Episode 6 with Nicolas Lance, Global Operations and Transformation Executive

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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.

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Sandy: Welcome to Beyond the Challenge. Today, we’re going to be talking with Nicolas Lance about the future of distribution and how technology is helping cut costs and increase sales. Nicolas, welcome to Beyond the Challenge.

Nicolas: Thanks for having me, Sandy.

Kevin: Can you tell me a little bit about your career from where you started in the industry to where you are in your most recent role?

Nicolas: Thanks for having me, Kevin. I actually started in the industry over 20 years ago and with the international affiliate of Generali, which at the time was based in the Washington, D.C., area. It was a subsidiary by the name of Europ Assistance which provided insurance-based and affinity services to large groups, whether corporations or credit card companies and so forth. Then, I had an opportunity to join AXA. AXA had just became AXA and it was essentially with one of their regional branches in the mid-Atlantic area which was the head branch office for the District of Columbia, Virginia, and Maryland, and I was really the Chief Administrative Officer of the branch. We had approximately 400 financial advisors attached to our branch in remote locations throughout the territory. After about two years into that job, I was asked to come to New York, at the time, it was known as AXA Equitable, and to be the chief of staff. Then, from the Washington, D.C., opportunity, I was asked to come to New York at AXA Equitable’s headquarters to be the chief of staff for agency operations. Shortly after, AXA Equitable reorganized in various regions across the country and I was asked to be the Chief Operating Officer for the Northeast division which really included all the branch offices that AXA Equitable had, from Virginia all the way to Chicago, and represented roughly about 80 percent of the revenue of retail distribution at the time. And around 2004, 2005, I was asked to go to AXA’s Paris headquarters to assume the role of head of global internal communications and restructure and transform that whole department. It was to be a two- to three-year assignment, we completed the work in two and a half years, and then came back to New York where I became the Chief Operating Officer of what we called At Retirement. Shortly after that, during the Great Recession, I was asked by the head of International at MetLife whether I would consider an opportunity being based in London and be responsible for integrating the Alico acquisition for MetLife in Europe and India. I took on that challenge and spent two and a half wonderful years in London integrating those offices. Then came an opportunity with OneAmerica in 2013 where I was asked to join the organization as head of Retirement Income Strategies which was really an opportunity to look at all the lines of business that OneAmerica had and really look at the best practices, not only looking at consolidating technical platforms but also process improvements that could be leveraged from all the businesses. At the same time, I was asked to lead the biggest acquisition in the company’s history, which was the acquisition of the BMO Harris Bank 401(k) business. That was a very successful initiative. We were able to integrate both organizations within less than 18 months to go. And when that integration was completed, I was asked to assume the responsibilities to really transform OneAmerica’s retirement services business.

Kevin: How did you get into the insurance and financial services industry?

Nicolas: Well, when I was in college, I wanted to go into the financial services industry but didn’t really know whether I was gonna go in banking or in insurance and, literally, it was a little bit of luck. My parents were going overseas again and I ended up back in the Washington, D.C., area and, actually, a relative told me that Generali was hiring and they were looking for people with international backgrounds. I was fortunate to live overseas most of my life, spoke French fluently, and they were looking for recent graduates to hire so I applied and, really, within two weeks, got an offer and that was my first opportunity and really started from the ground up.

Kevin: What is your opinion about the future of distribution as we know it today?

Nicolas: I think distribution will continue to evolve. Consumers have more tools at their disposal today and, as a result, they may elect to go direct, as long as the product is a simple insurance product, or go to the advisor directly, especially if they need more advice and guidance, especially with, I would say, more long-term products such as annuities or there’s some kind of estate planning component that is involved. So, from a producer perspective, I do see that they can leverage technology even more by providing some information directly to their clients and there can be some back and forth electronically between the producer, the carrier, and the consumer at the end, but we’re on a relationship-based business and I don’t think that’s gonna change. It’s really at what levels does the consumer choose to interact with an advisor or not.

Kevin: Do you see carriers moving towards concentration of being a product manufacturer or distributor or both?

Sandy: Some carriers already have made that strategic choice, so to speak. Others are exploring it as we speak. But I think it’s really gonna fall into three buckets. Some carriers will find that their core niche is really assuming risk and manufacturing products and then partnering with distribution channels and distribution partners. Others will determine that career agency is very important to them and they will stick with that model. Others will use a hybrid model, combination of the two that I just mentioned and, really, it’s gonna be determined in terms of how their consumer base looks like today and how they project it to evolve over time and also looking at the cost structure of running a distribution channel or not. So, the short answer is I think there’s gonna be a model for everybody out there but it’s really gonna depend on the structure of the carrier and really how they feel the best way to penetrate their marketplace is gonna be by choosing one of those three models.

