Tim Heslin began his life insurance career by pricing term life insurance. He’s worked his way up the ladder at AIG over the past 20 years, holding a wide variety of titles that prepared him to become Corebridge Financial’s president of life insurance.
Corebridge Financial was formed as a rebrand of AIG’s life and retirement subsidiary in 2021. AIG took Corebridge public in September 2022, raising $1.7 billion in an initial public offering.
Video highlights of the interview.
As head of product, pricing and underwriting at AIG, Heslin championed noninvasive underwriting approaches and automation to make it easier for people to purchase life insurance. He continues this drive in his present role, emphasizing the need to use the latest technology to make obtaining life insurance quick and easy. Younger consumers, Heslin said, “are used to buying with one click online. They’re not going to wait 30 days.” Corebridge must “meet these customers where they want to be met,” he said.
In this interview with Publisher Paul Feldman, Heslin also discusses indexed universal life illustrations, artificial intelligence and meeting the needs of the “one-click consumer.”
Paul Feldman: Tell me a little bit about how you got into the industry.
Tim Heslin: I’ve been in the industry for over a couple of decades now. I came to what was known as American General at the time before AIG purchased it, and I was pricing term life insurance. That helped me understand the baseline economics of the business but didn’t give me the commercial side until I moved into product management. There, I got to work closely with our distribution partners to understand the business: how it’s sold, why it’s sold. And it helped me with the passion that I always had for this business, because I think it serves a very noble cause: We help provide financial security to millions of families. I then had the opportunity to run our international businesses to get diversity of perspective and bring that back to the U.S.
Feldman: How is the transition from AIG to Corebridge Financial going?
Heslin: It’s going great. American General was bought by AIG back in 2001, and we transitioned to AIG and have been a proud part of AIG for a number of years. There was a decision to IPO AIG’s life and retirement business. It was a great business and had great value to stand on its own. We IPO’d on Sept. 15, 2022, and we’ve been working to separate from AIG over the past year or so.
And from a branding perspective, we have already been marketing the new brand since the day that we IPO’d. So that is very much in progress, and we’re running our business today as Corebridge Financial.
Feldman: Life insurance is one of the most important things that people can buy, yet there’s a huge coverage gap in the marketplace. How can the industry address that gap?
Heslin: Paul, great question. On the coverage gap, it’s two sides of the coin. One side is there are not enough people who have coverage. On the other side, there’s a tremendous opportunity for those of us in the life insurance market to help people obtain more coverage.
We must change the process of acquiring insurance. It’s a decades-old process. What’s exciting is that we’re at a point where technology can be used to improve the overall process. It can look much more contemporary; it can be much more streamlined.
What excites me is that we are paving new roads for customer acquisition. We have a platform that we call SimpliNow Choice, which is a fully digitized end-to-end process that allows you to buy term insurance online. What excites me about that is this reduced time frame to obtain your coverage. What we have seen is that when you reduce that time frame to obtain your coverage, more people will buy.
I think one of the newest opportunities there is from the younger generations — Gen Z, the millennials — but we must change the process to acquire insurance.
These individuals are used to buying with one click online; they’re not going to wait 30 days. This new technology will help us meet these customers where they want to be met and should open opportunities for more people to have access to the financial security that our products provide.
Feldman: I know you’ve been working to make investments in improving service and getting policies issued. What would you tell an agent who hasn’t done business with you because they’ve had issues in the past?
Heslin: The one thing I would say is we fully understood what the issues were when they came up. We put a team on that immediately and set up a 30-, 60-, 90-day plan to address those concerns. And what we can see on our end is that the plan is working, the process has improved. And so, we think if someone hasn’t used us or hasn’t looked at us recently, the process has definitely improved. We have some of these new processes on the market, like SimpliNow Choice. And with that combination, I think now is the time to come back to Corebridge Financial and try us. We think you will like the experience.
Feldman: What are some of the benefits that Corebridge Financial offers that other companies don’t?
