MetLife Taiwan restructuring, lays off 515 staff

MetLife Taiwan Insurance Co (大都會國際人壽) yesterday announced that it was axing its entire sales agency team in line with its strategic shift to focus on bancassurance and telemarketing sales channels.

The change in strategy would affect a total of 515 sales agents and support staff throughout the country -- nearly half of its work force -- the company, which has a less than 1 percent share of the local life insurance market, said in a press release.

Employees who are being laid off will be offered a better compensation package than what is required under the law, it said.

The insurer, however, refused to disclose details of the severance package, citing confidentiality.

MetLife Taiwan claimed that the rights and interests of its existing policyholders would not be affected.

"We deeply regret that this decision requires the loss of jobs, but it was necessary to position us for long-term business success," said Curt Breckon, president and CEO of MetLife Taiwan.

"We believe that this market has great potential. This change will make MetLife Taiwan stronger by concentrating on distribution channels where MetLife is a leader ... We will do our best to assist them [affected employees] in finding new employment," he added.

MetLife Taiwan has seen its telemarketing and bancassurance sales channels enjoy fast growth over the past few years, said Jack Mong (孟子文), senior vice president of MetLife Taiwan, during a telephone interview.

Breckon said that the company ranked second in telemarketing and eighth in selling investment-linked insurance policies via banking channels, strengthening the firm's resolve to concentrate on those two business models.

Mong declined to estimate how much personnel expenses the firm would save following the restructuring.

MetLife Taiwan, the 19th largest life insurer in the nation, last year recorded a premium income of NT$9.29 billion (US$283.7 million), accounting for 0.6 percent of the domestic life insurance market.

MetLife Taiwan is the latest example of a string of insurers that have turned to bancassurance in search of business growth.

Bancassurance refers to the distribution of insurance products through a bank's distribution channels, a service designed to fulfill consumers' banking and insurance needs at the same time.

In October, the UK's biggest insurer, Aviva Plc, announced a 50-50 joint venture with First Financial Holding Co (第一金控), hoping to tap into the nation's emerging banking and insurance market.

Shin Kong Life Insurance Co (新光人壽), the nation's third-largest life insurer, announced in April that it would launch tailor-made products to boost bancassurance revenues.

Last October, New York Life International, the US' largest mutual insurance company, said it would invest US$20 million in the Bank of Overseas Chinese (華僑銀行) in exchange for a 5 percent shareholding in the local lender to sell insurance policies via its branches.

In early 2004, Prudential Plc announced it would buy a 5 percent stake in E.Sun Financial Holdings (玉山金控) to develop bancassurance and asset management.