NU Online News Service, Dec. 17, 2003, 6:02 p.m. EST – Executives at MetLife Inc., New York, say they have been trying to streamline the MetLife career agency and New England Financial distribution organizations, and to improve sales of life insurance through independent distributors.[@@]

The executives discussed distribution Tuesday at MetLife’s annual investor day conference, according to a collection of presentation materials filed with the U.S. Securities and Exchange Commission.

MetLife executives told investors that the company is using MetLife Financial Services career agents to sell individual products to reach “low market” and “middle market” customers; New England Financial agents to reach middle market customers, affluent customers and small business owners; and independent distributors to reach affluent customers, business owners and wealthy customers.

The MetLife Financial Services unit will end 2003 with 5,350 career agents at 129 agencies, down from more than 6,000 agents in 2001, according to a presentation prepared by Edward Reynolds, a senior vice president at the unit.

The agents earn straight commission compensation, and 91% of their sales come from sales of MetLife’s own proprietary products, Reynolds reported, according to the investor day conference materials filed with the SEC.

The MetLife Financial Services agents still get about half of their revenue from sales of life insurance, just as they did in 1999, but Reynolds’ presentation shows the agents are getting a bigger share of their revenue from sales of annuities and a smaller share from sales of mutual funds.

Reynolds reviewed MetLife’s efforts to increase the career agents’ productivity to more than $36,000 per year in annual commissions in 2004, from less than $33,000 per year in 2002.

The company has been “trimming low producers” and closing less profitable agencies. The company also plans to “limit who can recruit and who can train,” “grow our agent population more selectively” and “reduce management infrastructure,” Reynolds reported.

But MetLife still expects the number of financial services unit agents to increase to about 5,600 by the end of 2004, Reynolds reported.

Eileen McDonnell, president of New England Financial, prepared a presentation on her unit showing that its agent count will increase to about 3,000 by the end of 2003, from 2,361 in 1996.

New England Financial agent retention has increased to 21%, from 18%, and agent productivity has increased to $37,400, from $31,900.

The unit has “eliminated redundant management structure,” “reduced home office costs by 50%” and “right-sized” the number of distribution points to about 70, from 84, McDonnell reported.

Michael Farrell, a senior vice president at the independent distribution unit, reported the unit has increased annuity sales power by increasing the number of annuity wholesalers to 75, from 41 at the end of 2001; the number of selling agreements to 449, from 157; and the number of appointed sales reps to 66,092, from 23,291.

But, on the life side, MetLife is seeing a “steep decline in sales across all products,” in part because of a decline in the number of agents producing at a $25,000 annual rate, Farrell reported.

MetLife is trying to improve life sales through independent distributors by adding life wholesalers, using the company’s securities unit to sell more proprietary life products, introducing new term and variable universal life products designed for independent distributors, and setting up an internal wholesaling sales desk, Farrell reported.

The conference presentation packet is on the Web at http://www.sec.gov/Archives/edgar/data/1099219/000095012303013826/0000950123-03-013826-index.htm