Innovation led by our values

(1)

New York Life The NYLIC Review • 175th Anniversary Issue • 45

175

New York Life has a long history of innovation, and it is a recognized industry leader in the areas of actuarial excellence, information technology,

and product development. Our progress is rooted in our core values of humanity and integrity, and bolstered by our ﬁ nancial strength. Simply said, our innovations support our agents, serve our clients, and enable us to live up to our promises.

Starting early on in its history, the company has carved out a leadership position through its commitment to try to do things diﬀ erently in ways that made sense for a mutual company.

With no underwriting history to fall back on, the company created its own standards, which took nineteenth-century American life into account.

More recently, knowing that digital experiences would help agents reach more people on a personal basis, the company didn’t hold back, committing hundreds of millions of dollars to the eﬀ ort.

And knowing its fl agship products have to keep pace with the changes in American society, the company regularly examines and then overhauls its off erings, ensuring that its policy owners have products that are designed to solve current-day fi nancial concerns and provide long-lasting security.

From Pliny Freeman’s early actuarial excellence to our most recent product innovations, and the Marketing Central eﬀ ort to connect agents to prospects and clients, here’s a look at some of our key innovative moments. n

D E FI NIN G CHA RAC T E RISTI C S

Innovation—led by

our values

fpo

“ There’s deﬁ nitely been a consistent drumbeat

to gain new perspectives from outside the

organization to better understand our changing

environment, marching towards enabling our

customers and agents better, while enabling a

growth mind-set among our employee base. I’ve

certainly seen a marked shift in the tone of

meetings and the tone of the culture throughout

New York Life. It’s exciting.”

—JOEL ALBARELLA, SENIOR VICE PRESIDENT & HEAD OF NEW YORK LIFE VENTURES

• Actuarial Excellence

• Sales Central

(2)

(3)

46 • New York Life The NYLIC Review • 175th Anniversary Issue

Pliny Freeman and William H. Beers, an accountant and mathematician, would put the nascent New York Life on solid footing for a rapidly modernizing America. Their contributions would pave the way for a tradition of actuarial excel-lence that has become a defi ning charac-teristic of the company. Beers, in fact, went on to become the fourth president of New York Life.

In the 1840s, the life insurance industry was young, undeveloped, and perhaps a tad wild — not unlike the United States at the time. The need for protection against

life’s uncertainties was clear. Daily work was hazardous. Primitive sanitation and medical care could do little to ward off disease, and there was scant infrastruc-ture — social, economic, or governmental — for dealing with sudden disasters.

Life insurance off ered the potential to introduce a buff er against the pitfalls of the time. American actuarial science and mutual insurance were both in their infancy, so there was little precedent or guidance for companies that wanted to off er mutual insurance successfully.

Fortunately for New York Life, Freeman had a particular genius for risk assess-ment that proved crucial during the company’s fi rst years. When Nautilus was founded in 1845 (the company would be renamed New York Life in 1849), he was appointed chief actuary, in charge of all the company’s life insur-ance operations.

Pliny Freeman, New York Life’s ﬁ rst

chief actuary, a former dry goods

merchant, taught himself about life

insurance and actuarial science in

his spare time. A colorful character,

he created an actuarial model that

not only survived the chaos of the

early life insurance industry (no

small feat), but also evolved into a

thriving and durable business plan.

By the numbers:

Pliny Freeman and William

Beers pioneer underwriting

(4)

To underwrite risk successfully in the short term, Freeman needed two things: capital and a customer base solid enough to bear the distributed risk inherent in insurance. To address the fi rst issue, he solicited cash pledges from 56 “prominent New Yorkers” to the tune of $56,000 (nearly $2 million in today’s dollars) to off set possible losses. The losses never occurred, which no doubt burnished Freeman’s and the company’s reputation in New York’s fi nancial circles.

Freeman then quickly turned his attention to developing New York Life’s customer base, for which he cultivated a groundbreaking national network of agents. Rather than focus exclusively on New York State, he recruited dozens of agents throughout the settled parts of the country, so people from Rhode Island to Virginia to Wisconsin became part of New York Life’s customer base within a few years.

