Magazine article American Banker

Exec Departs; MassMutual in Bank Retreat?

Magazine article American Banker

Exec Departs; MassMutual in Bank Retreat?

Article excerpt

After two years of initiatives to boost annuity sales in the bank channel but minimal results, MassMutual Financial Group seems to be shifting gears.

Two years after hiring John P. Sousa 4th to push the company into the bank channel, MassMutual Financial Group and its executive vice president of financial institutions have parted ways.

Analysts disagreed on whether this meant MassMutual was pulling out of the bank channel or just regrouping before another charge.

"We fully expect to grow and develop our institutional distribution channels," said MassMutual spokesman Riccardo Davis. Mr. Davis confirmed that Mr. Sousa no longer works for the company.

One analyst said MassMutual is readying a push with life insurance products after realizing that the annuity market is saturated. He added that Mr. Sousa's departure could stem from the fact "he didn't sign up enough" banks for annuity distribution agreements.

Other analysts said MassMutual might have set itself an all but impossible task. The company not only had a tough time capturing annuity market share but also was competing for space in a channel dominated by a handful of players.

"They spent the money, they had a branding campaign, and they sponsored a lot of industry conferences," one person familiar with the situation said. "There's not a lot of room out there for new players."

Branding campaigns apparently were not enough to create some room. Kenneth Kehrer Associates' study of annuity sales through banks reported that MassMutual sold $49 million worth in the first quarter, placing it 28th among 32 companies surveyed. In 2001, it sold $96 million worth, placing it 31st out of 34. And almost all MassMutual's annuity sales were of the variable product, whose sales have languished generally while stock markets fell.

MassMutual is not the only big-name company to fail in an attempt to break into the bank channel after coming late to the party. …

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