From MDRT To Executive Suite: MONYs New Chief Distribution Officer

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When a young man joins the life insurance business and successfully qualifies for the Million Dollar Round Table his first two years, some people would wonder why he would ever consider leaving personal production to get into agency management.

But, in fact, it was this initial step into management that led Steven Orluck to the position he holds today: Executive Vice President and Chief Distribution Officer of MONY Life Insurance Company, New York.

“When I entered the business, I entered with the desire up front to get into management,” says Orluck.

After qualifying for MDRT his first two years with Met Life, Orluck was given the opportunity to take over a scratch agency operation. This in turn led to running the sales office in which he started his career.

“I had my first full blown office to run–this was a tremendous learning experience,” Orluck says. But he admits that at the time, he didnt have much experience, and probably wasnt in management long enough to assume such a role.

“After stumbling and falling a few times, we did all right–things progressed,” he says.

It was at that time Orluck got the tap from Met Lifes vice president of sales with a new challenge for him. “They asked me to take over a problematic office in the Bronx. Now, the only time I had ever been to the Bronx was for a Yankees game–that was the extent of my familiarity.”

But, by this time having served in managerial roles in a couple of different sales offices, Orluck had the confidence to successfully lead this troubled agency.

“I was able to identify problems and I was pretty certain of the solutions,” he says. “I put together a new management team to support me and the office turned around dramatically in a relatively short period of time.”

Eventually, moving from one level to the next, Orluck become the regional manager of all the sales offices in the New York metropolitan area, with 300-350 people reporting to him.

But it was when Met Life acquired Century 21 that Orluck met Sam Foti, now president and chief operating officer of The MONY Group, who was then running the insurance operations for Century 21.

“We built a scratch distribution company totally dedicated to working with Century 21,” says Orluck.

Building a new distribution channel, expanding that into a regional operation, and eventually taking Fotis place as president of Century 21, gave Orluck the experience to move into a senior management role at Met Lifes home office. There, he had responsibility for the marketing function of the retail distribution channel, and also was in charge of Met Lifes brokerage operation.

In 1998 Orluck made the move to join The MONY Group. “My mandate was to begin the process of diversifying our distribution channels, and building and acquiring others,” he says.

At that time, MONY was a life insurance company with a single method of distribution–the career channel. Orlucks mission to build and diversify distribution did have one caveat: “Whatever it was that we chose to acquire or build had to complement the career channel,” he says.

Orluck says that by taking this approach to expanding distribution, channel conflict would be virtually eliminated.

One example Orluck uses to illustrate is that of the first acquisition MONY made in 1998, Trusted Advisors, a broker-dealer based in Minnesota whose primary mission was to help CPAs transition into a full financial services practice.

“The game plan over time was to help them [CPAs] realize that theres a lot more earnings opportunity for them if they provide comprehensive solutions,” he says.

Orluck notes that the expectation was not for the CPA to become an expert in life insurance, on top of tax planning and accounting. “We told them, You dont have to go off and learn this, we can create an opportunity for you to work as a team to provide those solutions–so let our people who focus most of their time on business continuation plans and estate planning issues become the key advisor for you and your clients.”

Many industry experts agree that the biggest hurdle to working with CPAs is building trust between the agent and the CPA. Orluck doesnt deny the fact that it may take up to 6 or 7 meetings with a CPA before he is comfortable bringing in a life insurance agent as an advisor. This is why, he says, the best arrangements are those where an existing relationship is already in place.

“This may not be a formal financial relationship, but they know each other socially, and they refer business back and forth,” he says.

Orluck explains that by bringing a CPA to Trusted Advisors, a MONY agent can form a formal partnership with that CPA. “We have found that it is crucial to the relationship that they engage in a formal business planning process and they build a business plan together,” he says.

Complementing the career channel with the Trusted Advisor acquisition has effectively eliminated any channel conflict that may have come up, says Orluck. “Its hard to believe that we have virtually no channel conflict,” he adds.

A more recent task for Orluck is the management of MONYs career channel. Knowing that the career channel is one of the most expensive methods of distribution, Orluck is set on making it a more efficient means of distributing products and services.

“Last year we had about 85 main and detached offices,” he says. “We have now reduced that number to 42.”

Orluck says while there were a number of factors that went into the decision to close certain offices, it was mostly geographically driven.

“There were three things going on,” he says. “One, they had to have sufficient scale for us to make the determination that we want to invest in them to help them continue to grow and increase market share within their geography. Two, they were based generally in major geographic markets. And three, we wanted to have a tiered organization.”

The tiered organization is a concept where each office has different levels of agents, says Orluck, from the newly licensed novice to the Top Of The Table producer. “We wanted to have an office with 4 tiers, so people could graduate from one tier to the next,” he says.

Orluck estimates the reduction in producers to be about 400.

According to MONYs 2001 annual report, the career channel produced $10.5 million less in new premiums in 2001 than in 2000. But Orluck contends that with the reduction in head count, all remaining offices are producing double-digit growth–resulting in increased production per agent. “I just became enormously more efficient than I was a year ago,” he says.

Looking ahead, Orluck will manage both the retail and the wholesale sides of MONYs distribution, and operate it as if it were a separate distribution company.

“I can run a distribution company off of the margins that MONYs proprietary products provide me, and Ive got external providers who are going to give me capital, appropriately pay my producers, and allow me enough margin to run a distribution company,” he says.

By taking that approach, he says, producers have no reason to seek brokerage arrangements anywhere else. And by offering choices for his producers with respect to product, Orluck has put pressure on MONYs proprietary product manufacturers.

“Theyve now evolved to where they dont take the career agent for granted. Now they have a new clarity, focus, and accountability in terms of delivering products to not only our proprietary distributors, but to the independent marketplace as well,” he says.

Separating the distribution and the manufacturing function has reduced product development time by two thirds, Orluck says, while putting a greater emphasis on the competitiveness of MONYs products.

Steven Orluck


Reproduced from National Underwriter Life & Health/Financial Services Edition, June 24, 2002. Copyright 2002 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.