Accumulating suffi cient capital and attracting customers were critical fi rst steps. To underwrite risk successfully in the long term, Freeman needed a carefully calibrated actuarial model. In his role as chief actuary — a role he held through 1863 — he built a complicated system that accounted for the “American experience.” Up to this point, insurers had relied on British actuarial models that were not directly transferrable to the particular risks of mid-nineteenth-century America.

Through research and experience, Freeman and Beers gradually built a system to account for regional mortality rates and with pricing taking into account the diverse risks inherent in American life. The proprietary formulas he helped devise became the foundation of the company’s innovative approach to providing insurance for people of all ages and states of health. Indeed, his early experiments with an actuarial model ultimately became “the backbone of the company’s risk management system”

and paved the way for the company’s dominance in the industry.

By studying and calibrating an actuarial model built on the “American experience,” and by supplying New York Life with a national network of agents and suffi cient capital, Pliny Freeman and William Beers ensured that, for New York Life policyholders, life could be a little less uncertain, both in the nineteenth century and today. n

Using the “American experience” as a guide, early actuaries like Freeman and Beers developed ground-breaking mortality tables that would guide the company’s underwriting practices and put it on firm financial footing.

‘‘

“ I’m really impressed with how quickly the company moved to help us reach out to our clients during this pandemic. Zoom and other technologies can be game changers, opening doors for us to more easily see clients from other states. Sales Central is giving us the tools to be able to have a great functioning CRM.” — Michael Gisonda,

South Florida Offi ce

“ When eLife came on the scene in 2015, it improved client meetings. It ﬁ lters out questions I don’t need based on the product being purchased and client responses. The ‘wow’ moment was when I noticed that I didn’t need to carry all the forms in my briefcase because they’re already in the app.”

(5)

In 2015, New York Life began laying

the groundwork for the company’s

agents to work in new and effective

ways, and to stay in touch and

develop relationships with their

prospects and clients. It included

initiatives such as personalizing

content for visitors to newyorklife.

com; repackaging product solutions

so they would more strongly align

with consumer needs; fully

integrat-ing customer service capabilities;

and creating a better purchase

experience through more convenient,

less invasive underwriting.

High tech supports

high touch:

Marketing gets personal

Introducing Sales Central in January 2017, New York Life took a major step on its journey to become a fully digital, even more consumer-centric company. At its core, Sales Central provides agents with all their data in one easy-to-find place, accessible from any device, making it more efficient and easier to run their businesses. It does the same for recruiters as they seek a new generation of Nylics.

“With Sales Central, we are turning a page and ushering both the agents and our prospects and clients into a new way of working with New York Life — one that is easier and differentiates the company and its agents from the competition,” said Senior Vice President Sonali Virendra in 2017.

The technology, powered by data and analytics, takes a holistic view of agents’ clients and enables them to deliver an experience focused on each individual client’s needs, preferences, and opportunities.

A robust tool

The platform combines a robust customer relationship management (CRM) tool with a host of other functions that empower agents in meaningful ways:

• Fully mobile and available 24/7, in line with the way agents work;

• Seamlessly integrated, so information does not have to be entered multiple times, saving time and reducing errors; and

• Harnessing the power of data to provide insights and drive results.

From the start, the company knew Sales Central would be a digital journey, not just another software rollout — evolving in real time with use and feedback from the field. New capabilities have been added to Sales Central over the subsequent years, and an entire suite of tools have been integrated into a single ecosystem: Marketing Central and Service Central.

(6)

From mainframes, to laptops to smart-phones, the company has used technology to maintain a competitive edge.

And after some initial hesitancy, agents have embraced the new system. “With Sales Central, when I’m visiting with someone, I don’t have to click around to diff erent screens to log notes. It’s all right there, in one place, for me to input the client’s information,” said Chairman’s Council Agent John Henker, LUTCF, CLTC, Eastern Washington Offi ce, in a 2017

NYLIC Review article.

“One of my biggest things is being organized in my sales process. I feel the sooner you learn this tool, the faster you’ll be able to have an integra-ted wealth of information at your hands. If it can help you get organized, you might as well jump on board as soon as you can,” said Executive Council Agent Eddie Garcia, MBA, CLU, South Texas.

