Aviva Cuts Next Tier of FMOs

[patch36]

I'm telling you...I met with the Aviva rep YESTERDAY. They are rolling out new annuities as we speak. They are NOT suspspending sales.

We believe you

What I don't believe is that one of their Reps would have a clue. I know many of them and they are not necessarily in the loop, and those that are will not put anything in writing or tell everything they know. I have been down the road with them...they treat some agents well and stick knives in the back of others. They have all kinds of side deals and special deals for some, and screw the rest. IMO.

 

[nka245]

They'll probably be back along with NA... the agents are selling TOO many annuities. So all of you stop selling so I can make some $, okay? J/K...
Anyway, they aren't the only fish in the sea. Never place all of your business with one carrier. Have a backup plan and a backup to the backup. Diversify and don't be complacent. This isn't the first co. to pull products and won't be the last. We are in some strange times right now that are going to lead to more upheavals in our industry. Prepare yourself by having a healthy arsenal of carriers that you can familiarize yourself with and place business with should your favorite *POOF* disappear.

 

[insuranceexec]

You are very correct there NKA. Must I say diversify!

 

[Charpress]

I can confirm also that Aviva is not suspending sales.

My own predicament is that I kind of pre-sold some Aviva products and did not submit the business before FMO #1 and then FMO #2 that I used for Aviva got cut in turn.

I will now probably write through a business partner doing a commission split.

I have to say that when Aviva decides to get back fully in the fray, they will find a lot of former cheerleaders like me not interested in doing business with them.

I can understand the financial problem of sales outstripping reserves in a very bad market, but they didn't have to do this so abruptly and to the extreme prejudice of the the FMOs that made them successful.

And that all I have to say about that. --Forest Gump

 

[PaulC]

This thing with Aviva is worse than some of you may know.

I was part of this cut. It is one thing for lack of production but in this case they are cutting some of their biggest producers. Like the NBC Group that I was down line from. What they are telling people about why they are doing this is simply not true. They cut these contracts to kill trailing commissions and other lines of compensations to save money. They are moving in their Company owned IMO's like Agency Marketing Services – an agency owned 100% by AVIVA (prior American Investors)

Aviva is not doing well financially. They are in a panic overseas with their falling stock price and losses. There is talk of re-capitalization but that is kind of hard when your stock is in the toilet.

AVIVA overseas has said to the U.S. we are NOT Sending you any more money. This push last year to be #1 which was VERY expensive, caused a serious capitalization problem on both sides of the pond.


I tried to post some links to the articles talking about the problems AVIVA is having overseas but the forum here won't let me post links until I have made 10 posts.


AVIVA also did not allow us to have service contracts so you could stay in the loop with your client's accounts. If this was simply a reason to cut back on production there are many other ways to do that but you don't cut your agents off from their clients like that. They originally said they would allow service contracts but went back on that statement.

As of the first of the month I can't get online to see my client’s info, they no longer cc me on correspondence so as a result I can't keep track of renewals, strategy change notices and so forth. As a result I have advised my clients, that it makes sense for, to move. Most of these clients I have had for 15 years or more.

Aviva has given my client's policy info to another agency under "Agency Marketing Services". This agency is in California when my clients live in Washington. Probably because there is nobody left in Washington that are under AVIVA's direct contracting.

I have had this agency contact several of my clients in the last two weeks soliciting business from them. Since their IMO is 100% owned by Aviva, even if they sell them another product AVIVA makes money off of it. While the owner of the agency that AVIVA gave my client info to is appointed here in Washington, the actual Agent making the solicitation is NOT. He is made a number of false statements and has offered products that are NOT available here. When I asked him who he was and why he was calling my clients he claimed to work for AVIVA and they were now his clients under AVIVA. My clients are confused because he makes it sound like he is an employee from the home office when he calls, which he is not, so they are a bit ticked off about this and are more nervous than ever.

 

[Charpress]

Oh, I agree completely that Aviva is probably facing more problems and that is why it was not anywhere close to a stretch to believe that Aviva would indeed stop all new business.

The current rumor is not true, however, not yet.

 

[NPCOACH]

As a former large American Investors producer

It is hard to be surprised by the problems with Aviva. I have had officers of their company fly me and some associates to their home office, wine and dine us and lie to us.

I have seen them screw over a client very badly - trying to refuse to pay a death claim.

