After months of insisting that the two distribution companies would remain independent from each other, Empire Financial has had a change of heart!
Empire is now "de-emphasizing" Concordia Life and integrating its products and distribution system so that ultimately Concordia will no longer exist within the next 12 to 18 months. "We're trying to bring the two organizations together and make Empire Life the primary brand," said to The Insurance Journal Chris McElvaine, President of Empire.
The company will shift to common products. The intent at this point, explained Mr. McElvaine, is to phase out Concordia's products. "But there is no rush," he continued. "We will keep the products as long as they stay viable." It may take some time to change, he said, but it should be within the year.
Empire, however, will be keeping Concordia's MGA distribution system. The company is thus taking a double prong approach: one through its independent financial advisors under contract, which is its current network, and the other through the Concordia MGA distribution channel. This means that all of Empire's products will soon be potentially available to every broker in Canada. Previously only its investment funds were available to managing general agents via Concordia.
Distribution through the MGAs will start as soon as the systems (the back office administration systems and the technology) can be put in place. "These things always take some time," said Mr. McElvaine, but "the change is in the works."
The integration so far: as of January 1, Concordia employees are now Empire employees. As for the products, there have been no changes since the introduction of Trilogy, the company's star universal life package. Sales for Trilogy have been excellent said Mr. McElvaine, but he would not release any figures yet.
Rumours in the industry were that the new Trilogy UL was Empire's first step towards aiming for the higher-end market clientele. Mr. McElvaine maintains that Empire aims at the mid-rage market, and there is no change to that focus. Concordia on the other hand, has always aimed to the higher end market.
Although he said there were no changes to the products, he admitted that it is on the agenda to do so in the near future. The first change may be a reduction in the price of its two T-10 products.
Another change has been the increase in the commissions of the investment funds as of January 8. The move was made to be more competitive in the fund marketplace and to increase its market share. Mr. McElvaine chose not to disclose his financial targets and market share goals at this time.
Its seg funds have automatically become more competitive in the industry since the new capital requirement changes, added Mr. McElvaine. The costs of Empire's segregated funds have always reflected a lower maturity guarantee (75%) and so no changes to prices were necessary, stated the president. In fact, it had that flexibility to increase the commissions on these funds.
Empire's strategies for the coming year are to increase its sales and support of face-to-face distribution channels, as well as to improve its communication and technology infrastructures. The major challenge for the industry in 2001, said Mr. McElvaine, is to focus on promoting itself. He feels that the rash of consolidation is basically over in Canada, and now it is time to get back to marketing the product.
The other challenges he mentioned are issues of privacy and market conduct. All the provinces are revising their regulations, and he said there are issues that insurance companies must deal with concerning the new federal privacy law. To "strengthen our issues of confidentiality of information," for example.
Asked about the outbreak of inter-company alliances, Mr. McElvaine said that although he feels he understands the rationale behind the deals, it is not a strategy he will pursue. "Branding is more important to us," he said. "We do not want to be a company with everything on the market," he added, "we just want to be the best in the area we operate in."