Everyone agrees that life insurance is a critically important aspect in our lives and yet it’s estimated as many as 65% of Canadian adults have anywhere from too little to no insurance at all. A common excuse is that it takes too much time and effort, but the truth is there are skilled professionals whose extensive expertise has them ready and able to do virtually all the leg work and devise a best-laid plan for each individual situation.
One of the most-respected leaders within this industry is Empire Life, a company renowned for its longevity, digital innovations and enhanced communications techniques. Incorporated in 1923, the business was founded with career agents, but over a period of time it moved into what’s 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 products and services.
With headquarters in Kingston, Ontario, Empire Life employs more than 900 people in addition to another 1,500 advisors with whom the company has a working relationship. Assets under management have surpassed $15 billion with total annual insurance and fees revenue exceeding $1 billion, making it one of the most prodigious and successful life insurance and financial services companies in the country. In addition to Kingston, there are offices in Toronto, Montreal, Vancouver as well as a number of satellite locations.
The company provides individual life, health and investment products as well as group life and health products through independent distribution partners including financial advisors, management general agents, national account firms and employee benefit producers. The aim is to make the process of acquiring life insurance simple, fast and easy for Canadians to build wealth, generate income and acquire the insurance coverage they need.
The Canadian Business Journal recently spoke with three senior executives at Empire Life: President Mark Sylvia; Senior VP, Retail Sean Kilburn; and Mike Stocks, VP and Chief Marketing Officer to discuss the company’s successful run of 93 years and counting. Empire Life has a group of advisors who are a part of the legacy of a long career system who remain strong supporters. They also deal with national distribution organizations who offer insurance products from various companies, including bank-owned securities dealers and other national organizations.
From a distribution standpoint, Empire Life offers numerous methods to reach consumers but it’s always through advisors who have a choice of products from different companies that they can offer to their clients.
“Empire Life wins its business in the marketplace through product innovation, fair pricing and a solid value proposition for consumers,” Mark Sylvia begins. “We offer investment-related products, life insurance for consumers and we also sell employee benefit programs.”
The middle-income Canadian is Empire Life’s target consumer in the retail consumer products space and their primary client base in the group business is small enterprise, which would be defined as organizations with less than 200 employees.
“We have a strong market-share in that part of the business,” Sylvia confirms. “We are not going after large employer groups.”
The targeted approach has proven to be the optimal route. Oftentimes there are substantive differentiating requirements between companies that have two to 20 employees versus others that have 21 to 50 and those in the 51 to 200 employee category. Sylvia and his professional staff endeavour to accommodate each of those segments in order to deliver the very best results.
“The person managing a small employer group with 10 employees is doing the employee benefits off the side of their desk with other core responsibilities that require daily attention. We’ve designed products and services and levels of support that cater to helping those smaller employers to put the program in place. As the employer size grows the level of services that we need to provide changes dramatically,” Sylvia says.
On the retail side there are about 15,000 advisors who have a contract with Empire Life, of which about 4,000 are constantly active in providing new policies. Retail encompasses individual insurance operations and wealth management or investment operations. Without doubt, technology is the single-biggest communications factor that impacts not only Empire Life but the entire industry as a whole.
“Back in 2013 is when we really started to invest heavily in a digital end-to-end sales process for our life insurance products,” Sean Kilburn says. “It’s a process we’ve called ‘Fast and Full’ which allows the advisor to have a completely digital experience with a consumer either in their office or non-face-to-face. It’s a process that has evolved. I think we’re up to 1,600 enhancements to that process all based on removing the pain points from the existing paper-based insurance sales process. Now, more than three years later, we have arguably one of the best electronic sales processes for insurance in Canada.”
The executive management team at Empire Life has incorporated procedural enhancements to many large-scale initiatives while partnering with the very best companies whether it’s for such things as digital signatures or electronic payments. It was never an intent to develop everything alone, but rather to partner with companies that had established industry standards in these various areas, which would lead to assembling a seamless process for the advisor and the consumer.
