New York Life Combines B-D With Retirement Income Business

New York Life Insurance Co. has reorganized the company into two businesses: an insurance group and an investment group that includes its broker-dealer subsidiary.

Executive Vice President John Y. Kim, the company's chief investment officer, will take on responsibility for the retirement-income security business, which is being combined with New York Life Investments, a broker-dealer unit of New York Life Insurance Co. The combined businesses will operate as the investments group. New York Life's retirement-income business includes fixed immediate annuities, fixed deferred annuities and stock market-linked variable annuities.

New York Life Investments, which Kim has led since 2008, is a service mark used by New York Life Investment Management Holdings LLC. and its subsidiary, New York Life Investment Management LLC. On a consolidated basis, in 2011, sales of the new investments group were more than $50 billion and assets under management were about $300 billion. Kim will oversee retail mutual funds and annuities, and institutional asset management and retirement-plan services.

Executive Vice President Chris Blunt, who has headed New York Life's retirement-income security business since its formation in 2008, will now run the newly created insurance business. In addition to U.S. life insurance, he will be responsible for the company's long-term care insurance business, and the marketing, finance, technology, and services supporting these lines. New York Life's operations in Mexico also are being incorporated into this group.

William Werfelman, a spokesman for New York Life, said the new alignment is "an evolution of the strategy announced in 2008, which has resulted in our market share in life insurance rising to double digits for the first time in the company's history."

The 2008 announcement "also led to continued strong growth in sales of retirement income and investment products and solutions," he said. This new structure "will enhance our ability to build on these gains by creating strong operating businesses with clearer P&L responsibility" and "maintaining our primary focus on agency led distribution."

Executive Vice President Mark Pfaff, who has run the agency department since 2006 and had additional responsibility for life insurance since 2008, will continue to oversee New York Life's 12,000 career agents. New York Life, the largest mutual life insurer in the United States, considers its career agency sales force as its "most important market differentiator."

"This strategic alignment maintains our industry-leading life insurance business as our flagship core business, enhances the prospects of New York Life becoming a true leader in retirement solutions beyond income annuities, where we lead today, and keeps career agency as our defining core distribution system going forward, as it has been throughout our history," said Ted Mathas, chairman and chief executive officer of New York Life, in a statement.

The insurance group also includes the supplemental sales channels for the U.S. life business: the direct response business in Tampa, Fla., which is the direct marketer of life insurance in the United States through an endorsed program with the AARP geared to its membership; and the group membership association business, which New York Life says is the largest underwriter of association insurance programs in the United States.

New York Life Insurance Co. currently has a Best's Financial Strength Rating of A++ (Superior).

(By Fran Matso Lysiak, senior associate editor, BestWeek: [email protected])