American International Group Inc (NYSE:AIG) intends to add 600 advisers in an annuities push as part of its re-branding initiatives.
American International Group Inc (NYSE:AIG) will increase the number of career agents at its newly named AIG Financial Network.
AIG’s annuities push
American International Group Inc (NYSE:AIG)’s leading provider of insurance, retirement and financial services will increase the career agents’ strength to 2,000 by 2019 from about 1,400. AIG is rebranding its American General career agent force and adding annuities and other retirement products to the life insurance that the advisers have traditionally sold.
John Deremo, chief distribution officer for AIG Financial Distributors, indicated the insurer is aiming to move a bit upscale into a more mass-affluent space, incorporating retirement planning into the protection focus.
Interestingly, he pointed out, while a lot of companies are pulling back or pulling out of markets, American International Group Inc (NYSE:AIG) is expanding.
AIG’s CEO Robert Benmosche is focusing on annuities as more Americans approach retirement and competitors including Metlife Inc (NYSE:MET) limit sales.
Groundbreaking opportunity
In its statement, AIG indicated the formation of AIG Financial Network represents a groundbreaking opportunity to bring the extraordinary power of American International Group Inc (NYSE:AIG) into the business and lives of Americans.
AIG indicated in addition to traditional protection products, AIG Financial Network advisors will now be able to offer solutions to meet all stages of a consumer’s life, including a vast array of retirement and income solutions. Moreover, American International Group Inc (NYSE:AIG)’s innovative advanced technology, including a Customer Relationship Management app and hands-on training will facilitate processing, allowing policies to be issued to clients rapidly.
String of strong results
AIG has delivered a string of better-than-expected earnings reports in recent quarters. In its recent earnings report for the three months through September, the insurer showed earnings per share of 96 cents for the quarter on revenue totaling $8.43 billion. AIG came through with better earnings in each of the four quarterly reports prior to the September quarter results. Moreover, as part of its share repurchase program, American International Group Inc (NYSE:AIG) intends to return $25 billion to $30 billion by 2015.
Zachary Tracer of Bloomberg points out some insurers sold variable annuities with a guarantee that the values would rise over time. However, those promises burned insurers when stocks crashed in the financial crisis. This has forced companies including Hartford and Sun Life Financial Inc. to retreat from the business. Prudential Financial Inc., the second-largest U.S. life insurer, too has reduced some variable-annuity guarantees to expand margins, weighing on sales.
However, Jay Wintrob, CEO of AIG’s life and retirement business said in November that American International Group Inc (NYSE:AIG) has the capacity to grow because it sold fewer products than some rivals in prior years, when guarantees were more generous.
