MetLife Serving the Not-for-Profit Market

Transcription

1 UFS MetLife Serving the Not-for-Profit Market Presented to AIFA March 7, 2006 Michael K. Farrell Executive VP, MetLife

2 Today s Agenda Market Overview Market Demographics: Focus on Education MetLife s Competitive Position Market Trends Success Factors

3 Market Overview

4 Not-For-Profit Market Total participants million Total assets - $746.5 billion Est. Total contributions - $36-46 billion 64% to variable annuities Source: LIMRA International Survey, 3 rd Q 2005

5 Not-For-Profit Market - Segments Healthcare Higher Education Charitable Organization K-12

6 Healthcare Market Over 3,300 health care institutions Active providers: MetLife, Fidelity, Diversified, ING, and Lincoln Retail type service with institutional margins Heavily consultant and broker driven Consolidating market, reflecting margin pressures

7 Higher Education Market 3,500 public and private higher education institutions Active providers: TIAA-CREF is the dominant provider (80% of the market) Primarily enhanced variable annuity products Trend to move towards fixed account and mutual funds products

8 Charitable Organizations Market Over 10,000 non-profit or charitable organizations Active providers: Mutual of America, MetLife, TIAA-CREF, VALIC, and Aetna Larger charitable organizations are moving towards fixed account and mutual funds products Smaller organizations still utilizing variable annuities

9 K-12 Market 85,000 public, private and parochial institutions Active providers: MET, VALIC, ING, and LNC Each school district has solicitation guidelines Historically a retail annuity market, trending to an institutional market Highly competitive environment, with as many as 20 or more providers in any given school district Trend with larger school districts to reduce the number of providers to 10 or less

10 Market Demographics: Focus on Education

11 Education Market A Growing Opportunity In the United States, approximately 2.4 million teachers will be needed in the next 11 years due to teacher turnover, retirement, and rising student enrollment* Opportunity to enroll 2.4 million new teachers and counsel similar number of retiring teachers on asset consolidation and distribution * Source: Quality Education Data

12 The Average Teacher Median teacher age - 46 Total income (incl. spouse if married) - $77,739 Median annual salary - $43,262 Mean # of years teaching full-time Of all teachers teaching in 2001, 23% began full time teaching within the past 5 years Source: NEA-sponsored survey published every five years; last published August 2003

13 MetLife s Competitive Position MetLife Resources (MLR)

14 MLR Historical Perspective MetLife acquired Travelers Life & Annuity and CitiStreet Associates MetLife Resources assumed oversight responsibility for all MetLife TSA products MetLife acquired GenAmerica Financial United Resources acquired (renamed MetLife Resources) MetLife merges with New England MetLife acquired Security First Group (renamed MetLife Investors)

15 MetLife s Competitive Position $30 billion in retirement assets 1.3 Million customers 21,000 payroll slots Over 775 financial services representatives #5 in the Not-For-Profit market* #2 in K-12 market* * Source: LIMRA Pro-Forma Assets Under Management as of December 31, 2004.

16 Individual Business Annuity Assets Under Management MLR $8.9B MLR $22.7B 12.8% 19.3% 87.2% 80.7% All Other $60.9B All Other $94.8B 12/31/04 = $69.8B 12/31/05 = $117.5B* *Includes Travelers Assets

17 Individual Business Annuity Sales MLR $1.01B 9.0% MLR $2.1B 16.4% 91.0% 83.6% FY 2004 = $11.3B All Other $10.24B All Other $10.69B FY 2005 Pro-forma = $12.8B* *Includes full year of 2005 CitiStreet Associates Sales

18 Current Trends

19 Current Trends in 403(b) Regulatory Changes Proposed 403(b) Regulations, primary impact on education sector 202(a)(11) -1 Regulations, will require adjustments Increasing Participation and Savings Rates Employers looking for solutions

20 Potential Impact of 403(b) Regulations Accelerating Move to Reduce Vendors Program Administrators will become commonplace Tighter Solicitation Guidelines Per Group Compliance Concerns Growing As number of vendors shrink, fiduciary concerns grow Continue towards low-cost mutual fund options MLR to Become Market-Maker Expand the focus of accumulation to include distribution Offer solutions to longevity concerns

21 Success Factors

22 Success Factors Professional face-to-face field force Innovative products Focus on client needs

23 Professional Face-to-Face Field Force Over 775 Financial Services Reps, 70% with IAR designation Growing financial planning capability Expertise in plan design and investment advice Case acquisition and development capabilities

24 Innovative Products ProManage Morningstar GMIB Retirement income/insurance E share class in annuity

25 Focus on Client Needs Broad planning capacity Lifestyle preservation Long term care insurance Protection products Disability

26 Thank You

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