Aviva Cuts Next Tier of FMOs

[Charpress]

I didn't see this coming.

Aviva just cut another group of FMO/IMOs from their contracting. This was done in a letter sent Friday that basically said "your through" and by the way, anyone appointed through you will not be allowed to move elsewhere until 2010.

Among those cut were some pretty big heavy-hitters. One FMO I used for Aviva products went in the first round. Now the other FMO I use is also cut. I cannot write, I cannot move.

When Aviva wants my business again in 2010, or whenever, I will most definitely remember how they screwed me. I should have stuck with Allianz (and the others) that always treated me right. What was I thinking?

 

[jaugusta]

So is there any ref on the net I can look at this at? Thanks.

 

[insuranceexec]

The problem here is that the FMO's are getting greedy and want more for themselves. They just announced; which is what I assume you are referencing, that American Investors/ Aviva will be cutting the sub-IMO's override to 1% above street. The product that most agents were writing with Aviva had a street of 8% and an override of 2.5% making the total comp 10.5%. How much were you getting?

By cutting the sub-IMO comp; it allows the FMO to make more money on the back-end. I have several sub-IMO's beneath me and they are furious; and have every right to be.

Aviva is making all of their IMO's sign a waiver that they will not pay above 1% street to their sub-IMO's; talking about cutting your own throat.

 

[Charpress]

So is there any ref on the net I can look at this at? Thanks.

There are plenty of references to Aviva's possible financial problems. Downgrading by Moody's, falling stock (except today), and so on. Aviva had a $10.9 loss for 2008 after adjusting the market value of its reserves. Reserve valuation is bad for all insurance companies, but Aviva expanded so quickly in the last couple of years that the are now having some serious problems.

But I am referring to a very abrupt and unexpected letter that some FMOs got terminating them. Then there is another letter that FMOs who are being kept got telling them that Aviva will not allow any producer who is contracted anywhere with ANY Aviva product to move to them. This is not a public sort of thing.

 

[jaugusta]

Thanks, that will help with my search on this. I sell Aviva and even though I get a nie commission off of it, if they are having problems I would rather not move clients there, which is why I am trying to find some info here.

 

[Todd King]

Thanks, that will help with my search on this. I sell Aviva and even though I get a nie commission off of it, if they are having problems I would rather not move clients there, which is why I am trying to find some info here.

Would you like to move your contract to me? Oh, dang, that's right, they probably won't let you!

 

[Freddie]

I didn't see this coming.

Aviva just cut another group of FMO/IMOs from their contracting. This was done in a letter sent Friday that basically said "your through" and by the way, anyone appointed through you will not be allowed to move elsewhere until 2010.

Among those cut were some pretty big heavy-hitters. One FMO I used for Aviva products went in the first round. Now the other FMO I use is also cut. I cannot write, I cannot move.

When Aviva wants my business again in 2010, or whenever, I will most definitely remember how they screwed me. I should have stuck with Allianz (and the others) that always treated me right. What was I thinking?

What? So if you are an FMO with Aviva - and they chop that FMO and the agent is "through" but you cannot move to another FMO until 2010?

Sounds like border line illegal, some violation or restraint of trade or something.

 

[cloisbarton]

I didn't see this coming.

Aviva just cut another group of FMO/IMOs from their contracting. This was done in a letter sent Friday that basically said "your through" and by the way, anyone appointed through you will not be allowed to move elsewhere until 2010.

Among those cut were some pretty big heavy-hitters. One FMO I used for Aviva products went in the first round. Now the other FMO I use is also cut. I cannot write, I cannot move.

When Aviva wants my business again in 2010, or whenever, I will most definitely remember how they screwed me. I should have stuck with Allianz (and the others) that always treated me right. What was I thinking?

I am very frustrated with Aviva. They have a good product, but this whole cutting contracts fiasco has cost me about $3.5 million in premium last month. I have moved a-lot of my guys to the Amerus side of the table. All in all not a lot of smiling faces

 

[Charpress]

There is no moving to "sides" from what I have been told.

If you are contracted anywhere with any Aviva product, you cannot sell through your current FMO and you cannot move until 2010 (and I wouldn't count on that happening). I had three Aviva contracts at two FMOs.

So, I was contracted with Amerus at one FMO and American Investors at another. I now cannot sell these products and I cannot move. Further, although I have never sold any BPA (another Aviva separate contracting line), I cannot sell that either with a new FMO regardless of the fact I have never handled BPA before and regardless of the fact that I was planning to push this product big time.

So, screwed all the way around. In any event, I have serious doubts about the long-term prospects for Aviva at this point. I don't think it is a case of just retrenching for a bit and then back to blow and go. I think it is just going to be blow.

The market is up today, but I don't expect it to last. So, if that is the case, here is a late 2009 press release from Aviva:

"Due to the problems with the U.S. market, Aviva announced today that has decided to go back to its roots in Europe and devote its energies and resources to a proven market, etc."

 

[policy doctor]

2010 will be here in about 9 months....not exactly a long wait. several companies have stopped taking new contracts for agents or new apps for annuities. NACOLAH is one. So yes, there are fiscal problems somewhere.