Kevin: Recruiting the best talent and establishing a diverse workforce are key success drivers of organizations these days. What has been your experience working in a multicultural environment domestically and internationally?

Nicolas: I think diversity is extremely important, not only because you wanna really penetrate all the diverse markets that we have but it also enriches the culture of your organization by bringing people with different backgrounds, experiences, and also it provides a way to relate to potential prospects and customers and things cannot be — we can’t look for a cookie cutter type of individual, so to speak. You have to have your framework in terms of what makes an associate successful going forward but also you have to really keep in mind the multicultural aspect, the diversity aspect, and the experiences that everybody brings to the table.

Kevin: In your experience, what programs are being implemented to attract and retain new talent?

Nicolas: I think today you can see it in today’s headlines. Really, organizations have found that diverse organizations are the ones that succeed the best. And I think, in order to do that, organizations have partnered with internal or outside search firms, because, really, the way you have to look at it is the more people you have talking about the opportunities that you offer as an organization, the most likely you’re gonna attract more potential recruits for your organization. I think it’s really trying to extend as wide a net as you can extend that net to bring in the best talent that you can.

Kevin: In terms of the life insurance business, what is the single biggest opportunity that the industry has?

Nicolas: I think the biggest opportunity is what the industry is doing right now, keeping up with the time from a technology perspective. The industry as a whole has, as we know, legacy systems, old technology, have inherited a lot of tech debt over the years, and, really, in order to enhance that customer experience going forward, there is no choice but to make the necessary investments in technology to be closer to the customer. That is something that everybody is working on as I speak, the only difference is everybody’s at a different level in the maturity scale, so to speak, but that is something crucial that the industry needs to do in order to really service its customers better.

Kevin: And in terms of the life insurance industry and the issues that it’s working through, what is the single biggest thing that keeps you up at night?

Nicolas: I think the single biggest thing that keeps me up at night is really having a plan B and Plan C because we’re gonna be relying more and more on technology. If your current technology for whatever reason doesn’t work, you gotta make sure that you have a backup and a backup to that backup so there’s no disruption in customer experience going forward.

Sandy: How can insurance carriers embrace innovation and transformation to improve performance and drive long-term growth?

Nicolas: Well, I think carriers really have no choice. It’s happening right now where a lot of investments have been made just trying to get rid of the tech debt, the legacy systems, and also providing more tools to producers and to consumers just to make it easier to do business with. And a lot of the projects that probably didn’t make the top 10 list of the CEO in the past are making them right now, especially with the pandemic which has really bubbled up a lot of the issues that have haunted the industry for many years. So, that’s great, but, right now, everybody is probably at a different space in the evolution curve in terms of getting rid of that tech debt, bringing those more modern tools, but it’s gonna be a continuous process that’s probably gonna happen for the next 10 years or so.

Sandy: That makes sense to me. What are the new trends you have been witnessing in the industry as a result of the COVID-19 pandemic?

Nicolas: Well, the first trend is actually remote working. How do you take care of your customers? A lot of companies have invested in VPN technology or remote call center technology so those who have done that have weathered the COVID storm pretty well. And I think also you see a trend in providing more digital tools to consumers but also to distribution channels and reducing self-service cycle time. So, those are the trends I see. It’s more kinda being able to service your customer remotely and then providing online, user-friendly tools where a customer or a producer can transact, whether it’s by a simple application or leveraging a Skype, FaceTime, or Zoom, or that one-on-one remote technology.

Sandy: What is meant by turning IT and operations areas into profit centers?

Nicolas: This is a big trend that’s going on right now because as we’ve seen, especially since the Great Recession of 2009 and every organization having experienced the low interest rate environment, which now seems will continue for the foreseeable future, organizations are not earning as much as they used to do in terms of the investments they’ve made. That’s number one. Number two, with the pandemic, for the most part, on average, lines of business sales, new business has been down, although this is temporarily. It is something that organizations can’t really rely on that organic growth rate as they used to. And then it’s really what remains are really the things that we can control, it’s operations and technology, and what I’ve seen is a lot of organizations investing resources in process improvements in order to reduce that cycle time and serve that customer and that producer better going forward. And once those process improvements have been made, in order to kick start them even more, leveraging robotics and automation to create scale going forward so as more new business is thrown onto new platforms, the hope is to see those operational per-unit costs go down in the future.

Sandy: We’ve all heard the saying, “Data is the new oil.” As companies are investing more and more in data technology, can you share, in broad strokes, the types of investments that they’re making?

