Chris Smith: Reimagining Insurance for Financial Resilience

Jennifer Tescher:
Welcome to EMERGE Everywhere. I’m Jennifer Tescher, journalist turned financial health champion. As founder and CEO of the Financial Health Network, I’ve spent my career breaking down silos by engaging with innovators across industries, and now, I’m sharing those conversations with you. Meet the forward thinking leaders challenging the status quo and unleashing creative new ways of improving financial health by seeing their customers, employees, and communities in 3D.

There is nothing like a crisis to remind people of the need to be more prepared the next time. Insurance is a critical tool for managing risk, especially in a country like ours where, increasingly, citizens are more responsible for bearing those risks themselves. My guest today, Chris Smith, sees the noble purpose of insurance. He’s a veteran of the insurance industry, spending over two decades at MetLife before taking on the job of Executive Vice President of Group Benefits at Guardian Life. Chris appreciates that behind every policy is a person and he’s passionate about helping people manage through life’s biggest challenges.

Chris, welcome to EMERGE Everywhere.

Chris Smith:
Thanks, Jen. I’m excited to be here.

Jennifer Tescher:
You’ve been in the insurance business for a really long time. And I’ve noticed that folks in insurance tend to stay in insurance for a while. Why do you think that is? What keeps you doing this work?

Chris Smith:
Insurance has a true noble purpose. It is a business, but what we provide to our customers is something that’s really valuable and it gets to the heart of our discussion. We’re selling something that people need to do well in life and be successful. 

We had a customer, one of their employees had an event where their young child was diagnosed with cancer. Having kids myself, they’re a little bit older, but just thinking through that, on how impactful a young child, that would be to have cancer and go through chemotherapy. The father had critical illness with us. And because of that, they had a 50% addition on their children. Which was a fair sum of money.

We got a call from the customer about how important this was and what it was going to mean. So we took some actions, we made sure that this was processed, it was easy. And we sent the check out within two days to the employee, to the father. Our sales rep then got a call from the father about how meaningful this money was, because it was going to be impactful for them, not just from a family perspective, but from a financial perspective. Because a lot of medical plans with high deductibles now, they don’t cover a lot of services.

This money was going to allow them to ensure that their child got the services that they needed to get healthy again. It was a good prognosis, which is really awesome. But then our sales rep went above and beyond, knowing the sales rep had a parent who had gone through cancer treatment, had a young child of his own, then reached out to make sure it was okay. But then sent a small gift card to the young child to say, “You’re not alone in this. We’re here for you. Use this money to buy a movie or an app for your iPad to keep your mind off of what you’re going through as you’re going through chemotherapy.”

Then we got a thank you note from the young boy. It was so impactful to people, that it just shows that the good hearts of people are really going above and beyond in the industry. As the gentleman, his name is Joe Jordan, he always gives these heartfelt speeches about living a life of significance. And those have always stuck with me, because whether it’s group insurance or individual insurance, we can help people live that life of significance and what we provide. And it’s really a special industry, I think for what we do for our customers.

Jennifer Tescher:
Both in this previous role at Guardian around operations, and then at MetLife, you’ve spent quite a bit of time executing on large scale innovation and change initiatives. And yet you have always been really focused on bringing customer voice into the process and engaging employees in that process. I talk a lot about the need to get out of our own silos and to be able to see people in 3D, see them in all of their complexity. It sounds like we sort of share that thinking. Tell me a little bit about your thinking and your approach in making sure that even when it’s about things behind the scenes, that you’re finding ways to bring people into the process.

Chris Smith:
That’s a great question and something I’m passionate about. I would say half joking and half serious, I could sit in New York all day and make decisions, I’ll probably break the place. Because it’s the people on the frontline and our customers that know what they need. This gets me going, if you can unleash the power of the frontline, they talk with our customers day in and day out. They know what delights our customers, and they know what frustrates our customers.

