Thoughts and Stories

The following notes represent the opinion of the writer, Mitchell R. Owen, CLU, CFP, and do not necessarily represent the opinions if The New York Life Insurance Company or its subsidiaries, nor should they be construed as professional advice.

September 23, 2008

It’s been just three weeks since I returned from New York Life’s annual Council meeting – an educational gathering of top agents from across the country. This is the 9th consecutive year in which I’ve qualified for and attended this prestigious meeting, and as always, I came away with some valuable information.

I have often said that I attend the Million Dollar Round Table meeting each year to remember why I am in the life insurance profession, and I attend Council to remember why I choose to affiliate with New York Life. This is particularly true this year, because this is a historic time for New York Life: Ted Mathas became the company’s 18th CEO on July 1, 2008, succeeding Sy Sternberg, who has retired after holding the post for 11 years.

Sy closed our recent Council meeting with reflections on the core decisions that shaped New York Life during his tenure – decisions that aligned the company with its customers and that focused on doing what’s right in key ways.

· Mutuality. As a mutual company, New York Life is owned by its policyholders, not shareholders. That means the company can take a long-term view in all its decision making. Publicly traded life insurance companies have an inherent conflict between shareholders, who benefit from short-term gains in earnings, and policyholders, who seek long-term stability. As Sy pointed out, if we made widgets, no one would care about our short- or long-term focus, only about whether we made good widgets. But because we’re in the business of making long-term guarantees, our customer-owners rely on us to be there 20, 30, 40 years into the future.

· Financial Strength. To ensure that it can keep its promises and provide its policyholders with peace of mind, New York Life invests in high-quality, low-risk investments, keeping the company secure and able to weather financial storms. Sy noted that our investment team has been very successful in recent years, recognizing the signs of trouble in the credit markets more than a year ago and adopting an even-more-conservative-than usual investment stance. As a result, New York Life has among the lowest exposures to sub-prime mortgages of any company in the industry.

· Career Agency. Sy reminded us that many life insurance companies moved away from career agency distribution in the 1990s, thinking that the Internet and other distribution channels could provide all the customers they needed. But New York Life recognized that well-trained professional agents were a key competitive advantage. So instead of walking away from career agency, the company invested in new technology, more education and other resources to strengthen its agents.

· International Expansion. Under Sy Sternberg’s leadership, New York Life recognized that expanding into high-growth emerging markets was a powerful way to leverage its high-quality brand and its expertise in life insurance product development, underwriting, sales and service. And the growth that New York Life is now enjoying in its international operations will further bolster its ability to keep promises to it U.S. policyholders in the decades to come.

I left the Council meeting realizing that my decision 9 years ago to grow with New York Life was a good one, not only for my family and me, but even more important, for the clients I serve. I have had the opportunity to grow professionally and personally, to provide advice that has helped my clients grow, and to have the resources behind me to make it happen.