Building an Insurtech Community in Hartford

Paul Tyler is Chief Marketing Officer of Nassau Financial Group (formerly Nassau Re), where he leads marketing strategy, the direct-to-consumer channel and innovation activity, and drives the branding of the insurance companies and affiliated asset managers. He built Nassau Re’s direct-to-consumer channel and launched Nassau Re/Imagine, an insurtech-focused incubator in Hartford. He holds an A.B. from Princeton and a J.D. from Cornell Law School, and previously worked at Fidelity & Guaranty Life and in a variety of roles, from strategy to compliance, at a large insurer.

About Paul Tyler

Paul Tyler is CMO of Nassau Financial Group, a Hartford-based carrier selling retirement income products to seniors, and the founder of its Re/Imagine insurtech program.

Dressing for Zoom, and Selling Without a Handshake

The episode began with the question of what to wear on video. Paul told of a wholesaler who wears cologne to feel as if he’s going to the office. The larger point: the pandemic upended the rule that insurance is sold, not bought, and requires being face to face. Annuity agents who used to run dinner seminars and visit homes couldn’t, and about 80 percent of Nassau’s agents, Paul estimated, ran for cover in the first two months, assuming it would pass. Some relocated to follow the sun, which worked only until the virus spread.

A few agents had their best years ever. Typically they either already ran their practices through webinars and web conferencing, which let them hold more appointments a day, or had a targeted market and an indirect way to reach people before talking to them, so they kept referral flow and just changed how they set appointments. Paul stressed the importance of existing clients who give legitimate referrals: if you ran customers through without caring, you’ll have a hard time, and if you served people well, that group will carry you. Nassau has no playbook and is writing one with its agents.

What Nassau Sells

Nassau sells annuities, retirement income products and solutions for seniors, and stopped selling life insurance in April, a decision about the state of the industry and falling interest rates, not COVID. It is also back in Medicare supplement through enforced blocks from companies it purchased.

Paul explained the demand: people don’t want to buy the drill, they want the hole, and everyone is more worried than before about what retirement holds. Annuities are complicated to explain, he said, and the customer journey, which he joked would look like the New York subway map, jumps between a person, a website and a person again; he mentioned chatting with a 72-year-old for 30 minutes on the phone after they came through the website. The basic pitch: while you’re young, stay in the market, but near the end of a career a downturn may come too late to recover from, which is called sequence risk (he credited Moshe Milevsky’s research), and moving 401(k) money into an annuity locks in a personal pension. The challenge, as interest rates fall, is that guaranteed income gets smaller, so people need the product more as it feels like less.

Paul’s Winding Path

Paul spent about 12 years at a very large insurer and had around six “micro careers” in 13 years because of management turnover: compliance, IT, operational planning, sales, finance. When the iPhone arrived, he saw it would matter to the business, sold company stock after the IPO and started a mobile app company on the side, with his wife’s support. His thesis was that a top agent should be able to run a business from the corner of a Starbucks table, handing an iPad or phone over to complete a transaction. He took it to contacts outside the insurance industry, and the rest followed, including leading the rebrand of a company his employer acquired in 2011, before he moved to Hartford in 2016 to Nassau, which had combined with Phoenix Life. Phoenix, he noted, once wrote a policy on Abraham Lincoln.

Re/Imagine and the Hartford Ecosystem

When Paul arrived, little insurtech activity existed in Hartford, even though it had so many insurers packed together. Nassau’s building is on the historic registry and he calls it the most beautiful modern building in the city, with half of it unused. A confluence happened: the mayor (Luke Bronin, a Rhodes scholar who worked at Treasury) wanted more tech activity, the state’s venture arm wanted an accelerator, and Connecticut was looking for innovation zones to replace jobs leaving with GE. About $1.5 million in state funding, matched by contributions from local insurers, brought Startupbootcamp InsurTech to Hartford (Sabine VanderLinden’s team), and then Techstars (an incubator for Stanley Black & Decker), a digital health lab, Upward Labs and a smart-building lab all opened.

Paul first assumed Nassau’s space would be the attraction, but found that startups were more attracted to long-term networking than desks. Re/Imagine’s niche is events that create longer conversations rather than pitch events: startups don’t pitch hard, and executives from The Hartford, Travelers, Symetra and MassMutual, among others, just show up and get to know them. In February, about 30 VCs attended its investor event and 190 one-on-one meetings were organized, and then in March it moved virtual, including a “solve-a-thon” in which startups heard problems from Nassau’s departments and pitched solutions. Nassau’s first investment, a small SAFE, followed, and Symetra joined, pulling startups into its strategic planning. A fall virtual series would focus on reimagining retirement.

Rethinking Retirement

Paul said COVID accelerated trends already underway. The old four percent rule has stopped working with such low interest rates, bank CDs pay almost nothing, and layoffs hit older workers disproportionately. The harder question is how you want to spend your time, not how big the boat is: a two-week cruise every year looks different in 2020, and an assisted living center with social activities now looks like a nice jail where no one can visit. He called it an important forced readjustment of thinking about your future self 20 or 40 years out.

Gilad added that retirement will increasingly merge with health, since health is the biggest factor in quality of life, and mentioned conversations with ITC about merging financial advisors, robo-advisors and health and finance.

Long-Term Thinking

On a longer horizon, Paul noted that life insurers and annuity writers are putting money in a time capsule and trusting companies to honor commitments decades later. He recalled a point from an interview with Anthony Scaramucci, that the US doesn’t need 100-year plans like China, but 20-year plans, which could remove issues from politics. Gilad remarked that Americans plan five, ten, twenty years while Israelis improvise, and both agreed it is better to ask what experiences led someone to a belief than who they’re voting for.

Advice: The Year Without Pants and an Octopus

Since cutting out his three-hour commute, Paul ran 630 miles with his daughter, who then broke her femur on a trail run. His book was The Year Without Pants, about a Microsoft veteran joining Automattic, the virtually run WordPress company, and his movie recommendation was My Octopus Teacher. Gilad shared that he props his microphone on books, including a Cormoran Strike novel and a poetry book from the 16th century.

Key Takeaways

• About 80 percent of Nassau’s agents stopped working in the first two months of COVID; the ones who thrived already used web conferencing or had indirect referral channels.
• Nassau sells annuities, and stopped selling life insurance in April; falling rates mean customers need guaranteed income more while it looks smaller.
• Re/Imagine builds long conversations rather than pitch events, and in February drew about 30 VCs and 190 one-on-one meetings; its first investment came after the shift to virtual.
• Hartford’s insurtech ecosystem came together from a mayor, state funding of about $1.5 million, insurers and accelerators.
• COVID forces retirement planning to ask how you want to spend your time, not just how much to save.