American International Group is looking at ways to introduce proprietary insurance products to its new distribution platform, according to AIG President and CEO Robert Benmosche.
That platform is the Woodbury Financial broker-dealer, which AIG has acquired from Hartford Financial Services. Benmosche told of the plans to offer proprietary products to this channel during a wide-ranging CEO panel on Monday during LIMRA’s annual conference.
The AIG CEO allowed that he has never had much success with putting proprietary products through the independent agency distribution channel. Independents “take great pride in being independent,” he quipped.
If they don’t like a product, they prove their independence by “telling you to go to hell,” he added, triggering a wave of soft laughter in the audience.
“When they want to tell you to go to hell, they do,” he continued. “That what the producers like to do.”
With Woodbury, though, Benmosche thinks a propriety product effort might go more positively. Those advisors are “a group of people who were very successful in selling the Hartford products,” Benmosche explained. They have a process and people in place to do that. So AIG is looking for ways to leverage its own product on that platform.
He indicated he already been floating the idea with Woodbury advisors. At a recent meeting with 3,000 of them in Washington, for instance, he said he pointed to AIG’s track record in variable and fixed annuity sales.
“I told them, just take a look at us. Just don’t be afraid because it may reflect on your independence.”
Other distribution developments
The comments were among several distribution-related points that he and co-panelist James T. Morris, chairman and CEO of Pacific Life Insurance, made during the hour-long panel discussion.
Morris recalled that, 10 or 15 years ago, the industry was pretty concerned about the graying of the producer groups. The question often raised back then was, “where are the new producers going to come from,” he said.
But as it turned out, the graying trend has not hurt the industry as much as had been feared, Morris indicated. How so?
For one thing, many producers — “the good ones” — never really retire, said Morris. They love what they do so they continue in the business past the traditional retirement ages.
In addition, the larger producer groups have developed their own succession plans. This may not produce big numbers of new recruits, but it does bring quality, he said.
And career companies have played a role in the trend as well. According to Morris, these companies have been having success with recruiting ‘second career people, who are 30-somehings instead of 22s and 23s.” This has also not brought in big numbers of new producers, but there is more quality, he said.
In looking at his own company’s distribution developments, Morris mentioned that the focus now is on dialing the clock back to the successes Pacific Life had in the late 1990s with distributing retirement oriented products through independent broker-dealer (B-D) firms.
The difference today is that the company is talking not only working with independent B-Ds but also with regional firms and property-casualty firms. And now the conversation is about “retirement oriented products with some protection too.”
“So, it’s back to the future?” asked the panel moderator, Robert Kerzner, who is president and chief executive officer of LIMRA, LOMA and LL Global
“Yes, but in a different way,” said Morris. “We are (working to) bring some needs-based growth to our distribution firms.”