Often though, they feel like their ideas and their thoughts go into this black box, and they don’t know whatever happens with them. Were doing a couple of things to make sure that people’s ideas get out and are put into action. One of the things that we’re doing is we’re rolling out our new strategy. Companies always look at strategy and group benefits coming in as a leader, you look at the strategy. We’re creating this two-way dialogue, and cascading it down, but not just one way, but again, the feedback to come back up to make sure that people really understand where they’re going.

In fact, today I just had lunch with 10 people leaders. Because I wanted to make sure that when we send the message down, are we getting it back? I ask people to do this. And then out of the people that responded, gave us the feedback, I said, “Okay, I’m going to pick 10 random people.” I sent them DoorDash gift cards, buy them lunch virtually, would love to do it in person. And we chatted for an hour, about what they saw, what their teams saw, that they liked. Where do they need more information?

And you could see, because we had people from the underwriting organization, we had people from state filings organization, we had people from our product area. What I really loved about the conversation, is because you’re using the time to make sure that people understand it and getting their feedback, you can start to see, they all see how they fit into the strategy.

We’re thinking about how do you show this? If you think about products, every part of the company and how important products are to be successful in the market. But everybody in our organization, touches product development. Once they see how they touch, what is going to make us successful in the business, then they get excited about that. We’ve also put in place, and this was a few years ago, but we’re still using it, an innovation program, to where we can get ideas.

And we run these campaigns and these programs, and we get ideas from employees, but also our partners. How can they help us solve our issues that we’re grappling with? It’s so important to listen to the employees and to make sure that they know that they’re being heard and to give them the tools, not just to tell you where the issue is, but then to give them the tools on how do you solve the problems yourself?

I’m a big believer in the lean management system or you call it the Toyota Way, about giving employees the tools, whether it’s root cause problem solving or huddles and dashboards, they know kind of how they’re all doing and letting them go and empowering them to make the changes. I told you the story about the employee of one of our customers, whose young child had cancer. No one had to tell the sales rep to go ahead and reach out to make sure that they were okay. He did that on his own. And making sure people know they have that freedom to do that.

Jennifer Tescher:
We’re having this conversation just past the year mark since the pandemic lockdown began. The last year really opened a lot of people’s eyes to the reality that they weren’t prepared, financially, to handle a major economic shock. We know that insurance is designed to protect people against risks or against these shocks. We often talk a lot about the numbers of people who are uninsured, in whatever kind of insurance we may be talking about.

But even among those who do own insurance, we find that nearly half of them lack confidence in the insurance sort of being there when they need it. Which has always struck me as being strange, because I always think of insurance as really being peace of mind, that you’re buying peace of mind. And so to have about half of insured people say it’s not giving them any peace of mind, it seems problematic.

In our own research, through our Financial Health Pulse we showed that in August of 2020, 52% of people in America said that they were, “very, or moderately confident that they would have sufficient insurance to manage an emergency.” That’s about half, but it’s been falling. It was 58% a year before that, it was 61% in 2018. People’s confidence in the years leading up to the pandemic, it feels like it’s falling. And for black and Latinx policy holders, they’re twice as likely as their white counterparts to lack that confidence. I’m curious, what is that about? Why is that trend happening? Is this COVID related? Is it something more, what can you share about that?

Chris Smith:
I think if you look back at the research, it was even falling pre COVID. From ’18 to ’19 and ’19 into ’20, I think a lot of the research that you have, is really around the medical side.

Jennifer Tescher:
Interesting.

Chris Smith:
While we’re not in the medical business, we do see a rise in high deductible insurance plans, as being one of those causes and what that could mean. Because a good portion of people have the deductibles that are $2,500 or higher. But a good percentage of Americans don’t have $500 saved for emergency situations. So you have this dichotomy of, we have medical insurance, but there’s a high deductible, so if something happens, then it could be a significant impact to them.

Helping people understand that, my son who just turned 26 and he’s a freelancer, he’s buying plans on the exchange where he lives. And luckily he had me, who’s experienced in insurance to talk through all the different plans, whether it’s a silver or bronze and what’s covered and what’s not covered and what does the deductible mean? It can be confusing for people to pick the right plan because there’s many different variations on the exchanges.

