Yahoo Finance Presents: MassMutual Chairman & CEO Roger Crandall

MassMutual Chairman & CEO Roger Crandall joins Yahoo Finance's Alexis Christoforous to discuss the increase in life insurance business the company has seen during COVID-19 as well as their return to office strategy.

Video Transcript


ALEXIS CHRISTOFOUROS: Welcome to "Yahoo Finance Presents." I'm Alexis Christofouros. And I'm joined today by Roger Crandall, CEO of MassMutual, one of the largest life insurers in the country. Roger, it's good to see you. Thanks for being with us.

ROGER CRANDALL: Thank you for having me.

ALEXIS CHRISTOFOUROS: So the COVID-19 pandemic has certainly changed a lot of things, including how we view life insurance. And I want to start by sharing a statistic with our audience because I found it to be pretty eye-opening.

Sales of life insurance policies were up in the first quarter 11%. That's the biggest gain we've seen in some 40 years. And people of all ages and income levels are buying these policies. What kind of trends are you seeing with regards to life insurance policies at MassMutual?

ROGER CRANDALL: Yeah, absolutely. The interest in life insurance is up. I mean, COVID certainly got people thinking about the need for life insurance and protecting their family. So at MassMutual, I'm really happy to say we're seeing sales even stronger than that. We were up well over 20% in the first quarter.

So again, life insurance is not something that most people think about. But we know that there's about 100 million Americans who don't have life insurance or who have it in tell us in surveys that they know they need more. Everyone wants to protect their families. And for MassMutual, as the name implies, we're a mutual company. We're effectively owned by our policyholders.

So way back in 1851 here in Springfield, 31 people put some money together, started selling policies to friends and neighbors. And now we have 5 million friends and neighbors and $29 billion of capital above and beyond the reserves for those policies. So MassMutual's been growing. And it's been one of the-- it's horrible to look for positive things in a pandemic. But people recognizing how life insurance can help their families has certainly been a good one.

ALEXIS CHRISTOFOUROS: And you look at the numbers. Nearly 1/3 of consumers say that COVID-19 has made it more likely that they'll purchase life insurance in the next 12 months. Talk to me about the kinds of people who are doing this because you think life insurance, you think sometimes, well, older folks, wealthier folks are buying into these policies. But you're seeing that even Millennials-- I think something like 45% of Millennials say they either have it or want to buy life insurance in the not too distant future.

ROGER CRANDALL: Yeah, we're actually seeing one of the strongest growth segments is Millennials. And again, we think that's really positive. One of the things we've been doing is investing heavily in technology to make it easier to buy life insurance, particularly going through the underwriting process.

With fully underwritten insurance, you're able to give people the lowest possible cost of insurance. But the days of having a paramedic show up at your house, in some cases, with a scale to start the process. And it goes downhill from there from a consumer perspective. Although you might have to do that for some large policies and people who've have historical health issues, increasingly, we're able to use machine underwriting to get people through an underwriting process very quickly, issue policies very quickly. And that just makes the whole buying process better, both for consumers and for agents who frequently are working with customers to help them understand what their insurance needs are.

ALEXIS CHRISTOFOUROS: You bring up a good point because I was curious how you would assess someone's health risks, especially during a once in a lifetime pandemic. Are you asking to see COVID-19 tests? Are you asking folks if they've had COVID? And what are you doing with regard to that.

ROGER CRANDALL: Yeah, so remember, our business has always been one around trust, where our policy owners and the owners of the company share sensitive health information with us. And we use it just for the purposes given to us, which is to put them in the best risk class to give them the lowest kind of price of insurance.

So we do ask a series of health questions. What's great now is, again, particularly for younger, healthier folks, we don't have to do that. We don't do that on paper. We can do it just on an app. We can have the underwriting be happening literally as that app is getting taken. And we can then issue a policy immediately.

So we built a fully digital platform. We haven't just digitized an analog process. We've built a brand new, effectively digital insurance company. And that's been an important thing. And the uptake on that accelerated dramatically during the pandemic in 2020.

Change management is always one of the big challenges for any industry, especially one that has established ways of doing business. The pandemic actually got people to accept change.

ALEXIS CHRISTOFOUROS: Well, that's a good thing, certainly. I want to ask you about another trend we're seeing because as the number of policies sold climbed, we saw the average death benefit actually shrink by about 4% to $270,000. What's your takeaway from that? What does that tell you?

ROGER CRANDALL: I think it's great. I think it's a realization that everybody has that they need some life insurance. Life insurance is not just for the wealthy. In fact, the history of life insurance in the United States is really one of all of America buying life insurance.

Our oldest policyholder today is 103 years old. She's had her policy 93 years. So it's a very long-term product, permanent life insurance. So I think it's absolutely fabulous that we're seeing Millennials buy policies, that we're seeing policy sizes trend down. That just means more Americans are making sure their loved ones will be protected if something happens to them. And that's just awesome.

