New Allianz Life boss won't tinker with controversial distribution model
December 20, 2011 by Darla Mercado
Indexed annuity program rewarding big Allianz sellers with exclusive products here to stay
By Darla Mercado
December 19, 2011
Allianz Life’s new CEO is sticking with the insurer’s controversial
indexed-annuity distribution model, dashing the hopes of some independent
agents.
The new CEO Walter White, once Allianz Life Insurance Co. of North America’s
chief administrative officer, hails from an independent broker-dealer
background. He was once president of Woodbury Financial Services Inc., The
Hartford Financial Services Group Inc.’s indie broker-dealer, prior to joining
Allianz in 2009 and had led Woodbury’s formation in 2001.
Given that background, some insurance sellers had hoped that Mr. White might
reconsider a hotly debated distribution move by Allianz that prevents many
agents from selling some of the carrier’s more desirable offerings.
However, independent background aside, Mr. White will ensure the strategy
remains in place.
“Walter White has been an integral part of this strategy since its
inception,” said spokeswoman Sara Thurin Rollin. “His promotion to Allianz Life
president and CEO doesn’t change our distribution strategy with respect to
Preferred.”
Allianz Preferred was launched in July, as a program that rewards top-selling
field marketing organizations with access to exclusive products and better
support, provided they submit to greater oversight by Allianz.
The Preferred program is off-limits to agents who are part of “distribution
groups” — field marketing organizations that align with other carriers to create
indexed annuities.
Russ Smith, founder of Torimax Financial Group Inc., said he would have to
form an additional relationship with another marketing organization to
participate in Preferred, as his current marketing organization doesn’t take
part in the program. “It’s incredibly short sighted to disenfranchise some
entities that have been loyal to Allianz for so long,” Mr. Smith said, after
finding out the program would not be altered.
Indeed, marketing organizations and agents that have been shut out of the
Preferred program claim that the arrangement gives the insurer too much control
over indie agents. Others contend that marketing organizations and agents who
are selling Allianz and unable to join the Preferred program are feeling
alienated.
It’s also not clear how the program is faring with agents who do qualify to
sell the exclusive products, including Allianz 360, an indexed annuity.
Joe Santore, president of Postema Marketing Group LLC, had hoped that by
joining with a Preferred FMO, he would be able to compete against other firms
with exclusive products.
So far, that hasn’t panned out. “I don’t have a lot of agents selling it,”
Mr. Santore said. “They’re going elsewhere.”
According to AnnuitySpecs.com, indexed-annuity sales for Allianz Life, the
top seller, declined to $1.56 billion in the third quarter. That’s an 18.39%
drop from the year-earlier period. “Allianz asks a lot from the [marketing
organizations],” said Mr. Santore, “and the agents aren’t really all about it.”
Still others say it will take time for agents to warm up to Allianz’s
exclusive product. Scott Wheeler, founder of American Financial Marketing,
declined to provide details on how the Allianz 360 has been selling at his FMO,
but noted that “finding a place for it takes time.” American Financial is owned
by Allianz, but offers annuities from 21 different insurers.
“Marketers have to explain the bells, whistles and features, and reps have to
understand it and slot it into what they’re already doing,” Mr. Wheeler said.
“Nothing happens overnight.”
