Episode 5 with Jon Stenberg, Executive Vice President Life Division at Symetra

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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.

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Welcome to Beyond the Challenge. Here are your hosts, Kevin and Sandy.

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Kevin: Welcome to Beyond the Challenge. Today, we’re going to talk with Jon Stenberg, Executive Vice President with Symetra, about how technology is helping to close the coverage gap in the US. Jon, welcome to Beyond the Challenge.

Jon: Well, thank you, Kevin. It’s great to be here.

Kevin: Could you tell me a little bit about your career in the insurance and financial services?

Jon: Sure, Kevin. I joined Aetna Life Insurance — actually, Aetna Life and Casualty in 1990, in January, and I joined in a rotational program where I was supposed to see different business units and get exposure to different parts of Aetna’s overall business with the goal of going into corporate finance. From there, though, the program was cancelled and so I was temporarily out of a job and the life insurance division picked me up, which happened to be the first division I had been exposed to, and I worked there in different capacities from working on product development to competitive intelligence until I was hired as a wholesaler internally by Aetna and that really changed the trajectory of my career. I went from working on the products to actually selling them, which is a pretty rare thing. And then, from there, I was hired by Lincoln Financial Group to be a wholesaler out in California. But after a while, I really wanted something more strategic, it’s just how my mind works, and so I took over a project to revitalize the independent planner channel at Lincoln going into management and rebuilt that. That was a lot of hard work but a lot of fun. Went from two to a hundred million sales in about three years, adding a lot of new accounts and whatnot, hiring some wholesalers. And then, from there, I decided I really wanted to get more strategic and I decided to apply to Wharton for my MBA, was accepted. I took a job at UBS as an operational person running their life department and while I was doing that, I was doing my MBA down in Philadelphia and so that was interesting. Coming out of that, hired by New York Life to run their product development for life insurance so that was a step back into product development and really enjoyed that. Did that during the crisis of ’08 and ’09. And then, the job I, you know, I had been looking for opened up at Ameriprise and Ameriprise hired me to run their life division and that was a lot of fun. So, I did that there for seven years. I had a lot of fun doing that, was able to change a lot of things. And then Symetra knocked on the door and they said, “We really wanna grow our life division,” something that at the time Ameriprise was not as interested in doing in rapid growth and I really liked the international aspect of Symetra being owned by Sumitomo so I took the job I have now running the life division at Symetra and I’m having a blast.

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

Jon: As is typical, unless you have a family member in life insurance, it was in a roundabout way. I was a finance major in college and so that was heading me towards, I thought at the time, a career in banking, but a recruiter, in the last minute, as I had a couple offers from a bank, said, “You don’t wanna go to banking. They’re gonna go through all sorts of turmoil in the 90s.” This conversation was in December of ’89. “They’re gonna go through all sorts of turmoil. You really need the stability of life insurance company, of a large life insurance company to grow and nurture your career.” I wasn’t so sure it was gonna be non-changing, as he was trying to convince me, but the job was in Hartford, Connecticut, instead of Detroit and that had a huge appeal to me. So, we make decisions on odd things when we’re young and I decided on that basis to take the job at 151 Farmington Avenue in Hartford, Connecticut, with Aetna and here I am today, 30 years later, still in the financial services industry, still in insurance.

Kevin: In 2019, the total life insurance ownership gap, which shows the difference between perceived need and what is actually owned in the US, was 9 percent with millennials reporting a 78 percent shortfall and Gen Xers reporting a 48 percent shortfall in life insurance coverage, with the main reason being prioritizing between having stuff today and taking care of their family in the distant future.

