relatively straightforward one. Scott Taylor, President of Beechwood, states: “Kane has an unparalleled breadth of expertise in helping develop and administer products like ours. Kane LPI was able to move quickly and acted as a valued ‘thought partner’ at every stage in the process.” He also highlights their expertise in designing the plans in such a way as to be both attractive to investors and advisors, while also being relatively simple to administer and service.
“We have established a strong track record for our ability to provide comprehensive, scalable and cost-effective turnkey solutions for the international investment market,” says Kane LPI’s Nar Almeida. “We’ve also become recognized for our ability to go beyond the services of most third party administrators by being able to incorporate the insurance management component into our overall offering, which in this case is provided by Robert Eastham and Kane Bermuda’s insurance management team,” adds John Uprichard, Managing Director of Kane LPI.
This all-encompassing capability is becoming increasingly important to the Kane offering. As David points out: “We highly value being able to rely upon a trusted partner to assist us in multiple capacities. We believe Kane does a better job than many other organizations in being able to coordinate its various businesses and present its capabilities as ‘one firm’ to its partners.”
The Kane team were proactively involved in a number of key stages. At a high level, these included: conducting the initial implementation study; defining the parameters of the products based on the specifications from Beechwood; creating the underlying infrastructure based on the firm’s proprietary IMS system (spanning both front and back-end); putting in place the operational process flows and procedures (including the required compliance components, cash model and trust structuring); carrying out a thorough test on all components and going live with the product.
As with any project involving multiple moving parts and different parties, effective team-work is critical to its overall success. As David explains: “No new product launches successfully without being shaped by feedback from a range of stakeholders. We think we’ve ended up with two plans that will be truly distinctive in the marketplace – but we only got there by partnering with advisors, banks and our administrators, and incorporating their thoughts.”
Nar emphasizes the importance of regular interaction with Beechwood and its hedging partner. “The teams from all parties held multiple weekly sessions focused on ensuring items were discussed, agreed and then closed out or implemented, as agreed. This allowed the project to continue to move forward in an organized and progressive fashion.”
Launched at the beginning of August, the two investment plans are in the near-term targeted at mid-to-high net worth individuals in the Americas (excluding US) and (through Beechwood’s regional operation in Dubai) the Middle East. However, moving forward the plan is to extend the distribution to parts of Asia and Europe in the coming months. In terms of Kane’s ongoing involvement, the LPI team will continue to provide full TPA administrative support, including pre-sale support to new business and on-going policyholders, as well as advisor servicing.
Speaking at the time of the launch, Scott said: “As a relatively new company, Beechwood has invested in building its reputation for distinctive solutions and is not burdened with the expenses that many of its competitors face from older technology and a confusing array of outdated products. Beechwood has instead focused on developing a small set of attractive products that can deliver attractive investment results with superior risk management.”
(Note: The Beechwood family of companies includes Beechwood Re, a reinsurer domiciled in Grand Cayman and regulated by the Cayman Islands Monetary Authority, and Beechwood Bermuda International Ltd, a licensed long-term insurer located in Hamilton, Bermuda and regulated by the Bermuda Monetary Authority.)