Are there decision engines that can help people for realizing what’s important for them? Because all of us are individuals. I’ll talk a little bit about our partnership with Nayya. My needs for insurance products, for supplemental health or dental insurance or other things, are going to be different, because my kids are different stage in life. My kids are older and out of college and now have jobs of their own. Versus someone with young children at home or somebody with no children.

So that’s why we think our partnership with Nayya is extremely important. Because Nayya, what it does is, it uses artificial intelligence, and it brings in a whole lot of data about me as an individual. I’ve used it to help me make sure I’m picking the right plans. It brings in with the permission of the employee, obviously, is to bring in your claims data, ask you about your lifestyle and then it brings in information about the benefit plans. And it can make sure that you’re choosing the right plans, help you decide what the right plan is for you, as an individual, versus just a general part of society.

There’s a lot of research that we’ve done, that an open enrollment, a significant portion of people find it confusing with the information. They don’t know what is the right benefit plan for them. So that’s why we’re investing is to do that. Whether it’s with Nayya or simply put campaign, to make it more approachable to people, to understand what they’re buying and why it’s important for them. And to give them the confidence that this is the right for them as individuals.

Jennifer Tescher:
Right. Now, Guardian as a company, has been around for 160 years. Amazing. You are serving 29 million people through a range of products, life insurance, disability, dental, other benefits, both for individuals and through the workplace. Also, through government sponsored programs. What trends are you seeing among your own policy holders, particularly in your business, through the workplace? Particularly during this time where people have lost jobs, do you see people dropping coverage because they can’t afford it in this moment? Do you see more people cashing out on their life insurance policies? What can you tell us about what you’re seeing?

Chris Smith:
Sure, it’s a good question because COVID has had a significant impact on all of us. And we’re all dealing with our own situations with this. We see a couple of things happening. The first one I’ll talk about is, the increasing importance of technology. We’ve seen an increase, particularly with small employers, on the use of BenAdmin technology, to where in the past, it was bigger companies who did that, and they weren’t as focused on smaller companies. But they know that with now a distributed workforce, where a lot of us have been working from home for the past year, it’s not the same from an enrollment perspective. You have to be able to to ease that. And we’re seeing more focus on BenAdmin.

Talked about Nayya helping people using technology to help choose what the right benefits are for them. We’ve seen an increase in the desire to have supplemental health coverage, just like there was. We saw an increase in people’s desire for life insurance because with a pandemic, it puts your own mortality, and you want to make sure that your family’s taken care of if something happens to you.

But also, the desire to have supplemental health coverage, because if you do get sick, you want to make sure that you have the money to be able to pay your bills or to do what you need to do to take care of yourself. And we we’ve seen those. We’ve seen an increase in the use of self-service and the wanting to make that easier for people we’ve put in. I can talk a little bit about this.

Our Hugo interactions platform, that allows people to interact with a chat bot, to get the service that they want, to make it easier for them to do business with us. Because a lot more is going digital. Very early on in COVID, we basically had all hands on deck to accelerate, a lot of our digital transformation, because people weren’t going to be in the office. How do we think about getting evidence of insurability or EOI’s when people apply for life insurance? We have to make it easy for people to do.

I think the industry was on this pathway. Because sometimes people think it’s difficult to do business with insurance companies. And much like my relationship with my bank now, it’s all on my phone. I hardly ever go into a bank branch anymore, only when I have a problem or I need to get into a safety deposit box. I think people have that expectation now, for the relationships.

Amazon, I think I became best friends with Amazon Prime, because it became so easy for me. It’s, “Oh, I need this. Oh, it’s free shipping.” I just got to go and click. My wife says I get up just about a package every day from Amazon. But people are looking for that ease of doing business, and I think it accelerated a lot of our work to make that easier.

Jennifer Tescher:
It’s a big time of change in the world, and it’s a time of change at Guardian. Your former CEO, Deanna Mulligan just stepped down at the end of last year, after a decade at the helm. And Andrew McMahon was elevated to the role. While you’ve been in the insurance industry for nearly your entire career, you’re relatively new at Guardian. You recently took on a new role as head of group benefits and as a member of the operating committee.

