New York-based Metropolitan Life Insurance Co. is reevaluating the way it sells insurance through the bank channel.
It has hired Jamie Shepherdson and Greg Brakovich, the former co-chief executive officers of Equitable Distributors Inc., the division of Axa Financial Inc. that distributes annuity and insurance products through third-party channels.
The two executives have joined MetLife's Security First Group Inc. in Los Angeles in the newly created post of co-chief executive. Security First designs and makes investment products, and distributes them through banks, credit unions, and regional investment firms. It specializes in tax-deferred annuities and other retirement plan products. MetLife distributes its variable annuity and related products through Security First and divisions of New England Life Insurance Co. and General American Mutual Holding Co. The mammoth insurer bought General American for $1.2 billion in 1999. But that distribution mix could change, according to Susan Bumstead, a company spokeswoman.
The new CEO team is to assess whether MetLife units should continue to sell through the various channels or whether all sales should go through Security First, which now markets products through about 65 national, regional, and community banks, she said.
"MetLife has not reached their potential, and Jamie and Greg have an excellent track record in terms of building nontraditional distributions," said Kenneth Kehrer, president of Kenneth Kehrer Associates in Princeton, N.J. The research and consulting firm specializes in bank distribution of investments and insurance. "It's a natural that they will want to integrate the marketing through these various channels," he said.
In 1999, Security First sold $118 million of fixed annuities through banks, more than doubling its 1998 output, according to Mr. Kehrer. However, he added, Security First sold only $89 million of variable annuities through banks last year, placing it 21st in this category of the bank channel.
Much of MetLife's bank sales is through such community institutions as Signature Bank in Bad Axe, Mich., City National Bank of Fort Smith in Arkansas, and Washington Trust Bancorp in Westerly, R.I.
Mr. Kehrer said that Mr. Shepherdson and Mr. Brakovich would have an opportunity to make products the market needs.
"In their past positions as distributors, they've always had to try and talk the insurance company" into offering the products the market wants, Mr. Kehrer said. "Now, they are co-heads of a life company."
Metropolitan Life, through its subsidiaries and affiliates, had $418.8 billion of assets under management as of Dec. 31.
Security First has $4.7 billion of consolidated assets and revenues of $206 million.