Heslin: We have a diverse product set at Corebridge Financial. It ranges all the way from term to indexed universal life insurance. A lot of carriers in the industry offer 10-, 15-, 20- and 30-year terms. Well, what if you don’t need a 10-, 15-, 20- or 30-year term? What if you need something in between? Maybe you’re 48 years old and you’re buying life insurance to last until retirement. Twenty-year may not fit. So, we have coverage options that go every year from 15 to 30. And that allows someone to customize their term of insurance to fit the plan exactly as they need.
I would say one of the biggest things on our indexed universal life side is we build products that are designed to perform in different economic cycles. What sometimes you can see is a product that might do really well in the current economic cycle, but if you shock it, it doesn’t perform as well. We want to build products that drive the maximum value across different economic scenarios for our customers.
Feldman: American General was one of the first companies to come out with an IUL, correct?
Heslin: Right, we were. The IUL launch predates my tenure with the company. I joined in 1999. We saw IUL as a great product before a lot of other people saw it as a great product. We built the expertise in that line of business, having been in it for more than 25 years. And so, because of that, we think it gives us an edge over some of the other competitors when it comes to designing our products, knowing how they perform historically, and setting appropriate cap and par rates that will be able to stand the test of time.
So with that, we’re driving huge value for our customers. And the financial professionals we work with every day see that, as we’re one of the leading companies selling that product in the marketplace.
Feldman: IUL has come a long way. It was just a side note for a while and now it’s the No. 1 universal life product.
Heslin: Right. It adds tremendous value for the end consumer because the fundamental premise of an IUL is you get the upside participation in the equity markets without the downside risk that you have in a VUL [variable universal life] contract with the floor that’s in there. And that was an extremely attractive product in the economic environment where the stock market has been relatively volatile and historically the interest rates have been low. But fast-forward to today, when interest rates are a little bit higher, the equity markets are still a little bit bumpy, and we’re able to take some of that extra interest rate that we have in the base pricing and create even more value for customers.
What you’ve seen is a lot of cool innovations on the IUL side, new indices coming into the market to give individuals choices. That’s why it’s become the premier product in the industry.
Feldman: What kind of movements is Corebridge Financial making on the different indices? Are there others that you’re working with?
Heslin: We’ve made several index choices over the years. We were a pioneer, and it was just S&P 500 back then. We’ve had multiple index options — they’re called rainbow options — that gave you exposure to worldwide indices.
What we’ve moved to today is S&P index options, and then we’ll have cap and par on these options because we want people to have the choice of whatever type of investment style that they have. But something else that’s become very popular in the market today are what’s called volatility control indices. That allows someone to participate, but maybe without quite the volatility you might get with an S&P option.
We tend to see that people might mix and match these options within a contract. Maybe they put half their money into an S&P option and the other half of their money into a volatility control option to create a little bit of a hedge and diversification within the product. That’s where the market has gone, giving people more options inside of their IUL contracts. I think that’s another reason that there has been such a surge in sales for that product line.
Feldman: It’s amazing how the products evolved over the years. How important are volatility controls?
Heslin: It depends on the individual. If someone is more risk averse, then volatility controls are a great option for an individual because they put a cap on that volatility within the marketplace. And so, with that, you may not get as many of the larger swings, up or down. You can have a more stable return within your IUL contract. Generally speaking, people who are a little bit more risk averseare going into an IUL contract compared to a VUL contract. That can be a great option for those who might even be further toward the end of the spectrum toward risk aversion. But then in addition, those who want to take a little bit more risk can go to an IUL with S&P participation and potentially have more upside in a given year.
Some people will actually take their entire portfolio and allocate it to one or the other, but we see a lot of people split it. They might allocate, let’s say, half into the S&P 500 account and then the other half into the volatility control account. It just depends on the circumstances of the individual. This is where working with a financial professional or agent, particularly on these more complex products, helps, because life insurance can be difficult to understand for the customer. For that reason, working with a financial professional, understanding the insurance, understanding the options, getting some recommendations about the right product for you, is really important as you’re buying that contract.
Feldman: How do you see AI affecting product design and underwriting, service, and everything in between?
Heslin: We have used AI in actuarial science for several years. It’s what I would call more traditional AI, like regression-type work and things like that. I’m just amazed about how smart generative AI has become in the period of a year. There is a lot of potential with this, and it’s extremely exciting.