Engaging Younger People
In the wide world of potential consumers there are different generational divides with baby boomers, generation X and generation Y – also known as millennials. Each generation is at different points in their lifecycles, and the way they react to – and use – technology often cuts across far different lines. A sizable number of baby boomers are tech savvy but their preference is still most often to speak directly with an advisor. However, statistics reveal the next generations first tend to go through a process of conducting research on their own. Once ready, they most often select online avenues to determine how they want to proceed from there.
“It’s important to have the right technology in place so people can interact with us in a comfortable manner,” Sylvia says. “The one thing we did differently from many other companies is we made ours a dual purpose system. Not only could the customer be comfortable using it but the advisors as well.”
Preferences and engagement patterns of younger people is closely monitored at Empire Life. Data provided by the Life Insurance Marketing and Research Association includes regular surveys of life insurance ownership in Canada and one of the alarming trends over the past seven years is that there has been a 12% drop in the number of Canadians that own life insurance.
“When we saw that trend developing one of the things we said was that we needed to understand why it was happening,” says Mike Stocks. “When those consumers replied to the question of why they hadn’t considered life insurance we found there were two consistent answers that haven’t really changed over time. One is that they have other financial priorities and the other is that it’s too expensive.”
Data reveals that it’s not easy to engage the younger generation due to a variety of reasons such as them feeling they are not yet at a stage where they think about dying, so the topic gets overlooked altogether. Stocks says a great deal of time and effort has gone into promoting the digital approach in order to better engage Gen-X and Gen-Y, which will lead to better understanding and wiser decision making on their part.
One initiative in particular that has delivered tremendous engagement with the younger generation is an advertising campaign called The Dumbest Way to Die is Without Life Insurance™. Empire Life wound up partnering with a company from Australia and from that relationship YouTube videos were produced that garnered more than 1 million views in a 12-month period. The animated 30-second videos are incredibly captivating and serve as an excellent introduction to life insurance by taking a more light-hearted approach to the topic, while still getting the core messaging across. From there, interested parties are able to visit Empire Life’s website to become better educated on why it is so crucial to take action. It’s all part of the ongoing digital transformation in order to reach a wider segment of the next generation, and it’s a campaign that has been working remarkably well.
Amendments to the Income Tax Act have altered the rules governing what qualifies as a tax-exempt insurance policy and how much money may accumulate in it. This new legislation comes into effect on January 1, 2017 and impacts life insurance companies across Canada in one way or another.
“We’ve taken this as an opportunity to really look at our portfolio and ensure we have the products that are very well-suited to consumers’ needs,” Kilburn says. “There has been the introduction of two participating whole life products, which we see as foundational to both millennials and older Canadians’ insurance needs.”
Empire Life has also done a revamp of its term insurance marketplace and critical lift offerings.
“While we were going through the review of our products we wanted to find how we could best differentiate our product portfolio in order to meet the most targeted consumer needs,” Stocks says. “We took the opportunity to move our portfolio in a direction to where we thought the changing needs of today’s consumer were going to be best served with these products.”
Empire Life’s EstateMax product was launched just over a year ago and has been one of the fastest-growing whole life products in the entire Canadian marketplace. It is a permanent participating life insurance plan designed for a variety of estate planning needs with a focus on long-term cash values.
Optimax is a permanent participating life insurance plan that provides cost effective life insurance protection and the benefit of tax deferred savings accumulation. Optimax is being repositioned due to the aforementioned policyholder taxation changes and being replaced with Optimax Wealth.
“We’ll have two par products that are focused on different elements within the whole life market to meet different target consumer needs,” Stocks explains. “Those can either be age-based or need-based. One is focused on needs within a 20-year period and the other is focused on needs beyond a 20-year period.”
Solution ART is a new product to Empire Life’s term portfolio that provides a low-cost entry into the marketplace. For those who don’t have insurance coverage it will be the most affordable option for short-term needs. It also provides consumers with a conversion option when they are ready to move into a longer-term product. There is also CI Protect Plus, a critical illness plan designed to cover all common covered conditions on the market, and which may be added to any life plan.
