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.
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Chuck
If you think your boss is stupid, remember: you wouldn't have a job if he was any smarter.”
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.
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Louise Jackson-Marquez
Jackson Financial
direct: 214-927-6546
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
[COLOR=black]This thing with Aviva is worse than some of you may know.[/COLOR]
[COLOR=black]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 [/COLOR][COLOR=#0d0d0d]Agency Marketing Services – an agency owned 100% by AVIVA (prior American Investors)[/COLOR]
[COLOR=black]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.[/COLOR]
[COLOR=black]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.[/COLOR]
[COLOR=black]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.[/COLOR]
[COLOR=black]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.[/COLOR]
[COLOR=black]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.[/COLOR]
[COLOR=black]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.[/COLOR]
[COLOR=black]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.[/COLOR]
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.
As a former large American Investors producerGo to Top
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"
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.
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.
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
I believe they are simply being prudent and proactive.
Perhaps some of the IMO/FMO groups that were cut were not as large as they had led their agents to believe? I know of many larger Marketing Orgs that are still selling AVIVA. I have contracts with 3 different FMO's that are still contracted with AVIVA. BTW, I quit selling their products about 2 years ago and don't miss them, but the folks I know in Topeka are for the most part really good and decent. AVIVA/Amerus were the problem, not American Investors, IMO.
OK, this should clear things up on why they are paring back annuity sales. When a company gets annuity money, they are required to use part of their reserves (actually more than a dollar for every dollar received). Companies in times like these want to make sure their reserves stay high so that they keep their top ratings. For that reason, if they cut back annuity sales, the reserves stay high. Makes sense to me.
OK, this should clear things up on why they are paring back annuity sales. When a company gets annuity money, they are required to use part of their reserves (actually more than a dollar for every dollar received). Companies in times like these want to make sure their reserves stay high so that they keep their top ratings. For that reason, if they cut back annuity sales, the reserves stay high. Makes sense to me.
It is like any business, really that works off of a budget.
You have a hot dog cart. You budget to sell 100 hot dogs a day for 3 months but by month 2, everyone and their brother wants to eat your hot dogs for lunch but you didn't budget for 500 hot dogs a day and don't have the hot dogs, buns, propane, condiments, nor man power to handle it so what do you do when you run out of hot dogs? You pack up the cart and go home...
When an insurance company screws you, and you think what they are doing is illegal, you drop the dime on them. Contact the Dept of Insurance and let them know what happened and have them sort it out. No one wants those guys up their ass with a microscope.
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I am proud to have voted for Ron Paul.
[COLOR=black]Tomfromtheshade: I already have been working with the Insurance Commissioner. The owner of the agency in California pulls up in “BOLD RED LETTERS” when you search him on the Washington OIC website a warning to "Contact the OIC on this person". He doesn't have a Company Affiliation on file or finger print card. His agent under him who has been doing the solicitations is not licensed here at all. [/COLOR]
[COLOR=black]I have also done some other research and it also turns out the Owner has settled "Out of Court" on several Senior Predatory type cases he had against him. Since he has not been convicted I guess his license has not been pulled.[/COLOR]
[COLOR=black]You got to love it. These are the quality of guys Aviva/American Investors finds to replace their discarded agents with. They are basically attempting to steal my clients. Don’t be surprised if you get the same thing happening to you. I know for a fact that a lot of agents are pissed and are taking their clients out. AVIVA changed all their conservation procedures last month and they have got very aggressive in their conservation department. AVIVA is pulling out the "Tony Sopranos" to stop it.[/COLOR]
[COLOR=black]BTW, this is another point people need to be aware of. There has been a large increase of 1035 exchanges OUT of AVIVA/American Investors and this is also impacting their cash capital reserves. It was really stupid to get rid of as many agents as they did. What do you think agents are going to do with their clients when you cut them off?[/COLOR]
[COLOR=black]I have seen this before with companies prior to going into receivership and it almost always has the same scenario. (Not saying receivership is what is going to happen.)[/COLOR]
[COLOR=black]"We are fine we are just being prudent". Meanwhile behind the scenes they are running around trying to cut things everywhere.[/COLOR]