I think for our business, underwriting will be the first place generative AI will be used. There’s a lot of data that goes into the underwriting, and you need data to make these models work. So with that, you can build a data set relatively quickly, particularly if you’re issuing a lot of policies like we are at Corebridge Financial. You can bring that in and create an engine that will then be able to automatically underwrite your policies. That’s where we are today. We leverage AI. As of March 31 of this year,more than 60% of our policies were auto-decisioned with the help of algorithms.
We are a highly regulated industry, and so we need to make sure we do this right. There have been regulations that have come out, most recently from the state of Colorado, and we’ve built our program with an understanding of where we thought the regulatory bodies were going to go, because we wanted to do it the right way. And so I feel very proud of the way we’ve built our program with a focus on treating customers fairly and that we can feel comfortable with the outcomes that are coming from the model.
Feldman: Let’s talk about this Colorado model for AI regulation. Tell me about that.
Heslin: OK. So, Colorado — they’ve been talking with industry for quite some time now because they wanted to see regulation around the utilization of AI, in particular focusing on preventing unfair discrimination against protected classes. And so what Colorado did is they have outlined governance and documentation that they want to see in these programs. And companies that are using AI will have to report on their progress in designing compliance with the regulation, indicating how they’re using AI, the governance and controls they have wrapped around it. And they have also proposed a testing component to help evaluate potential unfair discrimination through AI.
Feldman: We talked about AI from a carrier perspective. How do you see it from an agent’s perspective? Is AI affecting or enhancing the agent’s business?
Heslin: From an agent’s perspective, I think AI gets to this speed and technology and process that they can leverage to transform their business. Time today might be spent on paperwork or getting an underwriting approval. That approval could take 30 days, but if we can scale that down to 30 minutes, agents can transform their practice to more of a selling/recruiting-type basis to help more people become secure and have the financial security that our products provide. I think that’s what’s going to transform the business from an agent perspective.
Feldman: What new areas has Corebridge moved into?
Heslin: About five years ago, we got into a senior market segment that focuses on final expense insurance. It’s historically been an underserved marketplace, and it’s relatively new to us, so I think there’s a lot of room for growth compared to some of the more mature channels that we work through. And particularly as more and more Americans are turning 65 every day, that market has become large and ripe for those types of sales, so it’s something that we’re very bullish on.
Feldman: Regulation is always a concern in this industry. Recently, there has been a lot of talk about IUL illustrations. What are your thoughts on those?
Heslin: IUL has gone through several iterations of illustration changes because there were some designs in the industry that didn’t necessarily fit well within the current regulation. At Corebridge Financial, our IULs are designed to perform in all markets, so we were not largely impacted by any of the changes in the regulation. We were able to keep our products as is. What we’ve seen, through the iterations of regulation change, is that the marketplace has come back closer to where we’ve always been, because we held steadfast in the value that our products bring to our customer. We see it as an opportunity for us to sell more in the marketplace with the regulation changes. We’ve been very pro-changes. We think it helps consumer understanding of products. And in the end, everyone will be happier if there are no surprises.
It’s important to stress-test your illustration because there can be what I would call the baseline assumption that just comes out of the regular system. It’s a good idea to ask your financial professional to run it at an alternate rate. Maybe if it were six, cut it down to four — something that’s materially different so you can understand how the product performs in that different scenario and see if there’s maybe more risk or you’re comfortable with the risk. If it weren’t to perform at that higher level and it performed with something less, what does that do to your product? And is it still meeting the needs that you have?
The one thing we know is the exact illustration is not what will happen in reality. Being better prepared under alternate scenarios is what will make sure customers are satisfied in the long run.
Feldman: If you could give an agent any advice today, what would you tell them?
Heslin: I would say the industry is changing. Technology is coming. Technology will make the process better and easier. Embrace technology. Learn how to use it. It will benefit your agency. And with that, think of all the benefits that it brings to your customer base. You’ll be able to service more customers, which is great. More people will have protection, and that’s what we’re all here to do. It’s about securing families, making sure they’re financially protected if an unfortunate outcome occurs for them.