NU Online News Service, Sept. 25, 8:15 p.m. – The new president of New York Life Insurance Company, New York, says a diverse product mix, a diverse client base and the decision to stick with policyholder ownership are helping the company weather the current economic slump.
Life insurance sales for the first eight months of the year were up 31% from sales for the first eight months of 2001, according to Fred Sievert.
Sievert, who was the company’s vice chairman, says he expects to get more involved in corporate affairs but keep many of the day-to-day management responsibilities. He declined to comment on whether his promotion makes him an heir presumptive to Sy Sternberg, New York Life’s 59-year-old chairman and chief executive officer.
But Sievert has no problem answering questions about whether he’s glad under current conditions that New York Life is still a mutual life insurer, rather than a newly minted, shareholder-owned public company.
“Absolutely,” Sievert says. “We feel right now that it is a competitive advantage. We can manage with an eye to the long-term.”
Many life insurers have argued in recent years that they needed to demutualize to obtain capital from Wall Street, but New York Life has plenty of capital to finance its operations and growth, Sievert says.
Maintaining a mutual charter also gives New York Life the ability to sell participating whole life insurance policies, or policies that offer policyholders a chance to participate in the company’s profits, at a time when many major, newly demutualized competitors are unable to do so, Sievert says.
A few years ago, Wall Street analysts might have skewered a life insurer that stood by dowdy old fixed annuities. But now the fact that New York Life kept its fixed annuities on the shelf is helping the company attract consumers looking for stability, Sievert says.
New York Life is also continuing to emphasize efforts to go after “cultural markets,” such as Asian Indians, Chinese Americans and African-Americans, and Sievert reports the company is now pursuing the bank-owned and corporate-owned life insurance markets.
Some life insurers have complained in recent quarters about wild swings in COLI and BOLI sales, but New York Life believes its new campaign to enter the COLI/BOLI market represents an expansion opportunity for its agents, Sievert says.