‘Unretiring’ CEO leads F&G to growth — With Chris Blunt

F&G CEO Chris Blunt started his career as a financial advisor with Shearson Lehman Brothers. (“If you remember that name, you’re old,” he said.) He eventually obtained an MBA at the Wharton School. He joined New York Life in 2007 and went on to become Investments Group president in 2015. “I spent 10 years there in different roles overseeing life and annuity, and asset management. It was really a great opportunity. I learned a lot and just really came to love the insurance business,” he said.

Blunt retired in 2017, but then decided he missed what he loved doing best: leading a team and a company to success. He “unretired” in 2018  to become CEO of Blackstone Insurance Solutions. “I went to Blackstone to help them set up their insurance solutions business” and then on to F&G as CEO, where he is “just wrapping up my fifth year.”

In this interview with publisher Paul Feldman, Blunt describes how he believes the company’s future “is pretty unlimited.”

Paul Feldman: F&G has had an amazing year. Why did it go so well?

Chris Blunt: I would say it’s the culmination of several years of laying the foundation around building out our distribution, adding products, having employees who are fired up and making some technology investments. And we’re in the sixth year of our investment partnership with Blackstone. All of that seems to be coming together during a period that’s a great environment for fixed annuities. Volatility is our friend, and you’re seeing advisors embrace volatility in a way that I think they haven’t done in the past.

Feldman: Blackstone has been a big part of F&G’s success. Is that helping free up some assets? How is that working out?

Blunt: Blackstone has been involved since November 2017. The partnership has done a great job of expanding the menu of opportunities for us. Blackstone doesn’t own F&G or have any ownership stake or say in the carrier.  What we do outsource to them — and they’ve done a fantastic job of it — is picking underlying investments. We get to leverage several hundred talented credit professionals, structuring experts, dealmakers. For us, it has been a great model and the results have been exemplary in terms of getting incremental yield while bringing down the portfolio’s overall credit risk.

Feldman: Fixed indexed annuities are a big part of F&G’s sales, but life insurance sales have been growing for your company as well. Tell me about that.

Blunt: I love our life business; it’s been growing exponentially. When I first joined the company, we were doing less than $30 million of recurring premium and now we’re doing about $160 million, and we’re on our way to $200-plus million of recurring premium. Part of the reason for that is we play in the middle markets, where there are young families and a lot of rapid growth. Our only product is indexed universal life, but we think we’re quite good at it and have delivered good results there. It’s a great business for us and one where we see continued growth.

Feldman: For one product, that’s a lot of business.

Blunt: Yes, it is. And again, I come back to the fact that it’s a classic middle-market solution. We call it the ultimate Swiss Army knife. It has some death benefit protection, some savings component and, as you know, living benefits are increasingly important, particularly in the middle market, where there are only so many dollars that can go toward premiums and protection. You want to get as much bang for your buck as possible.

Feldman: You talked a little bit about technology. Has technology been a part of the growth at F&G, and where do you see that going?

Blunt: Technology has been a big part of our growth. We tagged our strategy with the acronym “GEM,” which stands for grow, engage and modernize. The grow part is obvious. We’ve grown our distribution channels, we’ve grown our product suite, we’re getting ready to launch into the registered index-linked annuity space. We’ve increased our investment options through our partnership with Blackstone. 

The “E” is about engaging.  The “M” has been about modernizing how we work. And for us, that has consisted of some significant investments in technology. When we were acquired by Fidelity National Financial in June 2020, they were incredibly supportive. Their whole model has been scaling up the title insurance industry and using technology effectively. We took a page from that playbook and made some significant investments in technology around workflow and different operating platforms, and we think it has had a real impact.

Feldman: It’s amazing that there are still so many paper applications around. You’d think the industry would be past that by now.

Blunt: Yes, we have very few paper applications on our end now, and I think most carriers are there, but you’re right, it still exists. I can’t think of an industry that is as backward when it comes to that process. So, there’s still a lot of work to do, but part of the reason we’ve seen the growth on the life insurance side is because it is now close to “instant issue.” Why it has taken decades to get to this point is beyond me, but it has.

Feldman: You mentioned that your “GEM” formula includes an “E” for engaging your employees. Your workforce is mostly remote, correct?