Jon: Well, first, this is the right question to ask. I have a lot of passion around this coverage gap and I feel somewhat personally, having dedicated coming up to 32 years of my life to this profession and covering American families, that this gap has been stubbornly large and not shrinking but growing. So, I think, first, we need to ask why is this gap growing? Why is this gap expanding? Is it cost? You mentioned having things today versus protecting your family for the future. I don’t think it’s cost. Disposable income is higher than it was 40 years ago. The cost of a basic term insurance policy to protect your income as new parents, for example, has shrunk 60 percent and that’s cost per 1,000 when you compare that to disposable income rising over the last 40 years. This is really a low cost issue and I think, paradoxically, that might be part of the problem because it’s fueled the exit of many producers, advisors in our profession. Back in the 70s, we had close to 400,000 people that could talk to other people about life insurance in America and the population was less than 250 million people back then. Now, we have roughly 350 million people and the number of people that can talk to people about life insurance is half of that. So, life insurance is something that people do poorly buying themselves. It’s not like waking up on a Saturday morning and telling your loved one, “Hey, we get to go window shopping for Ferraris,” and they’re excited, they hop up in the morning, they’re gonna make a day of that. Life insurance just doesn’t get the same reaction, let’s be honest. It’s something that you’re not forced to buy like auto insurance, it’s something you should buy and you need to buy, but that leaves open the possibility to people obviously to procrastinate or buy less than they need and we haven’t done any favors to the industry by the process. Heavy paper, takes two months to get a policy, we stick you with a needle, we send people to your homes to put you on a scale and take your blood pressure and all this. The process is somewhat onerous, unless you buy really expensive simplified or guaranteed issue policies. So, part of the problem is we just don’t have enough people talking to people about life insurance. So, digital needs to step in and help here and it hasn’t to a great extent yet. So, if you think about the Insurtechs, if you think about the online life insurance options, they’re there but they haven’t quite cracked the code to replace a neighborhood relationship, talking to you over the kitchen table about your family and the needs of your family and getting you to buy that policy, whether it’s a whole life policy or universal life policy or just a basic term policy. It’s gonna be a challenge, I believe, to do that in the near future. I think this coverage gap will remain stubborn in the short term and, long term, I think we need to wait for solutions where people more and more may rely on their personal AI to handle things like basic insurance coverages and stuff like that and that could be 15 years in the future. Who knows? It’s hard to predict that stuff.

Kevin: How do you see new technology helping to close the coverage gap in the United States?

Jon: At Symetra, we have a lot of passion around this issue. We have a lot of passion around serving cultural markets, serving the underserved that we’re talking about here, particularly at the lower income strata and what we’re doing is we’re working right now, and we started this actually before COVID-19 even hit us, is we’re stitching together new technologies that have not been used in life insurance before in a way, I think, that is somewhat unique to drive down the cost and to dramatically speed up the application to issue process. We’re not the first to do this. We’re doing it in our own way. We looked at the technologies available off the shelf, we found them lacking, and so we are developing some technologies with some new partners and we’re really excited about this. We’re looking at launching the initial phases next year in 2021 and, eventually, we may actually put annuities on there or some voluntary products to help group insurance individuals and we’ll have, I think, an impact on this coverage gap by going into and we’ll be focusing on some of these underserved markets. We’re very excited about doing more in the cultural markets. We’re very excited about making sure that lower income families have the coverage that they absolutely need. They’re the least able to suffer a financial blow from the death of a breadwinner among all families and so it’s something that I think our industry needs to do a better job at. We need to step up as an industry and make sure that we heed our social calling.

Kevin: Jon, how will distribution need to change to help with the coverage gap?

Jon: That’s one of the most important questions of this entire thing. I mentioned the fact that we have half the life insurance producers and advisors in America today than we did 40 years ago with a higher population. That ratio is a huge issue. It’s been proven that, in the past, at least, the most effective way to sell life insurance is a neighborhood relationship, somebody you may know in your synagogue or temple or church or local club, a relationship you’ve developed and that’s somebody who knows your neighborhood and you and your family and they come and sit across the kitchen table, they see you in person and that’s a very effective way of selling life insurance. Once COVID is over, that’ll actually go back to being one of the key ways of how life insurance is sold. Digital will need to step up, obviously. That’s still something that we’re learning how to do right. We’re still learning how to motivate people to engage with the purchase of life insurance and go through the process. Even if the process was fully accelerated with no blood draw, no fluids, and very fast and very cheap, we still have a challenge capturing people’s attention and getting them to engage with the process and finishing the process and that’s something that we have not solved yet. We’re getting better. The amount of coverage purchased online is growing, but not enough to stem the growth of this coverage gap.

