Toronto-based AIG Life Insurance Co. of Canada is not only bolstering its sales and marketing presence across the country, it’s also readying for next year’s launch of a segregated fund with a guaranteed minimum withdrawal benefit.

Peter McCarthy, CEO of AIG, the Canadian subsidiary of New York-based American International Group Inc., wouldn’t say when the carrier’s GMWB seg fund would become available, but he confirms that servicing the traditional investment dealer network with this product is an important part of the parent’s Canadian approach.

“Certainly, part of our strategy is to do better in the market than we’ve done in the past five years,” McCarthy says of forging better ties with investment dealers. “We’re there, but we want to do better.”

AIG’s goal in Canada is to achieve top-five sales status in each of the term, universal life and segregated fund categories. As well, McCarthy expects the company to be among the top five in the structured settlements market and in several annuities categories by the end of 2008.

AIG has stiffened its backbone in advance of its GMWB product launch with the addition of several regional sales and marketing personnel — each of them with a his-tory with Maritime Life Assurance Co., which was folded into Toronto-based Manulife Financial Corp. when Manulife bought Maritime Life’s parent, Boston-based John Hancock Financial Services Inc., in 2004.

Randy Chapman joins AIG as regional vice president, Western Canada, and will be based in Calgary; Peter Wong, regional sales director for British Columbia, reports to Chapman; Don Wilson takes on the newly created role of regional vice president, sales and distribution, for Central Ontario; and wholesalers Andrea Hampton and Martin Lydon also join the Ontario region.

“I worked with our management team,” says Daniel Dessureault, vice president of sales, who joined AIG in the autumn of 2007, “making the case that part of [the strategy for] growing our business — and market share — was to beef up the complement of people so that we had the right number and quality to tell the AIG story.

“[The new hires] each have broad distribution experience, which makes them qualified to work with all the distributors,” adds Dessureault, referring to investment dealers, mutual fund dealers and managing general agents that carry AIG products.

The sales structure, Dessureault says, is based on the mutual fund dealer model, which hinges on wholesalers that focus on key relationships with distributors, which, in turn, “can get hold of somebody to help them with a case, or a product inquiry.”

Although Dessureault, Wilson, Wong and Chapman all have their background at Maritime Life in common, they arrived at AIG having taken various routes. Wong comes via Winnipeg-based Rice Financial Inc.; Chapman held the role of distribution and corporate development with Wellington West Capital Inc., also of Winnipeg; Dessureault, formerly general manager for Equinox Financial Group Inc., joined AIG after Manulife absorbed Equinox, which it acquired when it bought Maritime Life; and Wilson had been a senior manager with Alterna Savings, the third-largest credit union in Ontario, and had managed national accounts at Maritime Life.

“I’m not sure it’s an active strategy,” says McCarthy, who spent nine years at Maritime Life before joining AIG, of the connection to the now-defunct Maritime Life. “But we’d like to continue to emulate some aspects of its model.”

Maritime Life was well known for its strong service offering and sales performance.

AIG’s GMWB product will compete against those already launched by Manulife, Toronto-based Sun Life Financial Inc., Quebec City-based Industrial Alliance Insurance and Financial Services Inc., and Montreal-based Desjardins Financial Security. A handful of other insurers have acknowledged they’re in the process of developing a GMWB product, including Toronto-based Transamerica Life Canada, which is a unit of Netherlands-based AEGON NV, and Kingston, Ont.-based Empire Life Insurance Co., a subsidiary of E-L Financial Corp.

The GMWB product category, aimed at pre-retirees worried about the volatility of financial markets, has already gathered more than $4 billion in assets in Canada. Generally, these products guarantee no capital losses in the financial markets, plus a minimum withdrawal feature of at least 5% a year annually for at least 20 years — assuming the policyholder leaves the investment untouched for at least 20 years.

The GMWB product “is something that a few insurers can offer and that some of the other financial institutions in Canada and U.S. can’t offer,” says McCarthy, referring to the fact that Canadian banks can’t sell life insurance product through most of their distribution channels. “There is a good 20 years of this market left. The prime clients in this market are in their mid-40s to 65 and beyond.”

@page_break@According to Byren Innes, who as senior vice president with Toronto-based NewLink Group Inc. is a consultant to the insurance industry, AIG has strong distribution relationships with many MGAs, while its competitors — Sun Life, Manulife and Great-West Lifeco Inc. of Winnipeg — tend to have stronger relationships with the insurance specialists at the independent and bank-owned investment dealers. Together, these three competitors take more than 70% of all annuities business, including segregated funds.

But the arrival of the GMWB product constitutes an opportunity for insurance companies with the product in their arsenals to appeal directly to advisors at the dealers, Innes adds. Their clients will demand it.

“A potential advantage that AIG has is its experience in the U.S. marketplace,” he says. “It can introduce version four [of the product] instead of version two.”

To that extent, Dessureault, as national AIG’s vice president of sales, is in charge of brokering relationships with some of the large investment and mutual fund dealers. CI Financial Income Fund, which own dealers Assante Corp. and Blackmont Capital Inc., for example, already has a sales partnership with its one-third owner, Sun Life. Insurers such as AIG are looking for relationships like that as well.

McCarthy counts the boost to AIG’s sales team as part of the parent company’s commitment to increasing its strength and brand as part of a global initiative.

He notes that with regulatory approval pending at the beginning of June, AIG’s numerous Canadian property and casualty units will consolidate under one AIG brand. And although AIG is a mid-sized player in the life markets, McCarthy adds, the firm is the leading P&C insurer in Canada ranked by premiums.

AIG’s parent posted a loss of US$7.8 billion for the quarter ended March 31. That included a US$9.1-billion loss on a senior credit-default swap portfolio held by AIG Financial Products Corp. As for AIG, it had premium income of more than $541 million and income from investments of about $6.5 million in 2007.

In the parent’s annual report, it notes that its branding strategy includes a £56.5-million (C$110 million) main sponsorship and jersey deal with Britain’s Manchester United Football Club — one of the largest sporting franchises in the world — that lasts until the end of the 2011 soccer season. IE