MetLife Inc, America’s largest life insurer by assets, is in talks to sell its network of around 4,000 sales people to Massachusetts Mutual Life, MetLife revealed on Thursday.
In a statement, New York-based MetLife said it was “in discussions” with MassMutual “regarding a possible transaction related to the MetLife Premier Client Group, its US advisor force”, adding that there was no assurance at this point that an agreement will ultimately be reached.
Founded in 1851, MassMutual is based in Springfield, Massachusetts and remains a mutually-owned company, meaning that it is owned by its members and participating policy-owners under a mutual structure.
US insurance experts and observers said MetLife’s interest in disposing of its sales force, which is said to number around 4,000 people, was consistent with efforts MetLife management has been making in recent months to slim down, as the company’s US business has struggled, and as it has become the subject of heightened regulatory scrutiny in an ever more tightly-regulated retail environment.
In particular, MetLife chief executive Steve Kandarian is seen to be responding to a ruling by US officials that MetLife was a “systemically important” financial institution, which normally brings with it tighter capital requirements.
The news of MetLife’s efforts to sell its sales network comes a month after another major American insurer, American International Group (AIG), said it was selling its sales network, AIG Advisor Group, to private equity buyers.
‘Death of the Insurance Salesman’
In a Wall Street Journal article on Thursday entitled “Death of the Insurance Salesman at MetLife”, Colin Devine, principal of insurance consulting firm C. Devine & Associates, said the sale of the of MetLife’s sales force would be “the end of an era for MetLife”.
“Decades ago MetLife had some 14,000 agents,” the article went on.
“For many years, they walked door-to-door to make sales and collect premiums. They became a fixture of American culture often portrayed in movies and television shows such as Father Knows Best.”
MetLife had its origins in New York City in 1863, as a company originally called the National Union Life and Limb Insurance Company, which insured Civil War sailors and soldiers against wartime-related disabilities.
It has remained a New York fixture – with its 59-storey, 1963 tower above Grand Central Station (pictured, in the distance) one of the city’s most familiar buildings – ever since. It added significant scale in 2010, with the purchase of the American Life Insurance Company from AIG for US$16.4bn. Today it has more than 90 million customers in more than 60 countries, according to its website.