Kevin and Sandy Dougherty talk with Nick Lane, President at Equitable about the challenges insurers are facing as they try to meet new customer needs while improving their core insurance functions.
Nick leads the company’s Commercial Businesses and its Marketing and Digital functions. He is a member of the Equitable Holdings (NYSE: EQH) Management Committee. Mr. Lane has held many leadership roles in his nearly 15-year career with the company. Most recently, he served as CEO and President of AXA Japan, where he was responsible for a $5.4 billion annual revenue business and led a team of 9,000 employees and distributors.
Mr. Lane currently serves on the Board of Directors for Alliance Bernstein and has previously served on the boards of AXA Investment Managers, AXA Private Equity and AXA Real Estate Management. He has held leadership roles with key professional organizations, including Chairman of the Insured Retirement Institute (IRI) and Director at the Life Insurance Marketing and Research Association (LIMRA)
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(intro)
Beyond the Challenge is a podcast where executives in the insurance and financial services industry share their insights and experiences. Hosts Kevin and Sandy Dougherty talk with today’s top business leaders about what keeps them up at night and the biggest opportunity organizations can capitalize on today. We encourage you to listen, share, and subscribe to our program.
Kevin and Sandy Dougherty each have over 20 years of experience in insurance and financial services, corporate leadership, and executive search. They’re the owners of Global Corporate Solutions and Global Corporate Leaders. Global Corporate Solutions partners with organizations to gain efficiencies and contain costs. Global Corporate Leaders partners with organizations to enhance and evaluate talent.
Beyond the Challenge podcast is sponsored by Exactuals, perfecting payments and the data driving them.
Welcome to Beyond the Challenge. Here are your hosts, Kevin and Sandy.
(interview)
Kevin: Today we’re talking with Nick Lane, President of Equitable. Nick, can you tell us a little bit about yourself and your background?
Nick: Sure. It has been a wild and meaningful journey. I’ve lived in five countries, probably visited over 60. My journey, I was a Princeton lacrosse player, an infantry officer in the Marine Corps, joined a startup, went to business school then worked at McKinsey and then, for the last 15 years, have been in the financial services industry, working in the US, Europe, and Japan. Today, I’m president of Equitable and, prior to that, I was CEO of AXA Life Japan.
Sandy: Thanks, Nick. Welcome to Beyond the Challenges. There are several business challenges that established insurers are facing as they try to meet new customer needs while improving their core insurance functions. Some of the main issues we’ve observed are defining short-, medium-, and long-term strategies, transforming organizations to reduce operating costs and enhance customer experience, and optimizing the use of capital. Can you please provide us with a brief history of Equitable and where the company stands today?
Nick: Sure. Equitable is 160 years young and, over that period, had focused on helping Americans face the future with strength, courage, and wisdom through many periods of dislocations, world wars, pandemics. And I think that focus on consumer needs and preparing for that next chapter is critical. In 2018, Equitable separated from AXA Group and we IPO’d on the New York Stock Exchange as EQH Holdings, a broad financial services company. That represents 100 percent of the Equitable retirement and life businesses and a 67 percent ownership of AllianceBernstein. So, today, across the two companies, we have over 8,000 employees who help manage over 750 billion in assets for over 4 million Americans and clients out there.
Sandy: Wonderful, thank you. From your experience, how can insurance carriers embrace innovation and transformation to improve performance and drive long-term growth?
Nick: Yeah, you don’t stick around for 160 years unless you embrace innovation and transformation. And, to me, it starts with how does that help your consumer achieve their goals. How does that help your advisors be more productive and more impactful in their client interactions? And how does that enhance the efficiency of your backend operations so you can enhance the value proposition to your clients and shareholders? So, to me, it starts with mindset and it starts with this focus on continuing to experiment with new technologies, new ways of doing things.
Kevin: Nick, you’ve held senior leadership roles domestically and internationally. How does the international insurance landscape differ from the US marketplace?
Nick: I would start by saying, you know, the core needs that people have are similar globally, right? They wanna take care of their loved ones. They wanna take care of their families. They wanna prepare for a better future. And that’s what insurance and retirement does for them. With that said, you know, the nature of the regulatory regimes is different in Europe, in Asia than it is in the US. The competitive dynamics, open architecture versus closed architecture are different. And consumer sentiment is different relative to exposure to equities versus hard assets. These all influence the specific product designs in those local or regional areas. With that said, I would say there is a belief globally that the private sector plays a meaningful role in helping consumers out there in all three geographies as we face these demographic changes and as people live longer and are thinking about the importance of lifetime income.
Kevin: Thank you very much. What do you see as Equitable’s main differentiator?
Nick: So I would list three core differentiators. First, I think is a history of innovation. We were the first ones to launch a variable universal life policy. We were the first ones to come out with the variable annuity. Ten years ago, we launched the RILA space through our signature product, Structured Capital Strategies. The second is our focus on distribution, both Equitable advisors and or third party networks, believing and investing in distribution. That intersection of speaking directly with consumers has helped us discover new needs from which we can create products as well as pivot as the environment changes. And then third, I would say, is being a trusted leader in resilient segments. We’re the number one provider of kindergarten through 12th grade retirement plans. We’re a leader in the pre-retiree segment as baby boomers and increasingly Gen X prepare for that next stage. And we’re a leader in the variable universal life segment. So those three would be the core equitable differentiators.
