Process Matters More Than Product: Chris Blunt on Winning the Middle Market

Paul Tyler (00:00) Hi, this is Paul Tyler, and welcome to the L&A Hub podcast, recorded at the LIMRA Annual Conference. And we have some great guests today. Sean, do you want to do the honors on our intro?

Sean Grindall (00:13) I would love to, Paul. Thank you. And pleased to be joined here today by Chris Blunt, who is CEO of Peak Altitude Equity. And we're gonna talk about the gap in insurance today. So, Chris, I know the last seven years you've really had the privilege of leading product across life insurance, annuities, institutional, and distribution. And most recently you moved to lead distribution. As you think about the consumer out there, the gap that we have in product, particularly around life insurance, what do you think is the biggest mismatch?

Chris Blunt (00:48) Yeah, I would say, and it's an obvious point, but our industry has grown largely through larger premiums to more affluent clients. And so I think the biggest gap has been in the middle market. Product design needs to be a little bit different when you're playing in the middle market. Premiums are a bit smaller. You need them to do more. And then I think process becomes in many ways more important than product itself, meaning you've got to figure out how to make the process seamless, more automated. So I think the development of more and more digital products is going to be a real benefit in the middle market.

James Caparosa (01:22) Chris, that's great. I actually wanna stay on that topic for a second, from a product lens. How much of what you're seeing is being driven at a product level, where you're thinking about product versus what's good for the carrier, the agent, and the consumer? Where do you see that balance being struck?

Chris Blunt (01:40) Yeah, it's a great point. I mean, obviously it's gotta work for everyone. And I think, take network marketing, for example, which is one of the few channels that has been penetrating the middle market and doing a great job where all the young family formation is. In the early days, I think the product design kind of left out the consumer, if I'm being honest. It's an expensive channel to work your way through. So I think the newer designs, where you've seen a good consumer value proposition, flexibility in terms of compensation structures, which can be a little more complex there, and then the evolution of living benefits. I think sometimes we get bored and we stop talking about it, the living benefits of life insurance. But particularly in the middle market, again, limited premium dollars. Yes, you want to take care of your family in the case of premature mortality, but you also have a lot of other things to worry about, and you don't have the flexibility to buy seven products, for example.

James Caparosa (02:38) Right.

Paul Tyler (02:39) Yeah. And Chris, maybe talk a little bit more about the experience that carriers really have to provide to target that middle market, because a lot of people don't have big balances in their checkbooks. And when we're talking to the middle market, pulling money for a premium on the wrong day of the wrong month can really blow up a policy that an agent spent a lot of time cultivating. If we really want to get there, what does it take from the industry to do it?

Chris Blunt (03:04) Yeah, it's a great question. And I think sometimes we want to bifurcate the product challenges and the operational challenges. The reality is it's an ecosystem. It's all got to work together at the same time. And so I think our biggest issue in the middle market is we're not growing the agent force of our industry. We've all talked about it for 20 years, but nothing's really changed. There are a handful of firms that are recruiting new people to come into our industry. So I think that's a challenge we just have to tackle. How do we make it more attractive? Do we need more part-time paths to join our industry, which is what a couple of the portfolio companies we own at Peak are doing? That's the model. It's more Uber than black car, as an analogy. So I think that's step number one. The second is, you're right, product design does need to change. You need flexibility around premium size. Those premiums have to do more. Because again, you don't have the luxury of saying, well, if I get cancer or get sick, I'll buy a different product, because the reality is you've got a limited amount of premium to spread around.

Sean Grindall (04:12) Want to build on that, Chris. So as you think about the future, right? If you look at today, we have those that are purchasing insurance. They know how it fits in their plan, they have confidence in it, they tend to buy more. Right. And then you think about the hundred million Americans who are self-identifying that they don't have enough insurance. And so as an industry, as carriers, what do we need to do from a product perspective to engage those 100 million that know they need insurance but just haven't taken that step?

Chris Blunt (04:37) Yeah, it's probably the biggest frustration for all of us. I've sadly been doing this now for 40 years, my fortieth year in our industry. And it's the one area you think, wow, I would have thought we would have made much more progress by now. As you look at uninsured, underinsured, the gap is massive. I think it's a couple of things. It's how we position the product. So again, I think living benefits to a younger person are much more appealing. People love combination products. So I think that's a feature of our industry as well, meaning they love the idea that these premiums aren't wasted. One way or another, I'm gonna use them. Either I'll build some cash for retirement at some point, or if I need it for long-term care, for example, I can use it for that benefit. So I think there's a huge education piece. We talked about this at the LIMRA board meeting in some depth over the last couple of days: what more can LIMRA do? What more can our industry do to change the narrative around both life insurance and annuities?

James Caparosa (05:35) Chris, I'm gonna take a personal route here. We're at the LIMRA Annual Conference, it's the end of September, we're talking about life insurance, it's the tail end of Life Insurance Awareness Month. What's your personal connection with life insurance, whether it's personal or something you've seen in 40 years in the industry working with agents and advisors?

Chris Blunt (05:57) Yeah, yeah. This is a tough one. I'll try not to get too emotional here. But you know, I recently lost my brother. And we've all seen it in our careers, having spent a long time in the insurance industry. We understand the social purpose of what we do and how important it is. I would say for me it was extra personal, right? To see the role that that played at the end of his life. He was incredibly focused on wanting to leave a legacy for his two girls. And it sort of consumed his final thoughts, the pride that he had that he could help them jumpstart their lives, have a little less financial stress. That was pretty important. So yeah, every once in a while you get a very real "why we do what we do."

James Caparosa (06:46) Yeah. Thank you for sharing that. It's a great reminder. Sometimes we just go about what we do day to day, and there's a human, there's a person at the other end of that policy that we're selling.

Chris Blunt (06:58) You know, at F&G we started introducing more agents into town hall meetings, and a number of them told their personal stories, like what I just shared. And you could see heads nodding. A prior boss of mine used to say this all the time: our core product is a social good, and we can never take that for granted. We don't sell polluting chemicals and then spend time on charitable work trying to make up for it. At the end of the day, what we do is incredibly sacred.

James Caparosa (07:30) Thanks again for sharing.

Paul Tyler (07:31) Yeah, well, thanks so much for coming by. I guess, any recommendations to the industry for 2027, and priorities that we all should be focused on?

Chris Blunt (07:40) Yeah, I would play a little bit off some of our board discussions, and I would say cohesion. The real goal for all of us is to grow the pie. Life insurance and annuities are underutilized tools in the toolkit. So there tends to be more of a battle of, you know, I want to take premiums from you, you want to take premiums from me, as opposed to: there's a massive opportunity here. There are multi-trillions of dollars of assets at play. And so whatever we can do as an industry to make it easier, make it simpler, increase the wallet share of protection products relative to traditional investment products, can be a huge win for everybody.

Paul Tyler (08:23) Well, thanks. Sean, any last thoughts to share?

Sean Grindall (08:26) Yeah, I think what a tremendous opportunity, right, for us in building this industry. [inaudible] an opportunity for us to work together. So I really thank you for taking the time here today to spend with us, share your thoughts, and talk about the conversations we've had over the last couple of days.

Chris Blunt (08:41) Awesome. Thank you.

Paul Tyler (08:42) All right. Hey, thanks so much, and be sure to watch additional episodes of the discussions we'll have with leaders the rest of today. Thanks.