LifeHealth.com

Page 3 Profile

 

C. Nick Catrini

Aiming High

by Carolyn S. Ellis
L&HA Features Editor

Nick Catrini is Managing Principal of the New York Metro Office of Highland Capital Brokerage. The agency distributes individual life and health products, including disability and long term care, with a focus on wealth transfer product solutions for high net worth individuals.
Mr. Catrini is the former chairman of the R. E. Lee Group, US of which he was a founding partner.

L&HA: Where does Highland Capital Brokerage fit in the insurance market?
NC: We are a life brokerage distribution channel for National Financial Partners (NFP). The thrust of our business is dealing with high net worth individuals, and in brokerage that might sound like an anomaly. Traditionally brokerage has provided life insurance and individual health products on a wholesale basis. We do surplus business, annuity business, and term insurance, but we also specialize in providing products for the high-end market.

L&HA: Are the products different for high net worth individuals?
NC: Products are the same for everybody. The difference is we develop our own solution modules for estate planning and business planning. These are created and managed by a group of attorneys, actuaries, underwriters, and marketing individuals based in Austin, Texas. Our sales vice presidents assist the retail producer with high-end solutions. The modules are software-based, and the major carriers are connected to them.

L&HA: Do the end-producers work exclusively through you?
NC: We would love that, but no, they don't. These high-end producers are very independent, so we try to offer a service that will garner the majority of their business, and quite a few do.

L&HA: What brought you to this point?
NC: I started in 1969 in property and casualty, with The Aetna. In 1972-73 I got into the life side there, and after ten years  made the transition into life brokerage. I came back to New Jersey in 1981 to purchase a small brokerage operation, and the rest is history.

L&HA: It sounds like you grew the agency quite well.
NC: The agency was a very small operation for Crown Life when I bought it. We worked hard and we built it. I started working what we called the 'alphabet houses': Alexander & Alexander, Frank B. Hall, Marsh & McLennan. We created resources for their very large cases. Around 1985 we started working with Merrill Lynch, and we became specialists dealing with all the major investment houses on Wall Street. Our sales vice presidents could go into a Paine Webber or Smith Barney and assist the financial consultants in making the sale. To this day probably 50 percent of our revenue comes from investment houses like UBS or Wells Fargo. The other 50 percent comes from independent producers.

L&HA: Distribution has evolved quite a bit during these years, hasn't it?.
NC: The thing I enjoy most about this business is that it hasn't changed and it has. There's always going to be a need for life insurance in this country to protect families and businesses. What has changed tremendously is the method of distribution and selling life insurance.

L&HA: What would you say is the biggest change?
NC: The greatest change would be the advent of guaranteed universal life because once the carriers guaranteed the life benefit, insurance became a legitimate asset class. Prior to guaranteed UL, the biggest change was universal life because it made everything transparent. With UL you not only know what the premium is, you know the actual cost of the insurance, expenses, and mortality charges. You can increase or decrease premium payments. This created a dramatic change in the way life insurance was sold.

L&HA: What about recruiting and training sales professionals?
NC: That is one of the biggest challenges for this industry. There are fewer younger individuals coming into the business. The market is maturing and there is a serious question about who's going to replace these agents. It used to be that big, captive companies were always actively recruiting. That's diminishing. We as an industry need to find a way to bring in new blood.

L&HA: We understand that more college graduates are looking at financial services because other jobs are scarce. Isn't that a good thing?
NC: It's easy to bring them in, but we have to keep them in. Most have quick success selling to family and friends. Once they exhaust the contacts they came in with, their draws start decreasing because commissions kick in, and they don't get established quickly enough. Independent, successful producers should start bringing people under their wing. What better individuals to learn from? However, producers aren't willing to do it on their own. The insurance carriers have to be an integral part.

L&HA: Today's younger generations are comfortable purchasing online. What does that mean for insurance sales?
NC: Purchasing life insurance online is middle market at best. Let's say you just bought a home and you need to buy a half million dollars of term insurance. If the bank isn't selling it to you, you could go online and do a pretty good job of it. Or you could find a financial planner online.
But businessmen and women who need a succession plan have to find someone who understands what they are doing,  the type of insurance, amount of premium, trusts to set up. With a mature population there are also health issues. We all live with a lot of stress today. We may work out all the time and watch what we eat, but stress is a killer. There's not a case we receive in the high net worth area where there isn't some underwriting that has to be done and some negotiating and recommendations that have to be made.

L&HA: What about the middle market?
NC: With the economy like it is, these are the people really feeling the pinch. It's very difficult to make a full-time living just in the middle market. There are people who do it successfully, but it's tough.

L&HA: How do you see prospects for the industry?
NC: Here on the East Coast we are going through some tough times economically. The economy took a tailspin, and the 2010 tax act came in. But what happens in 2012, at sunset? I believe we're going to be back with estate taxation. In this country we cannot survive unless we collect taxes. Still, there will be a lot of opportunities in the high net worth market. Overall I am positive about where this business is going.