(Photo credit: Jnn13.)

Massachusetts Mutual Life Insurance Company (MassMutual; Springfield, Mass.) and MetLife, Inc. (New York) have entered into a definitive agreement for the acquisition by MassMutual of MetLife’s U.S. Retail advisor force, the MetLife Premier Client Group (MPCG), a retail distribution operation with more than 40 local sales and advisory operations and approximately 4,000 advisors across the country. The transaction is expected to close by mid-2016, subject to regulatory approval and other closing conditions.

This acquisition significantly increases MassMutual’s existing Career Agency System of more than 5,600 financial professionals, a MassMutual statement notes. It also broadens the carrier’s geographic reach and provides more clients access to a holistic set of financial solutions, including life insurance, annuities, disability income insurance and wealth management services.  As part of the transaction, MassMutual and MetLife have also agreed to enter into a product development agreement under which MetLife’s U.S. Retail business will be the exclusive developer of certain annuity products to be issued by MassMutual.

MassMutual characterizes the deal as positioning the company to be the top individual life insurance and whole life carrier in the U.S. This transaction follows MetLife’s previously announced plan to pursue the separation of a substantial portion of its U.S. Retail segment.

Transformative Creation of a Distribution Powerhouse

“This is a milestone event in the 165-year history of MassMutual, and will result in the transformative creation of a distribution powerhouse,” comments Roger Crandall, Chairman, President and CEO, MassMutual.  “Most importantly, this unprecedented transaction will position us for stronger future growth by better enabling our company and agents to do what we do best—help people secure their future and protect the ones they love.”

“This combination is a natural strategic and cultural fit for our two companies,” says Steven A. Kandarian, MetLife Chairman, President and CEO. “As part of our Accelerating Value strategic initiative, we are evaluating the economic and regulatory environment and directing capital to businesses where we can achieve a clear competitive advantage. This transaction will enable our U.S. Retail business to sharpen its focus on its core strength in product manufacturing while also providing a broader distribution network through the partnership with MassMutual. By decoupling manufacturing from distribution, our U.S. Retail business will be more agile, and both MetLife and the U.S. Retail business can achieve significant cost savings.”

In addition to MetLife’s retail advisor firms, the transaction will encompass certain MetLife employees who support the MetLife Premier Client Group; MetLife’s affiliated broker-dealer, MetLife Securities, Inc.; and certain assets associated with the MetLife Premier Client Group, including employee contracts. On a combined basis, MSI and MassMutual’s existing broker-dealer, MML Investors Services, LLC, will be among the nation’s largest insurance company-owned broker-dealers.  Additionally, as part of the agreement, approved MassMutual financial professionals will provide individual life insurance and annuity products through the MetLife PlanSmart Financial Education Series.

Once-in-a-Lifetime Opportunity

“This is a once-in-a-lifetime opportunity to combine two teams of experienced financial professionals and significantly expand our geographic reach,” comments Michael R. Fanning, Executive Vice President of MassMutual’s U.S. Insurance Group.  “Together, we will grow our business opportunities and serve more Americans who desire a comprehensive financial planning approach for their families and businesses.”

Eric Steigerwalt, Executive Vice President of MetLife’s U.S. Retail segment comments, “Over the years, MetLife has refocused its U.S. Retail distribution channel to become one of the most efficient, productive, and sought-after financial services organizations in the industry. With this transaction, our financial services representatives and support staff will continue to connect clients to the best risk and wealth management solutions, and MetLife’s products will now have even greater reach through the premier distribution network that this transaction creates.”

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