Robert H. Benmosche has little use for financial supermarkets.
As banks, brokerages, and insurers rush to broaden their product lines, the incoming chief executive officer of Metropolitan Life Insurance Co. is staying the course. He plans to keep the 130-year-old company focused on life insurance, annuities, and long-term care.
In a wide-ranging interview, Mr. Benmosche said he sees little to gain in pursuing retail brokerage or commercial banking. Though MetLife has applied for a thrift charter, the company says that is mostly for selling trust services.
"To be in the commercial banking business today, you need to commit to being a very high-tech, high-volume company," Mr. Benmosche said. "That's not our business."
Mr. Benmosche, 54, is scheduled to become chairman and CEO of MetLife on July 1, assuming control of a company that is known far and wide for its mascot, the cartoon character Snoopy. MetLife is the nation's second- largest life insurer, after Prudential, measured by amount of insurance in force.
Despite Mr. Benmosche's caution about diversification, he has ample experience in other parts of financial services. He worked at Chase Manhattan Corp. in human resources before joining PaineWebber Inc. in 1982. Most recently he has been MetLife's president and chief operating officer.
Excerpts of the interview follow:
Some people call life insurance the laggard of financial services. Is that fair?
BENMOSCHE: In the past, insurance companies focused on acquisition of customers. They didn't think about how to build relationship with customers.
I can only talk for MetLife, and clearly we are putting a lot of effort into data mining. We have 8 million customers on the individual side alone, so we are spending a great deal of time on computer technology to figure out ways to match technology, teleservicing, telemarketing, and our agent force all together.
Historically, companies didn't do that.
What kind of acquisitions will MetLife be making in the years ahead?
BENMOSCHE: We would like to continually look at those businesses we are predominantly in already. Some people ask me, "Would you buy a brokerage?" The answer is no. We want to provide our 11,000 salespeople with more products and services. I don't need to buy a full-service broker to do that.
Why has the insurance industry been relatively slow in pushing overseas? MetLife appears to get no more than 5% of its revenue from outside the United States.
BENMOSCHE: To create institutional insurance capability in foreign countries, it's complicated because you need actuaries in the country who understand the mortality of those countries.
It's not as simple as going out and providing currency exchanges in London for General Motors.
Which foreign markets present the greatest opportunity for MetLife?
BENMOSCHE: We think all of Latin America. We are looking to Spain and Portugal for some growth. We see Korea clearly as a growth market, as well as China and other parts of Asia.
Eastern Europe is not on the radar screen because we don't understand enough about it yet. That could be a potential down the road but not in 1998 or 1999. On the international front, what we want to do is be in developing or emerging countries where they have a growing middle class.
Do you have a goal for what overseas business will do for the bottom line?
BENMOSCHE: Maybe a 10% contribution over the next few years. But I think that in the next 10 years after that it will become a more significant part.
Have Asia's economic problems caused you to slow down in that region?
BENMOSCHE: No. If anything, we might accelerate.
It's a lot like the United States was for MetLife in the late 1980s and early 1990s. Back then there was a flight to quality companies, as insurance companies were failing domestically.
Now what you're finding is that in foreign countries, many companies in those countries want to partner with us. Japan may get to the point where we might find a good strategic partner there.
Turning to distribution channels, would you like to boost the business you do through banks and financial planners? It looks like about 5% of your business now comes through those kinds of sources.
BENMOSCHE: You have to be careful because it's not just a matter of sales; it's the retention of business that counts.
The analysis we have done shows that the business that is sold through the agency sales force has the greatest persistency-it stays here longer.
When it goes to a bank channel, it's less persistent. When it goes through a nonbank stock broker channel, it's the least persistent. So you wind up spending more to get people to sell your product and then you tend to have the assets for a shorter period of time, leading to a low-margin business.