I wonder if you might be able to tell us a little bit more about sort of big picture, where Guardian is headed as a company, and the issues that are top of mind for you. Certainly, it sounds like automation and technology is at the top of the list, but I’m sure there’s some others as well.

Chris Smith:
Sure. I’d be happy to do that. When I was brought into the organization, I was brought in to run operations and service for the company. I spoke with Deanna and Andrew, as part of the process. And just wonderful people and really great leaders and excited. If you haven’t read Deanna’s book, Higher Purpose, it’s a great read and talks a lot about the changes that Guardian has gone through over years. A lot of, how do we look at the changes in the way that we work.

And now Andrew, coming in as a leader and really looking at, how do we create a much more contemporary and modern insurance company? A lot of the focus that we have is around growth, our culture that we have and then taking pride and the mutuality. Guardian is a mutual insurance company, that’s owned by our policy holders. And that’s important to us, that we have the long-term stake, long-term view in mind. We look out for the best interest for our customers.

It’s an exciting time at Guardian, as we’re looking at our purpose as an organization and becoming, and we have been, but reinvigorating becoming a purpose led company, and what that means. Talked a little about the stories about our two customers that we’ve worked with, and that for me, gets to the purpose of why we’re here and what we’re doing.

But also bold goals. Group benefits has a growth agenda and looking at what that means from a technology perspective, looking at what that means from the products that we have in market, it’s an exciting time to be here. And the change that that Deanna started and Andrew is continuing on, to lead the company forward.

Jennifer Tescher:
You run the part of the business that delivers the insurance through the workplace. And the pandemic has really focused executive attention on the needs of their workforce. Coupled with the rise of stakeholder capitalism, it’s really driving, increasing investment in the financial health and wellness of workers. We certainly hear and see that from the companies that we engage with. What are you hearing from your employer customers on this front? How are they thinking about it? How big a priority is this? And what are you having to do to augment or change your offerings or your tools to support their needs?

Chris Smith:
Our customer needs are changing, because the needs of their employees are changing. Whether that’s the growing importance of mental health and the partnership we have with our Employee Assistance Program and making sure that those resources are there, we’re also looking at, how does mental health play a role in disability? Because often, sometimes when people are disabled, there’s an underlying mental health issue that comes with… That’s not the right word, comes with it, but that can be a secondary issue. We’re looking at the technology to help look at mental health.

So while you’re helping people with their main disability, we’re also providing resources from a mental health perspective. Because that it is growing of importance, as I think as creatures we’re social social beings. It is difficult for me, I’ve seen my son twice in the last year, even though he only lives across the river in Brooklyn. I’ve seen my mother once, my father, he lives in another state. So we’ve been very separate from friends and family members, and separate from work colleagues and the desire to get back into the office. That need is coming.

So focusing on the mental health aspect is important to us. I mentioned the growing importance of supplemental health. So when people do get sick, they know they have some protection against the rising costs of healthcare or the deductibles that they have, the importance of making sure that with our Nayya partnership, the importance that people know that they’re choosing the right benefits for themselves as individuals as well.

You mentioned in the beginning, is how people are underinsured. I think people are seeing that now. Because half of people have no disability insurance. Three in 10 people have no life insurance. This struck me, one in the three members who have a high deductible health plan, don’t have a health savings account, or another way to pay for those medical expenses. So this is growing in importance. I think this past year is showing that.

What really struck me early on, is when you saw the lines of people at food banks, to line up for food. It just showed you how precarious people’s financial situation is, and how important it is to address that.

Jennifer Tescher:
Another benefit that sometimes gets left towards the bottom of the list, for employees, is disability insurance. Why is that? Why does it matter? Talk a little bit more about that product?

Chris Smith:
Sure. Half of Americans do not have disability insurance, and it’s so important. I have a big passion around this, because the value that it provides and not just from an income replacement. If you think about when unfortunately someone has an accident or they’re sick and they have to be out of work, how do you help people get back, return to health and return to work? And so it’s not just about paying a percentage of income, it’s having the clinical practices or the vocational practices, to help people return to health, returned to work.

