Met Life Scandalous Sales Tactics

7/29/2019 Met Life Scandalous Sales Tactics

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Met Life Scandalous Sales

Tactics

By:Insert name

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January 22, 2007

MGMT303


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Table of Contents

Mission StatementHistory

The Scandal

S.W.O.T. AnalysisManagerial Recommendation

MetLife Today

Peanuts Ads. And MetLife Logos


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Mission Statement

MetLife s corporate vision

to buildfinancial freedom for everyone guidesthe company s response to people s

growing need for first-rate financialproducts and services through variouslife stages and economic cycles.


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Simeon Draper

First leader of thenNational Union Life

& Limb

Had difficult timegetting the companygoing

Eventually stepped

down and allowedothers to take thebusiness forward


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History

For 137 years, MetLife has been insuring thelives of the people who depend on us. Oursuccess is based on our long history of socialresponsibility, strong leadership, soundinvestments, and innovative products and

services.

In 1863 New York businessmen invested$100,000 to start the National Union Life

and Limb Insurance Company

In 1868 it changed its name to MetropolitanLife Insurance Company.


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History contd

In 1915 MetLife became a mutual companyand it began offering insurance two yearslater.

In 1929, smart planning and financial

stability ensured that MetLife survived thestock market crash with barely a scratch.

In 1964, MetLife begins to change, dropping

industrial insurance.

In 1974, it started offering auto andhomeowners insurance.


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History contd

In 1983, the company bought StateStreet Research & Management

In 1985, it bought Century 21 RealEstate and sold in 1995. It also boughtLondon-based Albany Life Assurance

In 1988, bought Allstate s group lifeand health business.


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The Scandal

Summer 1993 Florida state regulatorslooked into sales practices used byagents under Rick Urso.

Florida charges 87 Met Life agents withfraud.

Met Life charged with violating severallaws. License about to be revoked.


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The Scandal contd

Whole life insurance policies were being soldas a Retirement Savings Plan .

Insurance agents were using the term

Nursing Representatives instead ofInsurance Agents when making sales over

the phone.

A 1991 audit concluded that the terms Ursoused were not appropriate to sell theproducts. Yet, nothing else happened toUrso.


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The Scandal contd

Urso s office s sales jumped from$500,000 in 1989, to $2 Million in 1991.

An anomaly amongst all offices.

Even other field managers were upsetat Urso s tactics.

December 27, 1993. Rick Urso wasfired


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The Scandal contd

Entire industry rocked by scandal. MetLifeInsurance rating drops at several financialinstitutions.

Met Life is sued by employees for defamationof character, improper firing, and

Met Life settled in court to offer repaymentto possibly over 60,000 customersamounting to over $62 Million.


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S.W.O.T

Strengths

One of the largest insurance companies in the world.

Met Life has been in business since 1868.

Met Life has been able to change along with themarketplace and remain profitable.

Ranks #35 on the Fortune 500 list, currently.

Name recognition AND well known Peanuts advertisements.


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S.W.O.T.

Weakness Failed to watch for deceptive sales tactics.

Subject to marketplace. If wages go down,the need for life insurance may go down aswell.

Sales force is very independent. Thus, it isvery hard to monitor all branches andindividual agents.


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S.W.O.T.

Opportunities Met Life is able to branch out to many

different industries. (Banking, Finance,Properties, etc.)

Expansion into foreign markets is avery large opportunity.

Can be a global leader in insurance.


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S.W.O.T.

Opportunities In 2001 Met Life started the first bank owned by an

insurance company, so people could reach theirfinancial goals.

In 2005 Met Life acquired Citibank s Traveler s Lifeand Annuity. This included a lot of foreign businessand all for only $12 Billion dollars.

Met Life foundation paid out $32 Million dollars incontributions to many different programs andorganizations.


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S.W.O.T.

Threats Met Life has aggressive competition

from AIG and Prudential.

Major catastrophes can mean a lot ofvery large payouts.

Tightening of regulation by governmentat Federal and State levels.


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Problem Analysis

Met Life was too lax in enforcing its ethicspolicies. There was no follow-through whenviolations were pointed out.

Met Life should not have been deceitful

about who s fault it was. Met Life wasimplicated in scandal after investigation byThomas Tew, Met tacitly condones effortsof its nationwide sales force to sell whole lifepolicies disguised as savings or retirementplans. 1

1. Royal, Weld F. Scapegoat or

scoundrel?. Sales & Marketing

Management


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Managerial Recommendation

Met Life should be monitoring their salesforce more tightly.

They should not have decentralized theiroperations as far as their sales force isconcerned.

Consumers should receive a copy of buyer'sguide that describes how insurance policieswork.


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More Recommendations

All solicitations and materials, directmail or advertising that go out to thecustomers need to be approved by thehome office and their legal area andthey have to have writtenauthorization.

Every state has a 10-day free-lookperiod that allows a policy buyer toexamine a policy, and decide whetherto keep it


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MetLife Today

In 2000, Robert Benmosche took thecompany public and the stock offerraised $5.2 billion

The tragic events of 9.11 was a truetest of MetLife. MetLife respondedquickly.

MetLife signed a new contract to useSnoopy and the Peanuts characters foradvertisement for another 10 years.


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Peanuts Ads.And Met Life

Logos

Met Life Scandalous Sales Tactics

Documents

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