My second blog post was planned as a happy retelling of our reward trip this week to Key Largo for our top Sales Partners here at dibroker east (Clarke Morris, Tim Murray, and Michael Tyler qualified)–that will have to wait.
Kieran Mullins Senior Vice President at MetLife sent out an email today announcing the suspension of individual disability insurance sales at MetLife: (W)e have decided to suspend Individual Disability Insurance (IDI) sales, effective September 1, 2016. This date will be the final date to submit business, with the final date to place business on October 31, 2016. This suspension affects the fully underwritten IDI line under U.S. Retail. The Group, Voluntary & Worksite Benefits business will continue to manufacture and sell Group Disability Insurance/Guaranteed Standard Issue business as they do today.
We are disappointed by this news and saddened for our friends at MetLife who will be out of a job. MetLife has an excellent individual product, excellent underwriters and a strong team of support, starting with our rep Chris Ginocchio.
From conversations we have had with folks at Metlife, they are not planning to sell the block of business and say the block is performing well–this could bode well as a sign that they plan to return to the market in the future. But at this point, they don’t seem to be making a firm commitment to that.
MetLife’s product has been an important of our portfolio. We do business with nine disability insurance carriers, but they have consistently been in our top three, and have been a strong partner whom we had come to rely upon. We only hope that the suspension is short and that they return to the market with a renewed effort and focus.
The number of carriers in the IDI market has been pretty steady in the last decade and carriers report a good return on investment–and they all seem to have weathered the financial downturn in 2008 without too much stress. But the market is a fraction its size in its heyday (say the ’80’s). It is not good for the market as a whole to lose a strong player such as Metlife.
I remember a number of years ago when Steve Brady of the Standard Insurance Company was visiting our office. Metlife had only just started to be a real player in the independent brokerage market. I recall Steve making a comment along the lines of…”If MetLife ever got really serious about the individual disability insurance market, they could dominate it.” The had gotten more serious, and from what we are told, it is a very profitable line of business for them. Now they are saying that they don’t have the resources to develop in the internal systems they need to support individual disability insurance sales. Pennywise, pound foolish?