Massachusetts Mutual Life Insurance Co.'s new chief executive plans no major changes to its growth strategy, except for the modifications that real life thrusts upon it.

"We are in a fortunate position, because our strategy for 2010 is the same as it was in 2009 and the same as it was in 2008," said Roger W. Crandall, who took the helm at the Springfield company at the beginning of this month.

"We have had the same strategy dating back to 2005, when I became [chief investment officer]," Crandall said in an interview last week. "As a mutual life insurance company, we are in a position where we don't have to change our strategy and react to what happened in the previous quarter. We can look for the simpler things … because we work for our policyholders not for stockholders."

MassMutual reported record sales of its life insurance products last year. According to data from Princeton, N.J., research firm Kehrer-Limra, MassMutual's revenue from life insurance sales rose 8%, to $200 million, making it the third-largest underwriter of whole-life policies, behind Northwestern Mutual and New York Life Insurance Co.

MassMutual has increased its life insurance sales 14% annually over the past five years, according to Kehrer-Limra, while sales for the industry overall rose just 1% a year.

"We have always taken pride in focusing on the basics," Crandall said. "We believe that good underwriting and good investment results will allow us to pay the best dividends [to the company's policyholders] over time."

But MassMutual is a company that relies on its roster of insurance agents to sell its product at a time when competing businesses are exploring other distribution channels to boost sales.

Analysts go so far as to say that companies like MassMutual and New York Life, which both generate the majority of their sales through agents, will be forced to change.

Kenneth Kehrer, Kehrer-Limra's founder, said life insurance agents are shrinking in number and many are approaching retirement age. For many companies, the solution is to find alternative distribution channels — sell through banks, stock brokerage firms, on the Internet and through worksite marketing.

MassMutual does acknowledge and is planning to some degree for the shifting demographics of its work force. Crandall, who remained chief operating officer after succeeding Stuart H. Reese as CEO (Reese is now nonexecutive chairman), said MassMutual is examining other channels and considering introducing new products.

It plans to keep expanding its roster of insurance agents, which has increased 35.1%, to 5,000, over the past five years. As Crandall, who has worked at the company since 1988, puts it, life insurance remains a product "that needs to be explained and sold."

"Our investment in our agent force is paying off," he said. "We are going to continue to add agents. This is an excellent environment. Recruiting has increased and we are focused on adding more multicultural and female agents."

A quarter of MassMutual's agents are women, Crandall said.

"We are big fans of demographics," he said. "We look at where and how wealth is being created, and by 2040 or 2050 we are going to be a majority minority country. The business leaders of the future are people of color and women, and we want to be in a position to manage their wealth."

Crandall said his company's line of retirement products may change, even though the retirement services business generated "record" sales last year, rising 25%, to $4.8 billion.

After stopping the sale of several variable annuities last year, MassMutual "will take a look at how we can offer new riders" this year "that can be offered to consumers at a reasonable price," the CEO said.

MassMutual had $415 billion of assets under management on Dec. 31. Crandall said he expects "growth overall" in revenue and earnings this year.

"We have good momentum in all of our businesses," he said. "We have record pipelines and excellent visibility in the RFP market, and assets under management jumped in January as insurance sales continued its strong pace from December. We had a great end of 2008 and improved on that 2009. We have the momentum to continuing to grow this year."

This story was reprinted with permission from American Banker.

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