[COLOR=black]Next they cut products out or stop selling. (While nobody else in the industry seems to be doing this on this kind of scale.)[/COLOR]
[COLOR=black]Then the conservation department kicks in and they start assigning new agents to clients to try to keep business on the books because they can’t afford to pay all of it out as they start to leave.[/COLOR]
[COLOR=black]Anyway it becomes a self fulfilling prophecy. Parent says no more money we are having money problems. The market is also fighting against them. They fire agents. They stop annuity production and stress Life Insurance (Since Life does not require the kinds of matching capital.) Then their rating starts to tank. Then the Sopranos come out.[/COLOR]
[COLOR=black]Anyway I am not a mind reader as someone also said earlier. When I smell smoke I assume there is a fire. I have got stuck in a company once before that went into receivership and it stinks. They lied to me all the way through it. Saying they were fine, and then started doing exactly what AVIVA/American Investors is doing. Their excuse for lies after the fact was they were a publicly traded company and any info they gave me prior to a formal announcement was a SEC violation. At the time they also probably believed their own press releases. However, now when I smell the stink I do what is best for my clients and move them someplace else.[/COLOR]
[COLOR=black]Again guys it is not the size of the lines that they are getting rid of as much as the cost of keeping those lines. If things were really not that bad as they say and if they wanted to eliminate production they could suspend products or put caps in place. This goes way beyond that. They are eliminating those lines that have trailing commissions, asset under management contracts and pension/C.A.R.E Plans.[/COLOR]
[COLOR=black]Since I can’t post my links yet, do a search of Guardian.CO.UK and look at all the recent crises AVIVA caused in the last 2 weeks in Europe. AVIVA’s stock tanked when they reported a [/COLOR][COLOR=black]£1.3bn [/COLOR][COLOR=black]loss last year and because of a report by Citigroup that AVIVA is undercapitalized and the most at risk in Europe. [/COLOR]
[COLOR=black]BTW, this loss conflicts with the "rosy" picture Mark Heitz paints in his state of AVIVA letters he has recently sent out. Has anyone noticed he keeps talking about the financial strength of AVIVA Britain but when he talks about the financial strength of AVIVA USA he doesn’t quote any numbers? Also the numbers he quoted about AVIVA Britain (In British Pounds and not US $, to make it look like it was less.) are totally opposite from what AVIVA officially posted last week. All he talks about as far as AVIVA USA is last year’s production as proof of how well they are doing. He spins the fact that making #1 was a goal and proof of their strength and that they did it a year ahead of plan. Then they act like it was the plan all along to be #1 was a one-time thing and to cap it once they reached that goal. BS![/COLOR]
[COLOR=black]The first cut of agents was about 9 thousand at the first of the year when AVIVA told them no more money for YOU because they didn’t have any to spare. This came after AVIVA had put a stop to investors withdrawing their money out of a Third Property fund. They had to put a stop to it because they didn’t want to sell the assets and take an unrealized loss and there wasn’t enough working capital to cover the costs without selling those assets. Then after the bad reports on AVIVA by Citigroup then AVIVA posting a [/COLOR][COLOR=black]£1.3bn [/COLOR][COLOR=black]loss last year causing the stock to tank, the next week they canned another 15 thousand agents. Yeah right that was just coincidence. If the numbers I have been told are correct they have canned a total of about 24,000 agents since the first of the year. At least those are the numbers if you add up NBC Group, Financial Markets Inc and all the others. They have stripped a lot of agents out of the loop and off their books. [/COLOR]
[COLOR=black]And yes, Annuity business is expensive and it requires a lot of working capital in order to sell it. That was their problem. When the economy tanks they try to blame the state o the economy instead of the fact they were ambitious and failed to properly handle that much business in case something happened. They not only have to keep the $ for $ reserve in place but they have to keep a cushion for regulatory requiremnts. In order to do this, every time an Annuity is sold they have to back it with some of their own cash and to cover the commissions and make sure they can cover the minimum interest rate guarantees. This is why they are generally long term investments for Insurance companies and they generally only make a couple of points off them in the long run. But it is stable money and doesn’t carry a lot of risk to the companies.[/COLOR]
[COLOR=black]When they stop selling it, it means they DON’T have the capital! What is even worse their mother’s tit has gone dry as well and if they need to come up with additional money to meet regulatory reserves, they can’t go crying to mama to get it.[/COLOR]
Here are some recent headlines. If you go on to the Guardian.co.uk site and search on AVIVA, they have been taking some some substantial hits for nearly a year.
Insurance shares dragged down by Aviva losses
Phllip Inman and Andrew Clark
Guardian.co.uk, Thursday 5 March 2009 22.28 GMT
Heavy losses at insurer Aviva today prompted a wave of selling across the insurance sector that dragged the FTSE 100 down more than 3%, driving shares close to a new six-year low.