Nicolas: Data is in fact the new oil and as organizations spend a lot of money on improving their technology, one thing that I would caution is before any organization invest a lot of money, take a good look at the quality of your data. That means your customer information and other pieces of data that are critical for underwriting purposes, for example, because what the industry is facing is several issues. Sometimes, the data is old and needs to be updated. Sometimes, you don’t have the whole universe of data points that you need to make an underwriting decision or even to be able to simply contact your customer via email or via text. So, looking at the quality of your existing data would be a start. Then, the other component is the accessibility of that data. You may have that data and let’s say it’s okay, it’s not that great, but you’re having a real hard time extracting it from legacy systems, so what do you do? So, the first thing to solve is the accessibility of data. Second would be the quality of data and once you have your data that is accessible and it’s quality data, another thing I would look at is how can you enrich your current data. There’s a lot of third-party partners that exist out there where you can get additional information on your existing customers. I think those are the three things that any organization needs to look at before investing a lot in technology because, really, it’s that data that flows through that technology and you gotta make sure that you don’t have a situation where you have garbage in and then garbage out.

Sandy: That adage never changes does, does it?

Nicolas: That’s right.

Sandy: Companies have been investing heavily in customer experience initiatives in recent years as well. Have you seen a return on these investments and how have they materialized?

Nicolas: The answer is for those that have a strong business case attached to it, those cost savings have really materialized. But also, it has enhanced that customer experience. That’s something you don’t see overnight but that’s something, usually, with any a large scale project, I would highly recommend that there’s a three- or four-year monitoring period after that to really see not only the business case in terms of the assumptions that were made, did they come to fruition or not, and also putting in a system where you do get that customer feedback, because, although it’s intangible, it still has a lot of value, where, at the end of the day, you may not have quite realized that financial business case but if you can put a dollar amount to that enhanced customer value, then at that point, it was probably a project worth investing in.

Sandy: We’ve talked about a lot of things that need to happen for many, many carriers, from cleaning up the data to customer experience to new technology across the board. Most companies cannot do everything all at once. Do you see a lot of companies looking at outsourcing some major pieces because there’s just so much to do all at one time?

Nicolas: There’s several answers to your question. One, you’re absolutely right, you cannot boil the ocean in a day. And for the large-scale project are identified to transform the organization, first, you gotta make sure it fits in within the organization’s strategy from a long-term perspective. Number two is you really have to pick and choose your programs because some of them, you may have to execute one before you start on the other so there’s this domino or ripple effect that happens so that allows you make sure that the sequencing of those projects is done in an orderly fashion. And for these large-scale initiatives, what’s important is determining, and that goes — that’s part of the strategic work that has to be done. First is what are the things that, as an organization, you wanna control and the things you can have a partner do? And really concentrate on those core initiatives that you wanna control and probably outsource the ones that do add value but are not part of your core offering.

Kevin: What is the biggest thing you did that had a positive impact on your career?

Nicolas: The biggest thing I did that I think not only gave me the most joy but also helped me in my career was being involved at a very early age as part of the team of implementing very large acquisitions because what that did was, first of all, you learn to work under extreme pressure and, usually, it’s about a year- to two-year timetable in terms of fully integrating to organizations, depending on their size and scope and so forth. But that type of experience, what it allowed me to do is be able to touch every department in a financial services company and really understand where everybody is coming from and understand also that end-to-end process from when the time the sale is made, once it goes into underwriting, and the whole process to policy issuance. To me, that is something that really gave me the joy of understanding every step of the insurance value chain and really understanding the nuts and bolts of an insurance organization.

Kevin: What advice would you give to someone looking to get into the insurance and financial services industry?

Nicolas: We’ve all been told that we are in a relationship business and that is very true. Even though there’s been increases in technology where people can transact over the net, I do believe that having the right relationship skills and networking skills are extremely valuable in our industry. Not only if you’re a financial adviser, in terms of new business opportunities, but also internally, if you work at the home office, you learn that you work with other departments and it’s really important to build those relationships within a large organization because, as you’re completing these large-scale projects, once you’ve built those relationships, it makes it much easier to be able to pick up the phone and talk to somebody that you have a relationship with and having that trust or build that trust within that relationship to get a particular task done. And I found that relationship business, whether externally or internally, is something that’s very valuable in our industry.

Sandy: Nicolas, thank you for your time today. It’s great to learn more about how organizations can turn economic uncertainty, rising consumer expectations, intense cost pressures into high profits through IT and operations transformation and cost savings initiatives. If you’d like to learn more about how Global Corporate Solutions can help your organization save money and be more efficient, please visit our website at www.thegclgroup.com.

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