New Allianz Life boss won’t tinker with controversial distribution model

Allianz Life’s new CEO is sticking with the insurer’s controversial indexed-annuity distribution model, dashing the hopes of some independent agents.
The new CEO Walter White, once Allianz Life Insurance Co. of North America’s chief administrative officer, hails from an independent broker-dealer background. He was once president of Woodbury Financial Services Inc., The Hartford Financial Services Group Inc.’s indie broker-dealer, prior to joining Allianz in 2009 and had led Woodbury’s formation in 2001.
Given that background, some insurance sellers had hoped that Mr. White might reconsider a hotly debated distribution move by Allianz that prevents many agents from selling some of the carrier’s more desirable offerings.
However, independent background aside, Mr. White will ensure the strategy remains in place.
“Walter White has been an integral part of this strategy since its inception,” said spokeswoman Sara Thurin Rollin. “His promotion to Allianz Life president and CEO doesn’t change our distribution strategy with respect to Preferred.”
Allianz Preferred was launched in July, as a program that rewards top-selling field marketing organizations with access to exclusive products and better support, provided they submit to greater oversight by Allianz.
The Preferred program is off-limits to agents who are part of “distribution groups” — field marketing organizations that align with other carriers to create indexed annuities.
Russ Smith, founder of Torimax Financial Group Inc., said he would have to form an additional relationship with another marketing organization to participate in Preferred, as his current marketing organization doesn’t take part in the program. “It’s incredibly short sighted to disenfranchise some entities that have been loyal to Allianz for so long,” Mr. Smith said, after finding out the program would not be altered.
Indeed, marketing organizations and agents that have been shut out of the Preferred program claim that the arrangement gives the insurer too much control over indie agents. Others contend that marketing organizations and agents who are selling Allianz and unable to join the Preferred program are feeling alienated.
It’s also not clear how the program is faring with agents who do qualify to sell the exclusive products, including Allianz 360, an indexed annuity.
Joe Santore, president of Postema Marketing Group LLC, had hoped that by joining with a Preferred FMO, he would be able to compete against other firms with exclusive products.
So far, that hasn’t panned out. “I don’t have a lot of agents selling it,” Mr. Santore said. “They’re going elsewhere.”
According to AnnuitySpecs.com, indexed-annuity sales for Allianz Life, the top seller, declined to $1.56 billion in the third quarter. That’s an 18.39% drop from the year-earlier period. “Allianz asks a lot from the [marketing organizations],” said Mr. Santore, “and the agents aren’t really all about it.”
Still others say it will take time for agents to warm up to Allianz’s exclusive product. Scott Wheeler, founder of American Financial Marketing, declined to provide details on how the Allianz 360 has been selling at his FMO, but noted that “finding a place for it takes time.” American Financial is owned by Allianz, but offers annuities from 21 different insurers.
“Marketers have to explain the bells, whistles and features, and reps have to understand it and slot it into what they’re already doing,” Mr. Wheeler said. “Nothing happens overnight.”