MetLife Inc. says it plans to continue adding wholesalers to increase distribution through banks.
Its New York-based distribution arm, MetLife Investors Distribution Co., hired two wholesalers and promoted two others in the past two weeks to give it 21 supporting the bank channel nationally. Paul Sylvester, the national sales manager of annuities and long-term-care products for MetLife Investors, said in an interview that the company expects to add three to six more wholesalers in the next six to eight months as it focuses on selling more variable annuities through banks.
“The sales of variable annuities through banks has grown considerably in the last three to four years, and we expect that trend to continue,” Mr. Sylvester said. “To many banks, we are still viewed as a fixed annuity provider. In order to change that perception, we need wholesalers who are specifically selling variable products.”
MetLife Inc. announced Monday that its earnings had grown 33% in the third quarter, to $999 million, or $1.29 per share, from a year earlier. The average expectation of analysts surveyed by Thomson First Call was for $1.17 per share. MetLife’s assets under management increased 3.2%, to $516.2 billion.
The quarterly results showed MetLife’s annuity earnings up 11% from a year ago. Robert Henrikson, MetLife’s chairman, president, and chief executive officer, said during an earnings conference call Tuesday that the company had a slower quarter in annuity sales but that its new lifetime withdrawal rider had been well received. Conditions appear favorable looking ahead, he said.
During the quarter, annuity deposits declined 2.6%, to $3.5 billion, from a year earlier. “Despite lower [annuity] sales in the third quarter,” Mr. Henrikson said during the earnings call, “we are well-positioned in the marketplace and have excellent expectations for the future.”
Mr. Sylvester said the bank channel is crucial for MetLife’s effort to develop variable annuity sales. About 10% to 12% of MetLife Investors’ business comes from the bank channel, he said, and he expects to increase this share to 15% to 17% by next year through a focus on variable annuity sales.
“We had folks that are very good at selling fixed products, but that isn’t the skill that is necessary anymore,” he said. “Now every territory we cover has people that are skilled in selling variable annuities. It was critical to get that experience in there in order to grow.”
Analysts said it is important for insurers like MetLife to have specialist wholesalers for variable annuities, as well as specialists for the fixed product.
Ken Kehrer, an analyst at Kehrer-Limra in Princeton, N.J., said other companies, too, have split their wholesaling force into groups that focus on either fixed or variable sales.
Michael A. White, the president of Michael White & Associates in Radnor, Pa., said MetLife passed TIAA-CREF and Axa Financial to become the top U.S. issuer of variable annuities in June data from Vards, a unit of Morningstar Inc. that tracks the annuity business, but lagged other providers in the bank channel.
“Though they have raised their profile and become the top variable annuity provider, they aren’t No. 1 with banks,” Mr. White said. “They are improved. They are improving, but more wholesalers can strengthen that further.”
Mr. Kehrer said MetLife began gaining traction in the bank channel during the second quarter, increasing its variable annuity sales through banks by 21.4%, to $176 million, from the previous quarter. Third-quarter sales data are not yet available, he said.
“It is hard to get on the shelf at banks because there is limited shelf space and most banks focus on six or seven providers,” Mr. Kehrer said. “It is difficult to gain assets quickly when you are trying to elbow established firms like Hartford, Axa, or Pacific Life out of the way.”
MetLife Investors announced on Oct. 25 that it had hired two wholesalers and promoted two others to increase sales in the bank channel. David Willis joined from Wachovia Insurance to develop MetLife’s presence in Georgia and the Carolinas, and Matthew Casey, previously with RBC Insurance, joined to cover northern Illinois, Michigan, and Wisconsin.
Daniel Gibney was promoted to wholesaler for the Minnesota-North Dakota-South Dakota region, and Nancy Chevalier Gathers was promoted to regional vice president of the annuity bank channel for Long Island and Westchester County, N.Y.
Mr. Sylvester said MetLife Investors plans to announce in the next two weeks that it has added “an experienced account manager who works for a major bank.”
“We will add more from there,” he added. “We are very bullish about the channel.”
This means hiring nationally, he said, but with a focus on the East Coast. He said he expects 60% of any further hirings to be in the East and 40% in the West.
“There are more advisers in the East Coast than in the West,” he said. “Our external wholesaling force needs to reflect where the banks are.”