ALEXIS CHRISTOFOUROS: It's pretty common for a number of people to get their life insurance policies, albeit perhaps small ones, from their employers. And because this pandemic has upended a lot of people's work situations, how has that impacted life insurance from the workplace?

ROGER CRANDALL: Yeah. I mean, look, there's been a long-term trend of fewer Americans working for big companies. That's one trend that's been in place. And then we've seen fewer of those companies offer life insurance as a benefit.

So while I think it's great that people have the opportunity to get life insurance at work, and I'd definitely encourage you to take advantage of that if you have it, you also should recognize that that policy is not individually underwritten, so particularly as you get older, that pricing, you may be able to get, frankly, a lower cost policy by getting underwritten yourself.

So again, I think it's great that Americans get coverage at work. But we do know, with the economy becoming more self-employed people, the explosion of gig workers, for example, small companies that might not offer that benefit, more Americans than ever before aren't getting coverage at work. And that's where making it easy for them to buy coverage from us through an agent or directly from MassMutual is really important.

ALEXIS CHRISTOFOUROS: Roger, we have nearly half the US now vaccinated or at least having one dose of the COVID-19 vaccination. And so more and more companies are calling workers back to the office. What does the return to the office look like for you there at MassMutual?

ROGER CRANDALL: Yeah. So we're excited. We're having people come back to work in the office starting next Monday. And what we did is we said to folks, if you're interested in coming in, if you're vaccinated, please come in. And we're going to really take kind of a crawl, walk, run approach here.

So we have about 1,000 of our 6,000 employees that told us they'd like to come in. Most of them want to come in just a couple of days a week to start. So that's great. We're going to get the cobwebs out of the building, so to speak. It's been shut down for a while. Make sure that, among other things, the internet works.

And we think we're going to be in a hybrid work environment. We think it's really critical to be mindful that people are going to work the way they want to work. We've all learned different ways. So I'm sitting in an office right now that has large TVs that are Zoom-enabled. So we would be able to have a meeting with people in different locations, either other offices of ours or people that are remote and people in the office.

So we're excited to have some folks start to come back in. And we're going to see how that goes and decide where we go from there.

ALEXIS CHRISTOFOUROS: So you mentioned, if you're vaccinated and you want to come in, you can come in. What if an employee is not vaccinated? What are you asking of them?

ROGER CRANDALL: Yeah. If an employee is an essential worker-- because we have had a few hundred people who have been in all the way through-- if they haven't been vaccinated, we're going to ask them to continue to wear a mask. So that's the approach we're taking there.

And some folks are saying the companies are looking for people to upload their COVID vaccine certificates. And we trust our people. We treat them like grown-ups. If you come in and you're not wearing a mask, that means you're telling us that you've been vaccinated. And that's good enough.

ALEXIS CHRISTOFOUROS: For those who would be wearing a mask, are you going to be offering any sort of antigen test to just to sort of test them on an ongoing basis or no?

ROGER CRANDALL: We're not planning on doing that at this point. But one of the great things about what we're doing this summer, where again, we've got about 1,000 of 6,000 who've said they were interested in starting to come in. And again, the vast majority of them said they wanted to come in one or two days a week.

It's going to give us the opportunity to kind of see how that goes. But at this point, we're not going to do the antigen tests.

ALEXIS CHRISTOFOUROS: I know before the pandemic, about three years ago, you had announced some big plans for expansion. You were going to build out a new campus in Boston. It was part of a $300 million investment. You were going to increase your footprint in New York City. How has the pandemic changed those plans?

ROGER CRANDALL: Well, OK. I just did a walk through the building. And we're on track to open this fall. It's spectacular. It's going to be a great space. It is set up to be a very open, collaborative space, which we think is still the best way for people to work. So I think we're going to have a great building in Boston.

And frankly, we're growing in New York City as well. So it's very difficult, I think sometimes, when you're in the middle of something like this to see how it's going to play out over a longer period of time. But we think people inherently do want to get together. I mean, it does not necessarily mean they're going to be in the office from 8:00 to 5:00 every day, five days a week. But teams coming together to be able to share information in a real time basis, to really work through complex problems, we think in-person meetings are going to be a key to doing that successfully.

So super-excited about our new space. And we'll be having people there in the fall.

ALEXIS CHRISTOFOUROS: Yeah. And it's going to be a big boon there to the Boston Seaport. So curious, you're not shrinking your physical footprint at all post the pandemic or as we move now more towards hybrid working?

ROGER CRANDALL: No, we haven't done that. Our office here in Springfield is a large office. We built the first campus here in 1921. So we're pretty established here in Springfield. I think we need to really see how work evolves before we would make decisions like that. So we have not our footprint at this point.

ALEXIS CHRISTOFOUROS: All right, Roger Crandall, CEO of MassMutual. Thanks for spending some time with us here at Yahoo Finance.

ROGER CRANDALL: All right. Great to see you again. Thank you very much for having me today.