One of the oldest and most-respected leaders within the life insurance industry is Empire Life, a company renowned for its longevity, digital innovations and enhanced communications techniques. Incorporated in 1923, and a subsidiary of E-L Financial Corporation Limited, the business was founded with career agents, but over a period of time moved into what is known as the managing general agent, or brokerage market, where the bulk of the distributors are independent advisors who readily choose to align with Empire Life and their vast array of premier products and services.
The company employs about 950 people from coast to coast, including 650 at its head office in Kingston, Ontario. There are three offices in the Greater Toronto Area, including a satellite location in Burlington. Montreal and Vancouver also have full-service locations with satellite offices in Calgary, Winnipeg, Quebec City and Halifax. The stock market impacts the day-to-day valuation but typically Empire Life adds between $1 billion to $1.5 billion to its portfolio each year and the company, which is 100% Canadian owned, now has just under $18 billion in assets.
Empire Life has experienced tremendous success in the marketplace through product innovation, fair pricing and a solid value proposition for consumers. The company offers a full range of financial products and services that will help build your wealth and protect your financial security.
The Canadian Business Journal recently spoke with Mark Sylvia, President and CEO; Sean Kilburn, Senior VP, Retail; Steve Pong, Senior VP, Group Solutions; and Mike Stocks, VP and Chief Marketing Officer, to discuss Empire Life’s success and its initiatives for the future.
In December, 2017, Empire Life entered into an expanded partnership with Benefits by Design, becoming the primary provider of Life and Disability insurance for BBD’s block. Life and disability insurance provide a solid foundation for group benefits plans—a financial safety net to help protect employees and their loved ones when the unexpected happens.
President and CEO Mark Sylvia says that one of the strategic initiatives that Empire Life put forward a few years ago for the Group side of the business was to expand the business into the third-party administrator (TPA) market.
“We’re quite selective about who we choose as our partners. Benefits by Design was a really big win for us in terms of being the right partner at the right time,” says Sylvia, who credits Steve Pong, SVP Group Solutions, and his team with spearheading the successful initiative from start to finish. Benefits by Design is a mid-sized TPA, national in scope and very prominent in the small to mid-sized market, which is the same marketspace that Empire Life resides.
“We work with them in a deep partnership mode to help develop a program; it’s their program and that’s the key. We’re fortunate enough to now be a partner,” says Pong.
In just a very short period of time it has become quite clear that this has been – and should continue to be – one of the most successful endeavours into the TPA market.
Empire Life recently held a quarterly meeting and it was ascertained that the transition was exceptionally executed with virtually no negative feedback from their customers and advisors.
“The advisors are very happy that they now have Empire Life as the underwriter,” continues Pong.
A vital contributing factor to success is that both sides took considerable preparation time in executing a due diligence plan during the extended courtship as a means of maximizing efficiencies of the partnership.
“We went through an extremely detailed process to identify the types of customers they’re working with now and the types of customers they have the potential to work with that would be suitable for our underwriting template because in these relationships we are taking on risk. We’re not wide open for any type of customer,” explains Sylvia.
A company the size of Empire Life has many opportunities that it can pursue on the market, with an ability to sign a large number of TPAs, but Sylvia and his team are extremely selective in who they take on as partners. The small- to mid-sized market has always served Empire Life extremely well and they go to great efforts to protect their impeccable reputation. It’s engrained in the company’s history and having a razor-sharp focus has always been vital to staying on top.
“It demonstrates our expertise and allows all our collective resources to develop the products and services in that market,” says Pong.
Life and Money Matters
Another exciting development has been the creation of a new, innovative website called Life and Money Matters, which is a project that was spearheaded by Mike Stocks, VP and Chief Marketing Officer. The site provides answers to the most common questions Canadians have at different life stages about money, and helps them connect with a licensed life insurance advisor in their area who can help them with their investment questions and requirements.
“We created Life and Money Matters because we found a need for financial education for the next generation of consumers,” explains Stocks. “We did some consumer research where we tried to understand what the different needs around financial literacy were at different stages of life.”
The executives at Empire Life observed that there was not a high level of understanding about savings and financial planning tools and calculators, particularly with the younger generations. That realization led to a conscious decision to better educate people on the many available options, beyond just the basic insurance needs.
Upon crafting a detailed plan of action, Empire Life created unique personas and videos to help people self-identify and also assembled questions that people in various demographics were asking at different stages of life to help them gain some intrinsic understanding about financial planning.
