What do you think it will be like for Insurance employees after the subsidiary is owned by these private equity groups? Better or worse?
5 replies (most recent on top)
They will bleed it dry and then sell off the pieces.
In theory, insurance will be able to operate more efficiently without the blanket regulation that comes as a subsid of a bank. It has always been a challenge to explain how hampered agents are, when compared to any of the other larger brokers in the industry.
That being said, all but a select handful in insurance are worried about layoffs and general direction of the business in the days that remain with the bank, and beyond. Nobody knows how the buyers will reshape the business. And PE firms can just as easily part things out as they can keep it intact and grow the business.
Because the 401k matching was reduced, and the pension is going away post sale for those who still have it today, many are preemptively leaving. Management has leveled the playing field, reducing their competitive advantages when compared to other brokers.
If you survive, then you will be fine.
Two things.
First, every financial sector has a significant regulatory burden in this environment. The bottom line (pun intended) is the margin, and is it accretive to the corporation as a whole. It is hard to argue that Insurance has not been accretive to Truist. Only a short time ago executive management was singing its praises for that very reason.
Second, will you be deploying your “savings” to higher-margin segments? That is where I consider the reason for the sale dubious at best. A tremendous amount of money has already been spent on the core bank (since the merger). Based on almost every financial metric, it is less efficient than prior to the merger.
My belief has not changed that this bank is being wound down for the short-term benefit of the executive team.
This strategy is common for avoiding the majority of regulatory requirements related to SOX, Antitrust, SEC, etc.... This is a massive savings in GRC, Audit, and Functional controls that would otherwise be required.