Sage Life Assurance of America has tripled its wholesaling staff in an effort to persuade more brokers at banks, financial planners, and regional firms to sell its variable annuities and variable life products.
Lincoln Yersin, executive vice president of the Stamford, Conn., subsidiary of the South African financial services company Sage Group Ltd., said it started marketing its variable products through brokers last year and has bulked up the regional wholesaling unit from three to 10 people since January.
The insurer, which now has about 1,000 brokers selling its products, intends to have 5,000 nationwide by yearend, he said. "In 2000 the goal was to organize and build our infrastructure. Now we're ready to make our push."
Sage began selling variable annuities through banks last April and sold $20 million through 10 banks last year. Now the company has about 20 bank distribution agreements, Mr. Yersin said.
The insurer began selling variable life products through banks in September and had made nearly $1 million of sales through that channel by Dec. 31.
Stephen Duff, senior vice president of new business development at Sage, said in an interview last month that its goal is to sell $250 million of variable annuities and variable life insurance through banks this year.
"We have nearly 50 distribution agreements in place through banks, planners, and regional firms," Mr. Yersin said. "There's a lot of activity going on. But it's still early in the process, and we have a long way to go."
Kenneth Kehrer, president of Kenneth Kehrer Associates, a Princeton, N.J., consulting firm, said Sage is making its push as many banks are trying to trim their roster of annuity and life insurance providers. But that is not to say Sage cannot succeed, he added.
"You don't see many new companies cropping up, and there is some compression, so it's going to be hard" for Sage to build its broker base, he said. "But there's always opportunities. Existing relationships between banks and insurance companies will falter, creating opportunities. But a new company will have to take advantage of" its chances.
Mr. Yersin said that is exactly what Sage plans to do.
"The products are pretty much commoditized, so we're not going to break in just by offering a good product," he said. "The question is, how can we help banks reach their goal? They have the products already. We have to be in the business of business building."
Sage is prepared to ask every bank: "What do you want us to do to help you grow the business?" Mr. Yersin said
The insurer would support banks' marketing programs with direct mail and advertising, he said.
"All of this depends on the bank's culture," Mr. Yersin said. "There isn't a set program we give distributors. It all depends on the individual bank, as long as the end result is us helping drive customers into the bank."
Michael White, president of Michael White Associates, a Radnor, Pa., consulting firm, said Sage, along with other new entrants into bank sales, should select their bank partners wisely. "Only about 20% of all banks sell annuities, so there is plenty of potential," he said.
Many annuity providers have targeted larger banks, in an effort to maximize sales volume, Mr. White said. "Most of the banks that aren't selling annuities yet are smaller, community-type banks," he said. "So if a provider can find a way to deliver support to smaller financial institutions," it can succeed.
Mr. Yersin said Sage is looking for relationships with a wide range of banking companies, from community to multistate entities.