of the past. But don't tell that to the folks at Hartford Life Inc., the nation's largest underwriter of variable annuities. The Simsbury, Conn., company is betting that banks, along with securities brokers, will become major outlets for the sale of life insurance products, just as they have for annuities. "Life insurance has been a growth product for our company," said Lon A. Smith, Hartford Life's chief executive officer. "And it's a huge untapped market for banks." Hartford Life's initiative comes as other insurers also look to banks and other nontraditional distribution outlets to build their sales of both insurance and annuities. In recent weeks, several underwriters, most notably John Hancock Mutual Life, have announced plans to sell more insurance through banks. "There is a lot more competition today than there has ever been," Mr. Smith said in an interview. "People would love our shelf space" with banks and broker-dealers, "and we are working to keep them out." Though much of this shelf space has been occupied by annuity products for sale, Mr. Smith said that Hartford Life now is working to sell many kinds of retail life insurance policies through banks, including simple term insurance. The emphasis, however, will be on variable life, a policy that fits well with the estate planning needs of wealthier Americans and charges premiums that are higher than for the average life policy, he said. "The real potential" for both banks and insurers, Mr. Smith said, "is to sell to more affluent customers. It won't be done by a teller who just happened to go to a six-day course. It will have to be done by competent estate planning folks in banks." But consultants say that Hartford Life, which only generates a few million dollars of premium sales through banks now, has its work cut out for it. "Hartford has become an extraordinarily powerful player in the area of annuities, but they have done it through the broker-dealer side of the bank," said Valerie Jordan, a bank insurance consultant based in Belchertown, Mass. "When you get into the area of life insurance, you can deal with other parts of the bank, and that's an extremely big challenge." To address the challenge, Hartford is relying on an army of 160 insurance wholesalers to form relationships with trust departments, insurance agencies, and other units of banks. The insurer refuses to say more than that it has formed life insurance sales relationships with "a few dozen banks," a far cry from the 450 or so banks through which it sells annuities. "For us, life insurance is where annuities was eight or nine years ago," said S. Kimberly Welch, Hartford Life's director of financial institutions development. Despite its corporate name, Hartford Life, which is majority owned by Hartford Financial Services Group, had traditionally been an also-ran in the sale of life insurance, focusing instead over the years on products such as group medical insurance, guaranteed investment contracts, and annuities. In recent years, however, that's changed. Hartford has pushed the sale of life insurance, particularly variable life, through a network of large brokerages and independent agents. In the past four years, its sales of individual life policies have been rising 14% annually, though the industry's life sales have fallen slightly. In the third quarter, Hartford Life reported a 13% jump in life insurance operating income, to $17 million. And last year, the insurer was ranked second in the nation behind Northwestern Mutual Life in the sale of ordinary life policies, which includes whole, universal, term, and variable life products, according to A.M. Best. Still, annuities rule the roost. In this year's third quarter, for example, Hartford Life generated only 17% of its $100 million of operating earnings from life insurance sales, while getting two-thirds from annuities. The buildup in annuities goes back to the late 1980s when the company set out on a course that would distinguish it from the life insurance underwriting fraternity in both product and marketing focus. First off, it recognized that the future of the insurance industry would lie in products that could help Americans generate income for a lengthy retirement, not merely prepare for death. And though most large insurance underwriters remained loyal to large armies of captive and independent agents, Hartford began selling aggressively through banks and nonbank brokerages in the belief that all potential sales outlets must be explored. Mr. Smith still laughs when reminded about the time a zealous Hartford Life representative contacted J.P. Morgan & Co. about selling annuities only to be told the banking company has no retail branches. Today Hartford sells annuities through virtually every major bank in the country, generating 38% of its individual annuity sales through banks. Besides the effort to sell more life insurance, Mr. Smith is also seeking to sell more group disability insurance, mutual funds, and 401(k) plans to small businesses in an effort to diversify beyond its heavy reliance on annuities. But that's about as far as the conservatively managed company wants to go for now. Though Mr. Smith refers to Hartford Life as a financial services concern, don't expect the company with the stag as its mascot to leap into businesses such as commercial banking, investment banking, or retail brokerage. "We are relatively risk-averse," Mr. Smith said. "It's easy to make acquisitions like that; all you have to do is write big checks; but it's another thing to make them work for shareholders."

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