RBC Life Insurance Co. of Mississauga, Ont., is the product of a handful of acquisitions made by its parent, RBC Financial Group, and its strategy very much reflects a multi-channel, multi-platform approach.

“The industry has consolidated quite a bit over the past 10 years with all the M&A activity that has taken place,” says John Young, president and CEO of the carrier. “RBC Life is a part of that.”

RBC Life includes a number of distribution platforms. It has a 300-member career sales force, a managing general agency business, national accounts, direct sales, near-branches and strategic alliances.

It counts up to 17,000 wholesale advisors who have done business through its MGA. “The vast majority of all life insurance and wealth [product sales] comes through the MGA channel, so it’s a very important channel for us, and one in which we’re very active,” says Neil Paton, vice president of insurance sales development at RBC Life. At least a third of its living-benefits sales arrive via the MGA channel as well.

RBC Life’s national accounts include advisors at sister firm RBC Dominion Securities Inc. and other traditional investment dealers and mutual fund dealers across the country. The company has also developed a strong market among small insurance brokerage outfits, and some of the larger, multiple-advisor producers. “We have a lot of history there, especially in the living-benefits marketplace,” says Paton.

It doesn’t end there. RBC has a long-standing corporate partnership with State Farm Group of Cos. , based in Illinois. RBC provides individual disability insurance to the Canadian unit, Aurora, Ont.-based State Farm Insurance. It also offers the same product through Sun Life Financial Inc.

“Where other entities don’t have the skill or expertise that we do, we form strategic alliances with them,” says Paton. “We have a number of relationships like that.”

Among those relationships, RBC provides an exclusive universal life product to Toronto-based PPI Financial Group, the national managing general agent and brokerage that has carved out a niche in the high net-worth market.

RBC Life’s direct sales channel is also growing quickly with the help of third-party agency, the Edge Benefits Inc. , based in Newmarket, Ont., through which it sells what it calls “simplified” life insurance. The Edge provides product administration and markets disability insurance mostly to small business owners who do not have the finances to fund a full employee benefits program.

“We have a method in which we insure [the policyholder’s] gross revenue, as opposed to net income, which is a problem for self-employed people,” says Paton. “So, we’ve had quite a bit of success there over the past five or six years.”

Most recently, RBC Life launched simplified critical illness insurance for coverage of cancer, heart attack and stroke, with benefits up to $75,000. It also announced new renewable rates for its term 10 and 20 products.

Not to be forgotten, the company operates a 300-advisor career sales force as a national entity separate from other channels. Last year, it equipped this sales force with new laptops that were loaded with illustrations software. The advisors, spread among 19 branches across the country, concentrate mostly on life insurance sales, with about 10% to 15% of their sales in living benefits. Full financial planning is not yet part of the equation for the advisors, says Paton, and, as such, new recruits are expected to meet minimum regulatory licensing requirements — although the certified life underwriting designation is encouraged, says Young.

CAREER AGENTS

Paton notes the career channel tends to attract recruits who appreciate the value of the RBC brand, the training program and the breadth of the product offering. “We have a bank act that prevents us from certain activity,” he says. “But there’s a lot of things we can do to promote awareness of insurance and provide general information to those customers, which can drive more opportunities to our organization.”

Branch managers are under orders to hire, train and develop growth organically, one rep at a time. “That means bringing in young talent,” Young adds, referring to the aging insurance advisor.

Rounding out the distribution are the so-called “near-branch” outlets that RBC Life has bundled together on street corners and in strip malls with Royal Bank of Canada branches. These tend to sell mostly property and casualty insurance, product categories that are not under CEO Young’s watch. But, he says, the outlets are increasingly selling the simplified life insurance and living benefits solutions as well.

@page_break@“The growth we see in these channels is high from a percentage stand point,” he says. “But it may be because the base is rather smaller.”

This smorgasbord of distribution channels hasn’t necessarily satisfied RBC Life. If the right opportunities came along, it could still open up more channels with other acquisitions. “We think of ourselves as a multi-channel organization,” Young says. “And we’re trying to reach a broad swath of clients. To do that we know we have to run effectively multiple distribution channels.”

SEG FUND OFFERING

On the product side, the company has jumped into other waters. In November 2006, it launched 12 segregated funds, or RBC Guaranteed Investment Funds, with underlying RBC Asset Management Inc. funds, as well as four model portfolios to suit different investor profiles. Sales “met expectations,” says Young, and the company added two new funds to its lineup in 2007.

“We wanted that seg funds offering, because it is a key product for asset-accumulation solutions but for income-distributions solutions, as well,” adds Young. “Or, for mitigating the risks of investment after folks retire because of the guarantees that seg funds offer.”

He notes that RBC is watching the guaranteed minimum withdrawal benefit market closely, but it’s not about to make any product announcements of its own.

Inside the RBC Financial Group, RBC Life is well supported, adds Young: “Royal Bank recognizes the role that improving insurance results can play in differentiating us, and moving us away from other financial services institutions.”

RBC Life’s executives see an opportunity to service and sell to a large group of Canadians whose needs are not being met by the marketplace. They say the overall RBC Financial Group was created to develop wealth-management strategies among the traditional banking, brokerage and insurance silos as much as is possible under current regulations. “It’s in its infancy, but it’s still a mammoth opportunity to serve the Canadian marketplace,” says Paton.

“We have robust expectations about the future potential,” adds Young, “and growth that can come out of this.” IE