“Ultimately what we wanted to do was have something for those who had more detailed questions and connect them with a financial advisor,” continues Stocks.
Step One is to have the individuals gain some inherent understanding about insurance and Step Two is to connect them with an advisor. To assist with that initiative the company created a tool called the Advisor Referral Program, which connects clients with advisors.
The website and the in-depth content information posted on its pages have been exceptionally well received over the first 18 months that it’s been available to the public. There have been significant downloads of content by the public and subsequent referrals going out to advisors to connect with them. It’s been a very conscious journey in creating the very best digital tools as a strategic priority of ‘digital first’ and is expected to be one of those landmark building block tools that will stand at the test of time and will be helpful for the changing needs of today’s consumers.
“We’re pleased with the amount of traffic that we’re generating through our marketing initiatives. The whole intent was to help more Canadians to get information,” says Stocks.
Communication through Digital Assets
It’s estimated about 65% of Canadian adults have anywhere from too little to no insurance at all. Additionally, surveys suggest about 69% of all consumers would have trouble paying their critical expenses in less than two months if they were to lose the breadwinner of the family. That is why it is of utmost importance to have an adequate life insurance policy even at a younger age. Being prepared is always the best option.
Sylvia says that some of the opportunities Empire Life is attempting to broaden would include stronger development of strategic alliances with organizations that have large customer bases but may not be in the insurance business.
“The real issue there is getting the word out to consumers because, quite frankly, if people have a choice between playing golf, buying a new shirt or buying insurance, then buying insurance is most often going to be last,” he candidly states.
Sean Kilburn, Senior VP, Retail, echoes the sentiments of Sylvia saying the partnerships that Empire Life wants and needs to establish are those with big brands and large customer bases because their credibility can provide assistance as an endorsement to a strong insurance offering.
“We’ve built a healthy pipeline of companies that we’re working with, both large and small in order to leverage some of the digital assets we’ve built. We can make a simple, fast and easy insurance sale to a customer of a big-brand partner that can get engaged just for a nanosecond and make it easy to fill that insurance need,” says Kilburn.
Empire Life has been investing its premier digital assets on the individual life insurance side for about five years. What that typically does is attract, on average, a lower aged advisor and also younger clientele.
“If we want to engage the younger generation we’ve got to do it in a way that matches the experience they’re having elsewhere, whether it’s Amazon or Apple Pay. However they’re running their lives through their smartphones and we have to build our engagement upon that,” continues Kilburn.
Historically, prospecting in this industry has been cultivated by advisors. The procedure would be to get on the telephone and ask people if they needed life insurance. It was constantly putting the message in front of people. With the financial literacy aspect and using big brands to get the ear of the consumer is where the younger generation will connect with insurers of the future.
“Our advisors don’t call 30-year-olds, we’re calling on their clients,” remarks Kilburn. “We think that the employer groups are another area for this opportunity.”
It’s a challenge the entire industry now faces and Empire Life is addressing it by having the digital asset in order to sit in front of somebody with a good brand and plenty of customer connections.
On the retail side there are currently about 15,000 advisors who had a contract with Empire, of which 4,000 are constantly active in providing new policies. The digital assets attract younger advisors who then sell to younger consumers. There is an undeniable bond between generations.
“We have conferences that are targeted towards the digitally-savvy advisor. We’ve built the digital assets in a way to connect with consumers in a way that is more appropriate in this new world,” says Kilburn.
Products can come with various terms that can be matched off against a customer’s mortgage as example whereas the other main portfolio would be the participating life products. There are products that are geared towards lower costs and higher protection and others that have higher premiums but more expansive values.
“We’re also very strong on the critical illness side and we see particularly with young families whose protection needs is a combination of life insurance and critical illness,” continues Kilburn.
An obvious catalyst in the efficient development of digital assets is technological strength and wherewithal. It’s become the backbone of Empire Life as a means of enhancing communications efforts in the 21st Century. Kilburn says the goal is to have digital assets that make life simple, fast and easy for customers.
“We’ve got a digital experience that is second to none,” he proudly says.
Technology Defines Success
According to Sylvia one of the most important decisions made by the senior executives a few years ago was to start building definitive platforms and a noticeable move away from traditional legacy system approaches.
“The digital technology has allowed us to plug in to other ecosystems and Sean’s department was a leader in this advancement,” he mentions.
Much of the internal success can be credited to the uniformity of human resources from one project to another. Occasionally it is necessary for some people to come in and others go out on certain projects, but for the most part Kilburn and his core team have been together for more than five years, which has allowed them to efficiently build upon the company’s growing digital assets portfolio through their combined historical knowledge and expertise.