Kevin: Do you believe that producers feel threatened by the direct-to-consumer channel even if they are helping close the gap?

Jon: I don’t believe so. I have not talked to producers that bring this up to me as an issue. The reason is the direct-to-consumer model is really targeting the lower income and underserved markets and sometimes the cultural markets that we talked about before. These are markets that the producer, given the small size of the policies and the small premium, are challenged to get to from a financial standpoint, from an efficiency standpoint. They have to see a whole bunch of clients and sell a whole bunch of policies when the premium is $270 a year, for example. So, as you go up in complexity and case size, that’s when a human sitting across the kitchen table or in your office or in an attorney’s office is really effective and really needed because they can take the time to go through the nuances of the case, maybe figure out trust strategies and whatnot. But when you’re talking about protecting young, healthy people with basic income protection, it’s hard to do with a model that was successful for the last 100 years. Companies going direct to consumers or intermediaries who are online who focus on that, and there are a number of them, are really stepping in and trying to just sell the right business that humans are somewhat inefficient in doing because of the dramatically lower cost of coverage today.

Kevin: How is COVID-19 changing the way producers reach new clients and service existing clients?

Jon: Great question. I think across the industry, we’re not doing a good job reaching new clients in 2020, for obvious reasons. Many folks rely on that person-to-person contact to build a relationship and sell policies. That’s very difficult to do in the face of COVID. Many producers, I think, are doing a good job in servicing existing clients because they can talk to more virtually via video or phone than they can driving around and doing in-person meetings. Reaching new clients has been a dramatic challenge and I think that, post COVID, there may be, hopefully, some catch up in those sales that rely on face to face and, long term, I think this could help some producers that were stuck in the old model of having a hybrid model where they’re reaching Gen Xers, younger Gen Xers and millennials that don’t really want to meet face to face but are willing to do a video call and they can do a lot more than they can face to face. For those who adapt, this could be a really good thing, having a hybrid model where you do some in person but then you are doing a lot of video calls, you’re not having to travel, and that could be a really efficient models for those willing to adapt.

Kevin: Great insight and information there. How has COVID-19 changed the way Symetra sees your digital strategy?

Jon: Obviously, we’ve had plans to move from paper to digital over time. Traditionally, over the last 10 years, we’ve been focused on estate planning cases and larger cases where we’re working hard to go down market and as you do that, you digitize. COVID took about three years of planning and put it in about three months. Sometimes, you need a good emergency to get a kick in the pants and have things, decisions made really quickly. We also had some regulatory relief during this year so that we could do things online with less regulatory risk. We’re hoping that regulatory environment continues to be open to innovation. But in 2020, it certainly was. Obviously, regulators did not want producers meeting with clients face to face during the middle of the crisis and so certain accommodations were made by key regulators to allow us to do things digitally where it was a challenge before.

Kevin: With culture being part of the coverage gap, do you believe that better diversity hiring will help close the culture coverage gap?

Jon: Absolutely. The industry has a diversity problem. That’s obvious. At Symetra, it’s one of our goals to be the most inclusive life insurance carrier in America so diversity equity inclusion is something we talk a lot about and we’re very focused on. To answer your question about diversity hiring and closing the coverage gap within cultural markets, as you become more diverse, you become better at adapting and learning other cultures, working with other cultures to do business with those cultures in a way that makes them feel comfortable. A big part of this, though, is to build relationships and support agents within cultural markets because that’s often the most effective way to reach these markets are neighborhood agents within that culture. Oftentimes, there are language gaps if they can close or cultural understandings that they have and we just don’t have that will dramatically help here. To the extent where we go direct consumer, having a more diverse employee base will help us, again, do business in a way that reaches those cultural markets on their terms, not ours.

Kevin: That’s great. Look forward to seeing how the organization evolves over the next couple years. What is the single best opportunity the life insurance industry can capitalize on today?

