How Securian Grew In 2020 While Life Insurance Payouts Increased

Star Tribune (Minneapolis, MN)

As a provider of life insurance, St. Paul-based Securian Financial knew more than most companies the devastating impact of the COVID-19 pandemic.

Like other companies, Securian sent employees home to work remotely, technology investments made the shift easier and streamlining some processes helped them better serve customers. It issued new COVID-related benefits and stipends for employees. It even added 250 more employees in 2020.

The pandemic meant Securian paid out $275 million in COVID-related life insurance benefits to customers, about 8% of the claims it paid in 2020. That outlay affected the company's net income, which fell 44% in 2020.

But Securian's top-line revenue grew 4% and the corporate credit rating firm Fitch Ratings recently reiterated Securian's AA rating and "stable" outlook.

At 141 years old, it is one of the oldest companies in St. Paul and in the state. While the events and challenges of the past year were unprecedented to individual careers, the company has survived much more in its long history, Chris Hilger, its chairman and chief executive, said.

Hilger said he's proud of the response that the company made in fulfilling its purpose and promise by taking care of its customers, supporting its employees in their shift to a work from home environment, and raised its financial commitments to the community.

In an interview in Securian's remodeled corporate boardroom, Hilger discussed three crisis-management principles he and other executives developed to guide their decisions through last year.

Some excerpts from that discussion:

Q: What was it like leading the company last year?

A: It was an unexpectantly gratifying year to be leading a life insurance company. It wasn't without its anxious moments. But it was certainly in hindsight a year that we are all really, really proud of."

It's about the many, many ways that we took care of the people who count on us. Whether it was our associates, our customers, and this was a time in which we needed to build upon our great legacy of being supportive of the community more broadly speaking.

We celebrated this all year long.

Q: You developed three crisis principles to guide your decisionmaking, what were they?

A: Taking care of the people who count on us; protecting our financial strength; and making sure that we don't get so caught up in the crisis of the moment that we forget about preparing for the future.

You can get kind of hunkered down if you are not careful and we very early on said, hey, we have to take care of the urgent issues here, but lets not forget to be forward looking, forward thinking and really drive the things that we need to drive to be successful and thrive long-term.

Q: When did you come up with those principles?

A: This theme of uncertainty was really becoming pervasive. I mean as a life insurance company you are thinking about how many death benefits are we going to need to pay to all those people, for example.... I remember it was about the first of April where I first communicated our crisis-management principles and we as a leadership team really were able to benefit from thinking about things with a longer-term perspective anchored in those principles.

Q: You created COVID-related benefits and a $500 home-office stipend for employees, yet still paid out year-end bonuses?

A: We decided to take a real purpose-driven approach to thinking about the bonuses that we paid our employees.

Our financial results in the normal formula would have resulted in very little bonus being paid out to our employees. That's just the reality, yet we ended up paying over 90% of our target bonuses to our employees. And I think that the reaction was a real vote of confidence in the company.

Q: How did you treat community partners last year?

A: In a year when our earnings were going to be down, this was not a year to pull back from the financial support we were going to offer the community. So absolutely we increased our financial contributions 25% to $8.5 million dollars. There was just so much need in the community you couldn't ignore. You can get caught up with your quarterly earnings results and say well we are not in a position to be able to do so, or you can say wait a minute, we've got to step up.

Q: How is Securian thinking about the return to office?

A: This is going to be a big transition. It was a big transition leaving — going remote. It might be an even bigger transition coming back. I think we need to be smart and learn as we begin to welcome people back into the office. We are going to be thoughtful about it.

We believe in coming together. We want to be able to learn what coming together looks like, and again it will be different. We've been here for 141 years and we want to be part of St. Paul coming back to life and the energy that comes from being part of these communities. So we will come back but it will be different than it was in the past to be sure.

It's going to be really important to optimize the facilities to support the type of collaboration that we are going to be looking for in the future

Q: What were some leadership lessons you learned last year?

A: Number one: Preparation matters a lot. One of the things I love about being part of this organization is the preparation that we undertook. Not for this particular event because nobody knew this event was coming on, but preparation we took that really helped us.

Whether it's the big technology investments that we've made, the space improvements we are beginning to make. Quite frankly, the financial strength that we built up. It was incredibly comforting to have the financial strength of this organization when you think about navigating all the uncertainty that was there. That wasn't our concern, our concern was never, hey, are you going to make it.

The second big lesson that I have is don't underestimate the dedication, resilience, and innovation of your employees when it matters. When you are in a crisis you can count on that. I always hoped it was there — but flying colors. It was amazing to me how well our employees stepped up and just made it happen.

Patrick Kennedy • 612-673-7926

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