In End of an Era, MetLife Looks To Part With Insurance Agents

ByGary Kaltbaum

Insurer is in talks to sell business of roughly 4,000 sales people to Massachusetts Mutual

By LESLIE SCISM
Updated Feb. 25, 2016 8:22 a.m. ET
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MetLife Inc. is preparing to part ways with a central force in the company’s history: its life-insurance agents.

The nation’s largest life insurer by assets is in talks to sell a business of roughly 4,000 sales people to Massachusetts Mutual Life Insurance Co., according to people familiar with the situation. The talks are at advanced stages, these people said, but could still fall apart.

Both companies confirmed they are in talks following The Wall Street Journal’s report.

The discussions are part of a larger effort by MetLife to slim down and respond to a shifting regulatory environment in the wake of the 2008 financial crisis. In January the New York company announced that it is seeking to divest a large piece of its U.S. life-insurance unit, which has been at the company’s core for decades.

MetLife is one of the best-known sellers of financial protection to U.S. households.

A sale of MetLife’s sales force would sever ties with an important contributor to the company’s rise as a nationwide giant. Decades ago MetLife had some 14,000 agents. 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.”

But life-insurance agents began dropping in number across the industry as mutual funds gave families savings alternatives, and sales-practice scandals led to widespread class-action litigation and settlements.

Those troubles and tougher regulation forced insurers to spend more heavily on training, compliance and other monitoring. Publicly traded life insurers like MetLife concerned about costs increasingly have relied on financial advisers, stockbrokers, banks and direct marketing for sales. Without its agents, MetLife would focus on those channels for life insurance sales. ​

The potential buyer, Massachusetts Mutual, markets itself as MassMutual and is one of a small number of prominent life insurers owned by their policyholders. These companies have remained committed to sales through large career sales forces. MassMutual currently has about 5,600 agents.

The Springfield, Mass., insurer ranks in the top 10 of U.S. life insurers by assets, according to ratings firm A.M. Best Co.

MetLife’s current group of agents, known as the MetLife Premier Client Group, targets the middle to upper-income consumer market, including the executives of small- to medium-size companies and small-business owners. The group includes three formerly separate distribution channels: MetLife, New England Financial and MetLife Resources.

LINK: http://www.wsj.com/articles/in-end-of-an-era-metlife-looks-to-part-with-insurance-agents-1456399695