They have a long history of playing fast and loose with clients and agents. They of course have had numerous lawsuits over deceptive sales practices.

Agents need to do serious homework before putting good clients with some of these companies. It seems that if a company comes out with a seemingly decent product with a high commission - agents beat a path to their door.

"The large print giveth and the small print taketh away"

 

[Charpress]

In my experience with Aviva, it was a case of a very good product, with guaranteed growth, guaranteed income, a nice LTC side benefit, and a decent death benefit for the full growth -that nobody else at the time really provided. I put people with Aviva because it was a good product, even though they paid less of a commission than I was used to.

Most of the producers who started selling Aviva have the same experience. We had to take less in commissions, but the products almost sold themselves.

Of course, the tremendous amount of sales coupled with the failing economy is the main reason they are in trouble.

Not to say at this point I am sticking up for Aviva. I will never sell anything of theirs again.

 

[PaulC]

Well, it really isn't AVIVA anymore. All the old AVIVA people I dealt with were cut out when the AMERUS/American Investors operation took over.

AVIVA used to be a good place to do business with. I had been with them for 15 years, when it was Commercial Union and so on.

I don't recognize the company anymore after the move to Topeka. I never really cared much for American Investors but when AVIVA bought them out I thought that would have changed but instead it was The Amerus Group and American Investors with their cut throat mentality that took over AVIVA.

 

[Mr. Bill]

Hey PaulC, thanks for your info. While you might not be able to include a link, you should be able to type in the web address(es) and we can cut/paste. I just got this. Interesting they use the word "sacrifices" in the communication:

Aviva USA and our key distribution partners and producers continue to deliver prosperity and
peace of mind to our life insurance and annuity customers as we navigate through these difficult
economic times. We remain focused on providing policies that provide the safety, security and
guarantees customers desire in this time of turmoil. As we work to keep the company strong, we
will be there to deliver on our promises -- just as Aviva has done for more than 300 years.
As you know, our goals for 2009 are to accelerate the growth of our life business and moderate the
growth of our annuity business. We also want to utilize our capital in the most prudent manner and
to build up our capital position so that we are in a position to take advantage of the opportunities
that will exist for strongly capitalized insurers and their producers when this economic crisis ends.
Please know that we are committed to our annuity business over the long term; however, we have
made changes to moderate our growth rate. So far we have not seen much reduction because of
the strong consumer demand for our products. During the past week we have ended our annuity
relationships with some additional distributors and producers and have established production
caps for other distributors. These were extremely tough decisions, and we sincerely wish those
producers and groups the best. Today, we are making some additional changes for business
received on and after March 21, 2009, including:
A commission reduction for all annuity products (for most products 0.5%).
An additional commission reduction for all annuity products for issue ages above 75.
A reduction in maximum issue ages for most annuity products.
o For 12- and 10-year SC products, the maximum issue will be between ages 75-
78, depending on the product; and for 8-year SC products, it will be age 80; for
7-year SC products it will be age 81; for 6- year SC products it will be age 82;
and for 5-year SC products it will be age 83.
An increase in the annual fee for lifetime income benefit riders for all annuity products
and all riders. The increase will vary by rider, but for our most popular rider the fee will
increase from 0.50% to 0.75% annually.
A temporary moratorium from licensing/appointing any new annuity producers.
We greatly appreciate the increased activity that is happening in our life business. In fact, many
annuity producers are already looking at selling more life insurance business during this period. To
assist them, we have introduced a competitive new fixed universal life product to complement our
indexed universal life, single premium life and term products so that our producers have the
products necessary to rapidly grow life production. We have made additional improvements to our
life insurance business to support your growth, including:
Increased retention limits to $10 million.
A reorganized underwriting team.
An improved no lapse guarantee (NLG) rider.
The introduction of illustrations demonstrating the positive impact of our Wellness for
Life rider.
Expanded Advanced Marketing Team and Life Sales Support Team.
Aviva remains strong and committed to our customers and to our producers. While there are
sacrifices to be made, we continue to deliver prosperity and peace of mind to our customers, which
is our most important obligation. We know we are doing this as a team with you and now more
than ever, we appreciate your business and your willingness to weather this storm with us. That's
why we call it, "One Aviva, twice the value."
Sincerely,
Mark V. Heitz
President, Sales & Distribution