“Along with our digital elements, in terms of portals for access for advisors and customers, we are building out over a broad spectrum in terms of both product and service capabilities. It’s all been built through an application programming interface (API) micro-service model,” says Kilburn. “We are laser-focused on what we can do well. We aren’t trying to do everything, but instead want to partner with who we think provide the best individual elements.”
The success of Empire Life can be attributed to experienced, skilled professionals who have the knowledge to execute the fundamentals of the industry and to make the right investments.
“Not only is it executing on the fundamentals but we are also making the right investments. The retail folks have led the way over the past five years and we will make investments in building our digital platform and enhancing our digital footprint in the marketplace,” says Pong.
“We are big enough to serve that will meet the current and evolving needs of our customers but small enough to care,” adds Pong. “We have a tremendous DNA in our people that really care about what we do in supporting customers and advisors.”
In the very competitive world of life insurance Sylvia believes the one critical aspect that differentiates Empire Life from the competition is the commitment to outstanding service. All competitors have access to similar products and pricing models, so that leaves excellent customer service as the main ingredient to success.
“We’re also focused on error reduction, making sure everything is done correctly,” adds Sylvia.
Current Initiatives & Future Plans
Empire Life recently announced the introduction of seven new global funds, a fee-for-service option and a preferred pricing program to provide clients with more global and lower cost investment options within their Guaranteed Investment Fund (GIF) product line of segregated funds.
The new global portfolios are diversified across multiple asset classes and are designed to take advantage of international markets and provide a higher potential return and lower volatility.
The company is also promoting three standalone funds to its Empire Life Guaranteed Investment Funds product line of segregated funds:
Empire Life Global Asset Allocation GIF provides access to a globally diversified portfolio of fixed income and equity investments and is tactically managed for changing market conditions. Amber Sinha, Senior Portfolio Manager, Global Equities is the manager of this fund.
Empire Life Global Smaller Companies GIF is reopened to GIF clients. This fund invests in small to mid-cap companies in North America, Europe and Asia. Amber Sinha continues to manage this fund.
Empire Life Strategic Corporate Bond GIF is a diversified, fixed income portfolio that can help provide protection from rising interest rates and enhanced long-term returns through exposure to corporate fixed income investments, including investment grade corporate bonds, high yield bonds, floating rate loans, convertible bonds, and preferred shares.
The company is also introducing Preferred Pricing for clients with $500,000 in household assets invested in eligible Empire Life GIF products. The program effectively lowers the fund’s cost by reinvesting the management fee credit. All clients are automatically eligible and family members in the same household can combine GIF assets to qualify for the program.
“We know that clients want choice and lower fees. These enhancements build on the success of our popular GIF segregated fund offering by now offering an array of investment product choices to help meet the needs of clients looking to invest either domestically or globally,” says Stocks.
In 2017, Empire Life recorded record yearly earnings and a key reason was the continued growth of the customer base. Insurance companies often fail when they start to decline in their new sales and they don’t shed costs.
“If you take a look at our business as an insurance company we talk about the margins generated by the business itself and that’s really the area of the business you want to grow,” says Sylvia. “You need to price your products appropriately so that when they are sold you have the anticipated margins to cover administrative costs, mortality expenses, any inherent lapses and the investment return that you’re forecasting. Those are the levers that generate profits for an insurance company. You have to constantly monitor where you are versus where you expected to be and then make adjustments as necessary.”
“In terms of a qualitative measure we have a vision and mission to be the most convenient financial services company in Canada,” says Pong.
From Kilburn’s perspective, he wants to continue to validate that Empire Life has hit that magic overlap of phenomenal digital assets that deliver simple, fast and easy for the clients and advisors who want it ‘one and done’ with the overlay of the empathy to carry people when they are in search of financial advice.
“The magic is in that combination. If we do that, then it will handle all the numbers that we want to achieve,” notes Kilburn.
The value proposition that Empire Life provide to the advisors and their customers is clear according to Sylvia.
“We’re going to have good products and live up to expectations,” concludes Sylvia. “We don’t need to double in size, but if we add 20% to our customer base in retail and Group by 2020, I would be ecstatic.”
The skilled professionals at Empire Life are always ready and able to do virtually all the leg work and devise a best-laid financial plan for each individual situation. Engaging them to work on your behalf could be the best move you’ll ever make towards maximizing your own financial security both now and in the future.