“Our new CI Protect will be an extension of a product that we launched earlier this year and has been gaining great traction with consumers. One will be based on life underwriting. It’s a very easy and convenient application process. The other will be based on health underwriting, which is a comprehensive critical illness product,” Stocks says.
Professionals Who Make a Difference
It is often said that a company is only as good as its employees, and Empire Life goes out of its way to ensure that each of their hires is the right fit for the business. With so many different skillsets required to achieve maximum efficiency across the board, selecting the proper personnel is absolutely essential.
“The first thing we look for is somebody who is curious,” Sylvia says. “There are limitless opportunities for someone with curiosity. We also want people to have the drive to succeed in an environment where we’re all succeeding together. All parts of the company have to coalesce in order to be successful.”
The life insurance business has become much more complex with enhancements in technology constantly being ushered in. There is also much more science being provided to the customer and as a result you need a dedicated team to carry that out.
“One of the things that I always look for when I’m hiring is people who like to take initiative. We want solution finders. It’s easy to find problems but what we look for is finding people who take it a step further and try to find solutions to those problems. I’m happy to say that Empire Life has many solution finders who are not just finding problems but providing solutions to them,” Stocks says.
A notable trait with Empire Life is the impressive number of long-tenured employees. In fact, when employees reach milestones beyond five years, a personalized letter signed by Mark Sylvia is sent out to them from the company thanking them for their contributions. It’s that kind of interaction and acknowledgment that makes each and every employee feel as if they are an important part of the team and contributing to the company’s successes in a meaningful way.
One of the biggest challenges facing companies is whether they want to be driven by numbers. Achieving x-percent growth per year is a strategy that Sylvia believes can be somewhat blinding of the fundamental goals and aspirations of an organization, especially without taking due consideration for other core factors.
“Our main goal is to continue to increase the base of customers that we serve,” Sylvia says. “If you focus on that and try to acquire and develop new customer relationships and service the clients you have, the other aspects will take care of themselves.”
Understanding what consumers want in terms of interaction and the methods for buying the various products and services is more of a strategic-level goal for Empire Life according to Sylvia. “If we do that right and find ways to get to the consumer so they can learn about our products and acquire them through our distribution, and we have products that are serving the client needs well, the company will grow.”
Sylvia, Kilburn and Stocks all agree that in order to achieve maximum success the company must always be at the front end of the curve and continue to adapt to the changing needs of consumers. Advice and knowledge of the industry will always be the cornerstones, but now technology has become an integral part of that equation because it represents how communication will expand in the future.
“Technology is certainly an area that I’m passionate about and I’m excited that our company has embraced digital to the extent that it has to this point. We’ve begun the journey and I’m excited about where that journey is going to take us three to four years down the road,” Stocks says.
While a substantive part of Empire Life’s planning will have aspirational targets, Kilburn says they don’t tend to focus as much on that as opposed to the enablers that will get them there in terms of low-cost straight-through processing. “We’ve definitely taken a modular approach, which allows us to plug and play where there’s industry-best players but as those players change – as processes get redefined – it allows us to work in almost a service-call environment, which also allows us to integrate into partners that either have large digital customer bases or have unique positioning in the whole digital food-chain.”
A call to action that Empire Life has undertaken is to spend time and resources to make it easier for millennials to want to reach out to seek professional advice by driving them to the website. In fact two-thirds of all visitors to the website have been clicking on the “Find an Advisor” button. As of now, about 250 advisors that have signed up for advisor referral program from all parts of Canada, which allows Empire Life to connect consumers visiting the website with one of their qualified advisors.
Empire Life continues to focus on its long-term partnerships and commitments with distribution partners while leveraging innovative technology to assist them in meeting the needs and expectations of consumers now and in the future. Insurance is something everyone should – and could – have. The choice is yours.