Jon: I think one of the silver linings of COVID has been the acceleration of innovation to do business in ways that people want to do business with today and the regulatory acceptance of that innovation that has been, in certain regulatory bodies, they’ve been very resistant to some innovations and I think if we can continue to drive that innovation and work with the regulators to embrace that innovation, I think that’s probably the best opportunity we can to help drive down that coverage gap that is so stubborn.

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

Jon: The biggest thing, I think, by far is — it comes down to one word and that’s “curiosity.” Early on, I was curious about the world, I was curious about history, I was curious about government interaction and politics and how all this stuff worked together. I read voraciously on all this stuff. When I got into the business, I asked a lot of questions from different people in different disciplines. I was fortunate to be given the opportunity to work in different areas of the life insurance operations within Aetna and, later, Lincoln and New York Life. And all along the way, doing whatever I could to learn about other jobs and learn how things work. I got my FLMI, I got my CLU from The American College early in my career and really enjoyed those because those gave me some structured learning and a foundation so that, as I talk to people, I had more context. Highly encourage folks in their early career to take those steps. And through my entire career, just having a lot of curiosity. Grabbing lunches with folks in different departments and asking about their jobs and, this wasn’t the purpose, but accidentally networking in the process. I undervalued networking too much in my career but did it accidentally through wanting to learn all these different things, asking a lot of questions in meetings, making sure I had context. So that’s something anybody can do. It’s not a big secret but it’s something that I think people don’t take advantage of, just having a natural curiosity.

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

Jon: Well, it depends on what role you want to play in the financial services industry. If you want to be a really successful salesperson and build a business or build a career as a wholesaler, then I think you need to really understand people and you need to really understand the product. You can’t have one or the other, you need both to be a successful salesperson or a successful distribution person. If, on the other hand, you wanna be the CEO and you wanna go up through the executive ranks, then you’re gonna have to really understand the world in three different ways. You’re gonna have to understand geopolitics and how that comes down to the local level, you need to understand history so you have context, and you need to understand geography. You just would never see a Fortune 500 company having a CEO who’s clueless about history, clueless about geography, and didn’t understand geopolitics. This is a very global industry and things impact us from things overseas and so having that basis of understanding will provide a foundation and also make you a more interesting person to talk to, for those who are networking with you, and will give you the gravitas to be viewed as a senior leader, somebody that understands more than just the tactical but also the strategic.

Kevin: Now, let’s take a few minutes to talk about new government regulation and compliance that may challenge the life insurance industry. With your work with ACLI, you see the most current concerns and opportunities in Washington, DC. What regulation or compliance trends are you seeing for the insurance industry with the change of party leadership after the 2020 election?

Jon: Great question. There are probably four key items that will be the focus of the ACLI and the regulatory bodies over the next few years and only one of them really will be heavily driven by the party leadership. The first is illustration regulations. That’s something that we seem to have trouble getting right as an industry and in cooperation with the regulatory bodies, making sure the illustrations are understandable and we reduce the risk of differences between what the illustration shows and reality in the future. The second will be racial inequity. It’s something that was, obviously, given the 2020 events, something that’s on everyone’s mind and certainly the regulators’ and so we wanna do and in working with the regulators is making sure that we do a good review to make sure there’s no bias and discrimination within our policies, particularly underwriting policies, without harming the very technology which is gonna help drive closing the coverage gap in the lower income population. The next is DOL, obviously. DOL is something that will be impacted by the party leadership. We don’t know if it will be Department of Labor but it’s something that looks and feels like DOL. We’re expecting a lot of conversation around that over the next four years and we wanna make sure that that work on the regulatory side does not harm and increase the coverage gap, which is, you know, is what we’re concerned about. And then, lastly, we really need discussions with the regulatory bodies around regulatory modernization where we need them to embrace innovation within our industry, we need them to give us relief on some things that, for example, force us to drive paper on one hand but on the other hand, we have environmental regulations and desires to be more efficient and better for the environment and digital is good for that and we have conflicting regulations and conflicting regulatory concerns in those areas. And so, modernizing our regulatory system is a conversation we need to drive to our regulators.

Kevin: Jon, thank you for your time today. It’s been great to learn about how Symetra is helping close the life insurance coverage gap in the US and hear your perspective on possible upcoming regulations and compliance trends.

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