Blunt: We are. We have a beautiful office in Des Moines, Iowa. We have a permanent office in New York. There are a number of people there on any given day, but we don’t force folks into the office “X” days a week. And that was a strategic decision early on as we were emerging from COVID-19, related to how we want to compete in the marketplace. We view ourselves as a national carrier, not a regional carrier. We must decide whether we are looking for the best people and whether we want them to come into the office “X” days a week in a particular city, or whether we want the best people we can possibly get.

It’s philosophical for me. I’m a big believer that if you get the best athletes, create an environment where people like playing team sports, where you have an apolitical culture and where people enjoy coming to work, you will win.

There are very few enforceable patents in our business. We all sell basically slightly different versions of the same stuff through the same folks. So we decided early on that culture will be where we will make our stand, and we will make our stand on getting the best people. And if they happen to be a seven-hour drive from our office, we still want to go after those folks.

Now, having said that, it puts other pressures on us. We started doing something called Connection Week, where we fly everybody into the home office, and it’s like a three-day festival. We have town halls, volunteer opportunities and lots of social events because people do want to get to know their colleagues — they want to have some human interaction. That has been a winning formula. It just takes a little more effort on our part to organize that and keep that momentum going.

Feldman: What other tools do you use to keep people engaged?

Blunt: We have invested heavily in something we call our leadership forum. We take our most senior leaders, and we do a half-day event. All we talk about is leadership. We don’t talk about budgets or how the business is doing. We talk about how you lead in this new world order. We have outside speakers, exercises that we do. The reality is we’re all figuring this out. None of us grew up as digital natives. We were raised that when you walked to the water cooler, that’s where you shared information and you interacted with other people. Now it is a new world order. Some managers can make the leap. Others, perhaps not. 

Feldman: You were recently ranked No. 1 for highest customer satisfaction by J.D. Power and Associates. What was the key to scoring No. 1?

Blunt: I come back to engagement. We just added some great leaders who have a tremendous passion for improving customer experience. So that would include Senior Vice President Catherine James leading our operations folks in technology. And it would be the wholesalers that interface with our advisors and agents, and our product people. It’s across the board. It’s a team effort to win something like that. 

I was particularly proud of the team because we’ve had outsized volumes. Everybody’s volumes are up, but we have more than tripled our sales in the last five years. We’ve doubled our sales in the last three years. The growth here has been furious. If anything, you would have expected that we would have dropped a little bit. If you create a good environment and employees are happy, they will exude that with their clients. And the reverse is true. If you come into work and you’re miserable and you don’t want to be there, it doesn’t matter how hard you might try to give good service to your clients — it’s going to seep through.

Feldman: What advice do you have for advisors in today’s environment?

Blunt: Keep it simple. We have a love of complication in our business. 

When I started in asset management, I wanted to show the client how smart I was. I wanted to show them upside/downside capture and I wanted to drown them with statistics. And I think it had the opposite impact. It was more intimidating, scarier for clients. 

Sometimes I see that same tendency in insurance. We like to talk about illustrations, technical features; we all want to pretend that we’re actuaries, and at the end of the day, we have a near monopoly on something that’s critically important: guarantees. We need to come back to the fact that these are insurance products. ... They’re not comparable to other solutions. 

I say this all the time: There are only two industries that get to use the “G” word without going to jail: banks and insurance companies. Banks can guarantee short-term returns. Insurers are the only ones that can guarantee long-term returns, and that can take longevity risk and mortality risk off the table. It means going back to the basics, spending more time listening to clients, spending less time on the technical minutiae of what our products do and explaining to clients that these products are tools. Here’s the plan, here’s what you’re trying to accomplish and here’s why this is a good solution for you. I think the best advisors do that naturally.

Feldman: You recently conducted an “unretired” survey. I thought that was an interesting term. What were some of the findings? 

Blunt: A little history on where it came from. I myself “unretired.” I retired from New York Life in May 2017. I was a relatively young retiree. I was 55 years old and kind of excited about controlling my own day and figuring out what to do next. It can be a daunting challenge. It’s a great luxury to be in that position of, hey, I can do almost anything. 

One of the things that hit me is I had confused financial independence with retirement. I’ve always loved working. I’ve always enjoyed leading teams and being part of a team. I think a lot of folks go through that thought of, “Oh wow, I don’t have to work.” And then they have a little bit of this realization of, “But I actually like working. Maybe I just want to work in a different way.”