“As the company continues to introduce new tools and update Sales Central, the vision, drive, and level of success will come down to the agent’s individual talent and the company’s ongoing support,” summa-rizes EVP Mark Madgett, Head of Agency. “I have tremendous faith in both and know this is the fi rst chapter in what will be a game-changing experience for New York Life, our agents and clients.”n

‘‘

“ I have always found New York Life to be a leader, not a follower. We are proactive and responsive, whether it is a a regulatory issue, or a global pandemic. We adhere to our convictions on what is best for the community.”

— Jesal Patel, Houston Offi ce

“ Sales Central makes it easier to search for clients, log calls, create tasks, and track opportu-nities. The task management capabilities have become a focal point for us. We’ve already said goodbye to sticky notes.”

(7)

Policy language hadn’t changed in more than 50 years and basic premium rates in over 40 years. As former Chairman of the Board Charles Meares wrote in his memoir, referring to the impact of Project 25, “Modern mortality rates were used for the first time . . . . Every policy was completely rewritten (and) premium rates were slashed.” The wider range of competitively priced products helped agents deliver year-over-year sales records.

Those improvements stood the test of time and helped New York Life strengthen its reputation for quality products. The next time the company made similar sweeping changes to its product line was a quarter-century later with the introduc-tion of four new whole life insurance policies in 1978, launched under the name

Series 78. Among the innovations brought forth under Series 78 were an economy policy priced for younger consumers, lower-priced policies for women, and higher-valued products that provided solutions for the wealthy.

In 2006, under the direction of now Senior Vice President Scott Berlin, the company launched its initial Custom Whole Life policy. Custom Whole Life is now the company’s top selling product. “When we first launched the Custom Whole Life product, we wanted to build a superior Whole Life product that would allow consumers to customize funding of a product that provides both protection and a very strong savings component,

highlighting the value of dividends paid by New York Life,” says Berlin.

In December 2017, the company launched the then new AD117 Whole Life and Custom Whole Life products in all states. The launch was a multipronged, collaborative effort between New York

Building our core:

Whole life evolves to better

serve clients

A task force called Project 25, was

created in 1954 to overhaul the

company’s cornerstone product —

whole life. Leveraging early

com-puter technology, Project 25 was

tasked with reviewing existing

policies, analyzing mortality rates,

policy contract language, and

premium rates in an attempt to

determine whether the policies were

clear, provided the right coverage,

and were priced appropriately.

(8)

Life’s Product Development team, the Pricing Team, Marketing, Technology, Agency, Product Compliance, Underwriting, Illustrations, OGC, SMRU, Service, New Business, and many more. The enhance-ments made New York Life’s flagship product even more competitive and included: • 10-pay Custom Whole Life policies that

are no longer modified endowment contracts for nonsmoker adults with over $100,000 in face amount

• Lower premiums on Custom Whole Life • Improved cash value performance for

our whole life products

• The Waiver of Premium Rider covering Dividend Option Term Rider premiums in all years

• A simplified illustration experience “Fifteen years later, it is great to see how well agents and prospects have taken to the product, and the recent changes

will continue to enhance the value provided to consumers,” concludes Berlin.

And in September 2019, the last of our whole life products based on the 2017 Commissioners Standard Ordinary (CSO) mortal-ity table launched. AD 119 Custom Survivorship Whole Life (CSWL) went live in all states. Like its predecessors, Project 25, Series 78, and AD 117, the entire AD 119 product development process was well coordinated and a team effort. A key part of the process was the partnership with Marketing and Agency to reposi-tion CSWL with our agents and clients. To do this, they performed client and agent interviews in multiple cities throughout the country to better understand how this product could meet client needs. The team also worked with the Joint Product Advisory Group to understand how agents are positioning CSWL, and based on these findings, the team developed several new marketing pieces targeting young and established families. n

‘‘

“ Many of my clients are around retirement age, and they have a lot of fears. The development and introduction of the Clear Income Annuity immediately gave me a way to reassure them and guide them in the right direction.”

— Diane Hack Gould, Greater Washington Office

“ New York Life’s unique CWL product has led the industry for years. It provides safety, protection, and growth, all in one product. CWL provides so many options for income at retirement, money for emergencies, or transferring wealth to the next generation. In times like these, it is great to know there is a product that has guaran-tees. When people are fearful, it is reassuring to know they are backed by such a strong company.”

— Brad Burton, Northern Virginia Office