Insurers are determined that economizing to offset the economic slowdown will not touch the units that wholesale annuities and life insurance to banks.
In fact, they are hiring for these operations.
That is not surprising. A study released in June 2000 by Kenneth Kehrer Associates in Princeton, N.J., found that wholesalers were the most important part of a bank-insurer relationship. When banks were asked what they wanted most from the insurers that provide them with annuities, the No. 1 answer, overwhelmingly, was one-on-one wholesaling. No. 2 was group wholesaling.
Were expanding, no question, said Peter Cummins, the senior vice president for investment product sales and marketing at Hartford Life, a unit of Hartford Financial Services Group Inc. This is a growth market.
Most people in this business look at more than what has happened in the last 18 months, Mr. Cummins said. Demographics show that the sweet spot is baby boomers saving for retirement.
Hartford Life, of Simsbury, Conn., has 190 wholesalers and expects that to grow to 200 next year. Of the 190, 45 are dedicated to the bank channel, more than last year, and the company plans to increase that number too.
Bradley Powell, the president of institutional marketing group at Jackson National Life Insurance Co., expanded his wholesaling team over the summer. The Lansing, Mich., company now has 21 external and nine internal wholesalers. Of those, eight five external and three internal were hired in the past three months.
As we add banks, were adding wholesalers, Mr. Powell said. We just added Fleet, and were always looking for more distribution agreements.
Transamerica Financial Institutions Inc. in Minneapolis has added six bank annuity wholesalers this year, for a total of 24. Jay Hewitt, the companys national sales manager, said he would like to hire more.
The cost of wholesaling is going up, but were talking to our home office about spending more on it, he said. Its worth paying the price. Wholesalers set the tone for bank reps, and bank reps turn to wholesalers for support and help in understanding the product.
Bill Waldie, the managing director of product development and industry relations for Transamerica Financial, said it would be hard to expand annuity sales through banks with too few wholesalers. Transamerica markets Aegon NVs fixed and variable annuities to banks.
Every bank needs a different level of support, Mr. Waldie said, but if you cant meet a banks needs youre going to have a tough time.
Mr. Hewitt said, If you dont have quality wholesalers, and if you dont have enough of them, your product is going to sit on the shelf.
Nationwide Financial Services Inc. of Columbus, Ohio, had 46 bank-dedicated wholesalers and would put on more if it adds bank partners, as it is trying to do, said Matt Riebel, the president of Nationwide Financial Institution Distributors Agency Inc.
Now is when our bank partners need the help, Mr. Riebel said. They need it much more now than they did in the past.
Tim Waterworth at John Hancock Financial Services Inc. said it is still hiring bank and wire house wholesalers dedicated to selling long-term-care and life insurance as well as fixed and variable annuities. The Boston company has 35 wholesalers for those products and expects to expand to 38.
Were not going to grow too aggressively, because at times like these you have to be cautious, said Mr. Waterworth, the vice president of Hancocks financial institutions group. But we have to keep at it keep what we have and grow if the market allows.
Axa Group in Paris is unlikely to cut any of its bank-dedicated wholesalers. A Sept. 13 release said that Axa, the parent company of New York-based Axa Financial Inc., plans to reduce administrative expenses by 10% next year, but that the cutbacks will respect Axas strategic priorities. In earlier interviews company officials had included bank marketing of annuities as one of those priorities. Axa spokesman Jeffrey Tolvin would not discuss the subject.
Axa Group distributes annuities to banks via its Equitable Distributors Inc. subsidiary.
