With deals slowing to a trickle because of a depressed stock market, insurance executives attending a mergers and acquisitions conference tackled the challenges of running stand-alone businesses.

The word "distribution" was tripping off the tongues of industry leaders at the meeting last week in New York sponsored by A.M. Best Co. and Tillinghast-Towers Perrin.

Though insurers have long relied on captive and independent insurance agents, there is a growing belief that they must develop additional sales channels such as through banks, securities firms, call centers, and the Internet.

"I think that distribution is the key issue facing insurance companies today," said Steven Gluckstern, partner of Capital Ze Partners, an investment company that takes positions in insurers. "The insurance industry is waking up to the fact that it has allowed its intermediaries to have control over its customers."

Several executives, including Stephen C. Hilbertof Conseco Inc. and Michael A. Carpenter of Travelers Life and Annuities, part of the newly formed Citigroup, seconded the motion.

Mr. Hilbert, the founder and chief executive officer who built Conseco into one of the largest U.S. insurance companies through the acquisition of more than 40 life insurers, has put off dealmaking to focus on internal growth.

In recent years, he said, mergers among insurers have driven up prices, making companies prohibitively expensive. Insurance deals in the past year have averaged three to four times book value, compared with less than two times book a decade ago, said Larry Mayewski, a senior vice president at A.M. Best.

Though Mr. Hilbert is satisfied with Conseco's distribution network, built mostly around 160,000 insurance and captive agents, he is interested in expanding sales through telemarketing and the Internet.

"The key for the future is having a customer base and developing the distribution to widen that customer base," he said.

Like Mr. Hilbert, Travelers' Mr. Carpenter-speaking as Travelers Life and Annuities CEO and before his elevation last weekend to head of Citigroup's Salomon Smith Barney unit-questioned the wisdom of mergers when market prices remain relatively high.

"Internal growth is cheaper, at least for now," he said.

Mr. Carpenter said that, thanks to the merger of Travelers Group and Citicorp, Travelers Life is able to sell through 10 distribution channels.

"In the future, life insurance will be a product line, not a business," he said.

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