- De-Mutualization is a huge deal. Currently Ohio National is not a stock company, meaning their policy owners are the shareholders, not openly traded. By de-mutualizing, they become a stock company and the performance of the company on the stock market will be vital to the majority shareholders, whereas as a mutual everyone was equal, now there might be a larger voice that does not put clients first but really outs stock first.
- As a mutual company, certain rules had to be followed, now there are still rules but the information needed to provide is different, and the focus of the company becomes revenue and stock performance, not policyholder returns.
- As a mutual company, Ohio National recently came in with one of the lowest dividends for 2021. With the downward pressure on interest rates, this trend will continue to occur, and it will affect all of the big major mutual over time Ohio National was going to lose their competitive edge and had to do something in the whole life space. With that said, they will no longer be a participating policy, and it will affect rates within the whole life market.
If you have clients with Ohio National, don’t panic. Ohio National is still a solid company, and the products are top notch. However, the promise of their whole life has changed, and there may be a need to look at them. As an adviser here is what I would do with a Ohio National Whole Life Client:
- Schedule a meeting to discuss the situation
- Do a fact finder and update their situation
- Ake a look at why they have the policy, and what their goals are
- Look at the situation, and provide advice, with the caveat that 85% of the policies are good right where they are at.