New York Life Insurance Co. on Friday realigned its business, dividing the company into two major groups to cover insurance and investments.
Chris Blunt, who had overseen New York Life's Retirement Income Security business since it was created in 2008, now will oversee the company's insurance business. Aside from covering life insurance, he will also oversee New York Life's long-term-care insurance business and the carrier's life insurance program with AARP.
Chief investment officer John Y. Kim will oversee the investment side of the business, which includes the asset manager New York Life Investment Management LLC, retail mutual funds and annuities, and retirement plan services. The Retirement Income Security business will no longer go by that name and will be incorporated into the investment unit.
The career agency force, made up of some 12,000 agents, will continue to be overseen by executive vice president Mark Pfaff.
Placing annuities and the RIS business under the investment side of New York Life made sense from an organizational standpoint, as income distribution products will be alongside accumulation products, chief executive Ted Mathas said in a statement.
“I would agree that accumulation and decumulation belong together; they're the components of retirement savings and it should be more holistic,” said Judith Alexander, director of marketing at Beacon Research Publications Inc.
Tom Rosendale, an A.M. Best Cos. Inc. analyst who covers New York Life, observed that by combining segments such as long-term-care insurance and individual life insurance, there was some expense savings to be had. A company that consolidates its units has fewer legal entities on which to do financial and tax reporting, he said.
The development didn't seem to be a major strategic move, but rather changed reporting relationships by combining certain product segments, Mr. Rosendale added.
Nevertheless, observers noted that as head of RIS, Mr. Blunt raised New York Life's profile among the broker-dealer and wirehouse distribution channels, particularly when it came to annuity sales. During his time there, he had been developing a fee-based immediate annuity.
Just as recently as last February, the RIS unit had added new leadership to oversee its wholesalers working with wirehouses and regional broker-dealers to sell annuities and mutual funds.
“Mr. Blunt was very successful at expanding distribution. He understood how to market through broker-dealers,” Ms. Alexander said. “I'm sure he'll apply the same innovative thinking to insurance products.”
Only a handful of personnel changes are expected to arise from the restructuring, said New York Life spokesman Bill Werfelman.
“Until we determine the staffing needs of the new structure, department heads have been asked to refrain from filling all but the most critical positions in the near term,” he said. “However, the number of affected positions is expected to be very small relative to our employee base of more than 9,000 positions in the United States today.”