Sandy: How do you see organizations like Google and Amazon entering the insurance space changing how the insurance marketplace works?
Nick: Yeah, it’s exciting to see new entrants coming into insurance, and I view them as partners. I view technology firms, the use of artificial intelligence, straight-through processing as a way to reinforce our value proposition to consumers. How does that help us connect with consumers better and how does that help us deliver our products in a more economical fashion? With that said, I would leverage what Jamie Dimon said, you know, the regulatory complexity of the US system does create moats and barriers and it’s hard for new tech companies to acquire the relationships with existing clients. So, in many ways, you see them partnering with existing firms to talk about ways to create new value propositions. But it’s an exciting time, we saw Ethos come out, SoftBank, Google thinking about serving the mass market in new ways. To me, it’s an exciting time and it validates the opportunity and the need that’s out there in American society.
Sandy: You think that they’re going to be undercutting prices, especially to get going to bring in that market share? And how is that going to affect pricing for everyone else’s current products?
Nick: I mean, I think you’re gonna see both disruption in several different ways. I think, look, today, in the wellness or financial services space, you’ve got zero-cost brokerage with E*TRADE. That notion of just access to product is going to be delivered cheaper. I think it pushes the value to advice, to planning, to connectivity, to portfolio management. So some will be disruptors, some will look to partner with the industry. I think all insurance companies need to cultivate disruptive thinking because if you don’t do it, somebody else is going to do it.
Sandy: Thank you. How is Equitable adjusting to the continued low interest rate environment?
Nick: Well, we manage our balance sheet on an economic basis and that means we’re anchored in the economic realities that we see out there. So the punchline to that is we are not impacted by drop in interest rates. So, to give a little bit of an example, if you’re doing traditional discounted cash flows, what are you discounting your liabilities at? And if you’re using current hedgeable market indices, then you’re hedging your liabilities where they are to now. You’re not using assumptions that interest rates will go to 3 or 5 percent in the future, and that means you’re protected if they drop. So we manage on an economic basis. We do not have any open interest rate positions, which translates to a strong balance sheet and assurance that we can deliver on our guarantees going forward. So, on a balance sheet standpoint, we are not impacted. On a product standpoint, we have continued to innovate new products to create value in different ways and this has been part of a journey for the last 10 years. Structured Capital Strategies, which is a buffered annuity, presents upside potential with downside protection so we’ve innovated the solutions in different ways, recognizing rates as they exist right now.
Kevin: Nick, do you see carriers looking at more strategic partnerships or keeping more in house?
Nick: My own belief is people are exploring new partnerships, given the dislocation you see in the industry and in society, given the unmet needs that you see out there, this partnership between insurance and technology, this partnership between platform companies and manufacturers. I see companies really looking for new partnerships as they look for new forms of growth and new ways to take care of their consumers.
Kevin: How do you see distribution evolving over the next few years?
Nick: You know, we hit on that a little bit. I see a continued focus on advice. I think the last 18 months, if you look back in this period of dislocation, the importance of advice, the importance of a humanistic touch remotely delivered will continue to be the trends going forward. When you look at all the change that is occurring out there, you have change potentially in tax policies, you have change in the way consumers want to receive and digest information, so the value to me is about delivering solutions, delivering portfolios. Products can be commoditized and that’s why you have to focus on innovation, you have to focus on needs, and you have to focus on advice.
Kevin: Nick, what is the best decision that you made that had a positive impact on your career?
Nick: The best decision that I’ve made is marrying my beautiful wife and I hope she hears this. Having a partner that supports you through the ups and downs, having a network is unbelievable. Professionally, I think it has been investing in myself, taking chances, whether that was moving to Europe right before the financial crisis, whether that was working in Asia. Being willing to expose myself to new ideas, new cultures, new ways of thinking, to me, I think has paid dividends.
Sandy: What advice would you give to somebody looking to get into the insurance or financial services industry?
Nick: My advice is it is an amazing industry. It’s gonna be a wild and meaningful journey. First and foremost, you are gonna have a positive impact on people’s lives and I think American society. Second is the only consistent is going to be change. It is an industry that leverages both EQ and IQ in terms of what are the needs that people have and how do you really create connectivity. At the same time, the products are sophisticated and the innovation and product design makes you leverage that part of your brain. So, for anybody entering the space, I would say it’s an exciting career and it’s gonna look different 10 years from now just as it looks different today than it did back in the early 2000s.
Sandy: What do you think is the best or the biggest opportunity that the insurance marketplace can capitalize on today?
Nick: I think there’s two things. One’s being consistent and this has been the demographic changes that we see in our country and, quite frankly, globally. That is, people are living longer and they need two things first, which is they’re thinking through what is the income or resources I need to live that next chapter of my life. The second thing is just as important, as longevity has increased, people have an extra 20 years. They have a whole new chapter. What are they going to do with that chapter? What is gonna be their purpose? What is gonna be their lifestyles that they want to achieve? I think this question of retirement and how people live in retirement and what they’re looking for. It is that new journey and that new opportunity that the entire financial services industry is gonna need to focus on.
Kevin: Nick, thank you for your time today. It’s been great to learn more about how equitable is staying relevant and growing profits in a disruptive marketplace. Thank you very much for your time.
Nick: Well, thank you, Kevin and Sandy, and I enjoy listening to your podcast. So have a great day.
Sandy: Thank you.
(outro)
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