I have this theory that with so many work-at-home opportunities now, careers will extend and that will be a good thing. We have a shortage of productive workers in the country. I think a lot of people, particularly of my generation, will probably choose to extend their working years. 

We thought it would be interesting to see whether we could go out and do some in-depth research. Is this all anecdotal, or is there real evidence of this? What we found was remarkable. Roughly half of retirees and pre-retirees either have come out of retirement or have either are actively contemplating coming out of retirement — and not for the reasons that you would think. It’s not money. In the majority of cases, they’re saying things like: “I miss intellectual stimulation. I miss being part of a peer group. I miss that team sport aspect of working on something with others.” 

Feldman: Yeah, I think there’s only so much golf you can play and boating that one can do.

Blunt: Yeah, I joke that I’d probably still be retired, but my wife beat me at every single sport. She picked up golf and quickly surpassed me. She’s better at tennis and pickleball. And so, yes, I ran out of sports that I could be competitive in.  

A lot of folks, particularly of my generation, are looking for some guidance on what to do next. I always say to advisors, don’t limit your role. Share your perspective on ways other clients have navigated retirement, share stories about what other folks are doing in retirement. That can be impactful and a great way to build even deeper relationships with clients.

Feldman: How impactful is the economic environment on your business?

Blunt: Volatility is our friend. People tend to think rates up, good; rates down, bad. Historically, that’s true for our industry, but less so in the annuity business. It’s a spread lending type of business. I think advisors are increasingly seeing fixed annuities as a fixed income surrogate. And they’ve realized that owning bonds, mutual funds or even individual bonds can be supervolatile. 

I think the environment will be great, but I think it actually extends well beyond just the level of interest rates. I think there’s a sea change and people are figuring out there’s a role for these products in portfolios. And it’s not just the traditional insurance advisors who believe that. Traditional stockbrokers and more market-oriented financial advisors are embracing that.

Feldman: What can we do as an industry to better promote annuities? They sometimes get a black eye in the media. But the amount of assets annuities have protected over the years is incredible.

Blunt: I just keep coming back to the sizzle, not the steak. Sometimes we’re our own worst enemies and we get involved in trying to explain the minutiae of every single rider — just go back to what is the purpose. Why does our industry even exist? It exists for risk pooling. Nobody else can do that. 

So going back to using words like “guaranteed lifetime income,” using words like “take risk off the table,” that’s what our industry’s about. And I think maybe because of the explosion of variable annuities over the years, there was an attitude that we want to be like the other guys and talk about our industry the way the asset managers talk about themselves. That was a big mistake. 

We need to go back to the fact that these are protection products; we’re just protecting different risks. You can take a portion of your assets and turn it into a pension — clients all know that’s important and a good thing to do. The most common reaction you get is, “I didn’t know you could do that.” And these are successful, highly educated people. And they don’t know that you can do that. So, I keep going back to “keep it simple.” Talk about the benefits, don’t talk about how the watch gets made. This market is massive. It’s trillions and trillions of dollars.

Feldman: With how quickly you’ve grown over the past five years — and doubled in the past three years — how big can you go?

Blunt: The biggest limiter is always capital. If you believe because our company has done well and our stock has done well, we can always raise additional equity capital, well, that can be a fairly big “if.”  Sometimes you can and sometimes you can’t. But with that as a caveat, I still think our potential for growth is unlimited. 

We talk about the market being fixed, deferred annuities. But when you talk about products like RILAs, you’re now competing with mutual funds. We’re launching RILAs this year. That’s a multitrillion-dollar industry. Sometimes — and I say this to my peers — we must get out of our own heads. Sometimes we’re way too close to this, we’re too into the weeds, and we have to step back and realize we’re part of a much bigger universe, which I think is pretty unlimited. 

Paul Feldman started the website InsuranceNewsNet in 1999, followed by InsuranceNewsNet Magazine in 2008. Paul was a third-generation insurance agent before venturing into the media business. Paul won the 2012 Integrated Marketing Award (IMA) for Lead Gen Initiative for his Truth about Agent Recruiting video and was the runner-up for IMA's Marketer of the Year, a competition that includes consumer and B2B publishing companies. Find out more about Paul at www.paulfeldman.com.