Investors took fright after the owner of Norwich Union recorded a loss before tax of £1.3bn last year fuelling fears that the insurance industry was poised to become the next victim of the financial crisis....
Aviva struggles again as FTSE 100 tries to move ahead
Guardian.co.uk
Posted by Nick Fletcher
Friday 6 March 2009
Insurers are again under the cosh, even though leading shares are in general trying to push higher after yesterday's traumatic day.
Aviva - which spooked the sector with a £1.3bn loss before tax - is down another 7.2p at 182.7p. The company, currently spending millions reminding us its Norwich Union business is taking the Aviva name, sparked concerns about the capital position of the major insurers...
Aviva feels full force as storm batters insurers
Jill Treanor and Graeme Weardon
The Guardian, Saturday 7 March 2009
Insurance companies took another pummelling on the stockmarket yesterday amid deepening concern about the sector's health, sparked by losses at Aviva
Trading in the shares of Aviva, which owns Norwich Union, was briefly suspended as the insurer was hit by a second day of selling. On Thursday, Aviva lost a third of its value after admitting it had slumped to a loss and by insisting it would pay a dividend when the City felt it should be preserving capital.
No Aviva shares changed hands for five minutes, starting at 8.24am...
Insurer Aviva slides on balance sheet worries
Guardian.co.uk
Posted by Nick Fletcher
Friday 12 March 2009
Insurer Aviva continues to slide on growing concerns it may need a fundraising. The company recently held its 2008 dividend, which rather than reassuring investors, set them worrying about the company's capital position.
Citigroup analyst Andrew Crean has done much of the damage, downgrading his recommendation from hold to sell and slashing his price target from 450p to 160p. In the market Aviva is now down 28p at 185.5p - a 13% decline...
Crean Said:
"Re-capitalisation has decimated the bank sector and the spectre of a similar fate stalks the insurers currently. We would argue vehemently that insurers are not banks — lower asset leverage, solid liquidity fundamentals — and that the sector has shown its more defensive qualities during the current market upheaval. However there is a market level where insurers become vulnerable. Amongst its European peers, we see Aviva as one of the most at risk of slipping into re-cap.
"The group has reserved as best as it can for corporate bond and mortgage loan defaults but there still remain concerns — particularly within the hybrid component of the corporate bond portfolio and given the high LTVs [loans to value] in the loan books. Outside of this, the group has material exposures to equities and real estate (inclusive of the pension fund) and, particularly within its Dutch and US business, could have some significant guarantee issues if risk free rates come over 100bps lower.
"Given the level of asset leverage, the solvency looks thin — Aviva has the lowest coverage ratio in the European sector. We are not wholly convinced that there is significant flexibility to boost solvency should markets deteriorate further.
"In this context, we question the decision to maintain the 2008 dividend. Operating cash and free capital generation does little more than cover the dividend payment and there are potentially significant pressures going forward as lower market levels constrain the in-force cash generation and on the assumption of some further deterioration in non-life results (reduced investment earnings/ lower prior year releases).
"In our view, if the dividend policy is maintained, the balance sheet will not regenerate from future operating earnings. This leaves it in the hands of markets: already equities have fallen materially and real estate values are still dropping. If markets recover, Aviva's solvency should be able to cope. But further market falls would increase the pressure."
At least now I have a good excuse to give my 82 year-old client who agreed to put a big chunk of money with Aviva a couple of days before they pulled the rug out from under me.
"Sorry. Those c**k suckers at Aviva decided they don't want your business since 82 was OK last week but is not OK this week. Let's look for a more stable company to put your money with."
We just got notice that we are being cut as of last Friday!!! I have paid for over $9,000,000 with American Investors in the last 9-months. I have put $2,000,000 with Aviva.
We have $1,600,000 pending with AI and another $1,200,000 pending with Aviva. We are protected on the Aviva side but the FMO that had my AI contract was told we only have until 4/1/09 to get the business in. A week and half to get $1.6M in!!!!
I do know if it does NOT come in before the date they gave you that they have been rejecting the money from terminated agents clients in similar situations. One terminated agent I know of could not get the case issued even if a licensed agent, who was still appointed, signed the application.
I suggest you better find another carrier or else they will send the money back. Besides, I don't know why at this point you would feel safe placing your clients with them even if they did take the money. They are canning you and will only try to take them from you in the future. Do yourself a favor and save your clients and yourself from a lawsuit against you for placing your clients in a company that you knew at the time was in financial crises.
Re: Aviva Cuts Next Tier of FMOs
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Re: Aviva Cuts Next Tier of FMOs
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