Because people want to be a productive part of the workforce. Employers want to have a productive workforce. Employees want to be at work. Do we have the practices and the capabilities to help people get back to work sooner? Unfortunately, sometimes people aren’t going to go back to work. But then they have the safety net of the income replacement, then if they’re going to be out, they can have their income replaced and continue to have the ability to pay their bills and to do what they need to do.

We’re going to be in market, now is offering Guardian absence solutions, to where we have an integrated approach. Because if you can understand when somebody is going to be out on whether absence leave or short-term disability, if you believe that they’re going to be a longer term disability, you can start to treat it very differently from the beginning and give them the access to the services and the capabilities.

And you can start to help people get back to work or look at at different vocations that they could work in. And it’s really important that people take this seriously. Because unfortunately, people do get sick, and there’s a stat here I’m trying to find. It always surprises me, the number of people who have an accident or have to be out of work because of a disability. It impacts a big part of the workforce.

Jennifer Tescher:
Well, we saw that with the pandemic. Maybe someone didn’t have a permanent disability, but they got COVID. And they needed to be out of work for some period of time. There was a big debate in this country, about what an employer’s responsibility was there, whether or not individuals had disability insurance. That leads me to one last question. You mentioned the safety net. And one of the many debates we’re having in this country is whether the safety net that we provide, is sufficient and sort of whose job is to provide it.

But the employer really ever since the end of World War II, has played a really big role in providing a safety net, particularly for those who are employed. And over the course of the last two decades, maybe a little bit less so, there’s questions about the government’s role in providing a safety net, particularly for those who aren’t employed. How do you think about where the onus lies and how much of this risk, are we ultimately putting onto the shoulders of everyday people, as opposed to folks who’ve got bigger balance sheets, who can maybe handle the risk?

Chris Smith:
I think it is a public-private partnership that’s going to be the successful model. I think there’s a place for businesses in that. I think there’s a place for government in that. I’ll give you an example. It’s a little bit different from what you’re asking, but I’m going to talk about our partnership with Team Rubicon, that we just announced, and we made a financial grant, but we’re also offering volunteers.

Team Rubicon is an awesome organization. It’s an organization of veterans focused on disaster relief. They started in 2010, where eight fellow veterans who had left the service, had gone to Haiti to help after the big earthquake there. They went into areas that other relief agencies weren’t. They started with eight, now they’re well over 100,000 volunteers.

We’re partnering with them on getting vaccines into rural and underserved communities. Because for every one person giving out the vaccine, it takes 10 behind the scenes, whether it’s directing traffic or helping with logistics. So this becomes a public-private partnership on multiple angles. You have the government playing an important role of ensuring that vaccines are getting out there. And then you have sites in different states.

But then you have organizations like Team Rubicon who are providing volunteers, to ensure that they have the staff in these locations. Then you have companies like Guardian, and I encourage more companies to get involved with Team Rubicon, who are providing both financial support and also also activating our volunteer network. And we’re activating our dental partners, giving them the opportunity to volunteer with Team Rubicon or our financial representatives.

Because it’s going to take all of us, whether it’s the safety net or the COVID vaccinations, to do our part. And I think both the government and private institutions are going to play an important role for this. Because it’s going to take more than any one area. And I think corporations can play an important role in helping it succeed.

Jennifer Tescher:
I think that’s a great place to end our conversation. Chris Smith, thank you so much for joining me on Emerge Everywhere.

Chris Smith:
Thanks, Jen. Happy to be here.

Jennifer Tescher:
This has been EMERGE Everywhere, a Financial Health Network production. I’m Jennifer Tescher, and I’d love to hear your ideas for future guests and your reactions to the show. You can connect with me on Twitter @JenTescher. If you liked this episode, please review the show and subscribe wherever you get your podcasts. To learn more about the work and research we do, please visit emerge.finhealthnetwork.org. See you next time.