State Farm Mines Their High Net Worth

“By teaming up with somebody like Phoenix,” he continues, “they are able to provide those products and services that better serve their high net worth clients.

“State Farm is very present in the general marketplace,” he says. “But products for the high net worth was not their business, it was our business.

“We are providing the products, we are also providing a very experienced group of both life and annuity wholesalers to work with State Farm agents,” says Zultowski.

A closer look at the product portfolios of both companies reveal that similar products are being offered by both carriers.

“There are some products that were bringing to the table that State Farm does not have, for example survivorship variable universal life,” says Zultowski.

Zultowski notes, “There are some other products that basically have the same product chassis, but our product and the State Farm product may have some little differences in product features.”

“We recognized that there would be this overlap situation and the decision was made on this end that clearly our agents will do whats best for the client. If that’s use the Phoenix product, then use the Phoenix product,” says Huff.

“The decision as to whether its the State Farm product or the Phoenix product that is sold is really based upon what’s the right product for the customer,” says Zultowski.

“In most of these situations,” he continues, “because of the fact that this has really been our business and our products are geared to the high net worth market, it’s generally our product [Phoenix] that’s sold in that situation.

“There can be situations where a State Farm product might be sold, but again it’s the decision as to whats best for the customer,” says Zultowski.

One issue State Farm agents facing this dilemma won’t have to consider is compensation. “We’ve taken compensation out of the equation in terms of the agent making the decision,” says Zultowski. “With some minor differences, the compensation on the two products is the same.”

Another important part of the alliance involves a certification process State Farm agents must go through prior to using the services provided by Phoenix.

“Obviously a big part of that is learning about our products,” says Zultowski.

“But in addition to that a big part of it is case studies, so that State Farm producers can begin to see where these different kinds of situations are,” he continues.

Zultowski describes the certification as “more than just learning product, it’s learning the specific situations where the products might apply.

“And it ends up with a prospect identification process where we work with them to identify people that they already have in their client base that might be candidates for these kinds of services,” he says.

State Farm has rolled the program out to about 500 agents in 3 states, including 25 of their top life insurance producers. “Not only are we early in the process, but these types of cases can take weeks, if not months to develop and propose,” says Zultowski.

“It’s still early but we’re encouraged by the business that’s being developed,” he says.

Reproduced from National Underwriter Life & Health/Financial Services Edition, November 19, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.

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