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You have a unique background in that you were an entrepreneur who ran a successful small business and currently have a senior level leadership role with a major financial services firm. Tell us the advantages and disadvantages of both experiences.

Yes, half of my career was around building a small business in the insurance and employee benefits field, and I did that for about 14 years. The first thing I’d say is that building your own business causes you and your partners to really think creatively, and look at situations and say to yourself, okay, what’s the best way to solve for x, y, z. You’re forced into being versatile so it’s extremely important to hear your clients and listen to them. As a small firm, you’re not really afforded the opportunity to make mistakes, and if you’re not quite clear on what your clients are expecting then there’s a strong likelihood that you will be wrong or make a mistake, and small businesses just can’t afford major mistakes. Larger business can better afford to sometimes fall short of a client’s expectations because there are other reasons why customers want to do business with a bigger firm.

The second thing that I learned was to make sure you had people that had certain skill sets that perhaps you didn’t have. It was important for me to surround myself with people that did certain things or understood certain things much better than myself. The third thing that I think is important is for people to check their egos because at the end of the day, the whole purpose was to make sure that a client was satisfied. Whether or not you had to do something relative to a project that may appear to be a little more menial, it didn’t matter. Somebody had to do it, because the whole purpose of our existence was to provide solutions to our clients.

I think on the disadvantage side was the fact that we were small. We started with two people, grew to 150; we started out with $200,000 in revenue and ended up with $20 million. Pretty good growth, but still small, so the biggest challenge we had was capital. We had minimal access to capital; we put some of our own money in, but we didn’t have the leverage to access significant capital. So what does that mean? That means when you go to innovate or try a new piece of software or get into a different segment, you really have to think it through and hopefully, you got it right. You don’t have a lot of R&D money to waste.

It sounds like reading between the lines, that the skill-set you honed as a successful entrepreneur has served you well in large corporate America as well, because I imagine that the values, and the techniques that you had imbedded in your DNA, you brought with you to your new organization, yes?

That is correct. I think a good example of that is my current role. I didn’t come to MetLife with an annuity background so I surrounded myself with people that had the financial acumen around running the business. I had to surround myself with people that could design products that were competitive, and to rely on sale manager teams that could carry out my vision for how we were going to compete in the space. Our success is really a tribute to the team.

As a leader of a massive distribution organization with multiple channels and multiple product offerings, during your time at MetLife, what has changed and what has remained exactly the same in your approach to driving sales over the last decade or so?

First of all, I think that if you just looked at the industry, we’ve had, over the last 18 months, significant financial turmoil and that has shaken both the advisor and the consumer. Fortunately for us, we’re with a financially strong company with good ratings, access to capital and a great reputation. As a result, we have benefited from a flight to quality. MetLife has over 140 years building and maintaining our reputation. We understand and don’t take lightly that we make promises that we may pay out 40 years from now, and that’s more important than taking some type of risk for the short run.

Secondly, the pace of the business is so much faster; 20 years ago you could take more time to build a relationship with an advisor or with a client. Just the speed by which consumers want to make decisions and the speed by which advisors want to make recommendations, you’ve got to be moving quicker. What does that mean to a big organization? It means that everybody in the organization has to have a clear vision of what we’re trying to accomplish.

Lastly, the other thing I’d say is that the life insurance business has seen huge changes in the types of products that are being offered. It used to be 25 years ago that whole life was the preeminent product; annuities were basically just tax deferral vehicles. Then in the 80s, you saw universal life insurance contracts rise. Now, you look at the annuity business, the products have a lot more guarantees around them, they’re a lot more complicated, requiring the advisors to know more; on the other side of the coin, these products provide a solution that can be quite meaningful.

You alluded to this in one of your comments, but the entire life insurance sector has been downgraded, partly for failing to hedge on the very guarantees that annuities offer and that consumers find very appealing. We’ve had this credit melt-down and subsequent recession. You mentioned MetLife has fared well during this turmoil, or “less bad”. What would you attribute that to?

I attribute it to the value system of our company; we have a very strong understanding of the liability of these products; and a strong commitment to our customers. In other words, we’re very good at quantifying the commitments we are making through these products. We have a strong understanding of the benefits that we need to pay our clients therefore we have a strong risk management and hedging strategy. A part of that strategy is buying assets that we know, or honestly believe, will align with our liabilities over the long term. We’re not risk takers especially because of the promises we’ve made to our clients whether it is to pay a death benefit on a life insurance policy or help an individual generate a stream of income that will last throughout their retirement. Again, it’s because of the promises we’ve made to our customers and clients.

With the depletion of America’s 401(k) accounts, and the underfunding of Social Security - in fact, for the first time ever, Social Security will not be offering a cost of living adjustment to retirees. It seems that there are good opportunities and good prospects for the annuity business over the next three to five years. Where do you see the next “hole off tackle” or the big picture opportunity for highly rated, credit savvy insurance companies such as MetLife, specifically as relates to the annuity business, and helping Americans retire?

Our share in the solution is the fact that the annuity products we sell have guaranteed income built. They serve as a guarantee to give people some level of monthly or annual income. Over the last year, the consumer marketplace is more aware of the need for this. Yes, we’re obviously bullish on annuities; we’re good at hedging the risk and costs of these products and their benefits; we’re very careful about them; we don’t take our commitment lightly. Paying somebody income for the rest of their life, even if the account values decline dramatically -- that’s pretty serious business! We think more consumers are going to look for products with levels of guarantees; we think more advisors are going to look to recommend them, and we fully intend to play in that space.

Do you ever see a public-private consortium between the government of the United States of America and let’s say, the five biggest insurance companies and the five biggest asset managers to provide sort of a default solution or non-traditional retirement opportunity to Americans, through their payroll deductions or their place of business?

I do think that something’s going to have to change. I do think that people are going to have to save more money, whether or not they elect to, whether or not the government mandates it. I suppose it is possible given the governments’ investment in so many industries.

I know that MetLife, like many of its competitors, had to make some changes to its variable annuity products, whether it was to scale back benefits or slightly raise fees. Have these changes made an impact on the value of the product itself? What does the future hold for variable annuities?

If you just think about the shake up that occurred over the past year and a half, all carriers including ourselves have basically contracted the features of their contracts a little bit. What does that mean? A lot of companies, in an effort to make sure that they can be there to pay off those liabilities, have lowered the level of value in these products. That’s what we call de-risking the product.

Looking back on your career, who have been your business mentors?

There have been a few, but there’s one in particular I always look to – a friend of mine Larry Christy, whom I’ve known for some 25 years.

He was a humanities professor for half a dozen years before he went into the business, so he came into the business with a different mindset. Larry worked for a major life insurance company, as a financial planner. He demonstrated what it was all about to listen to your clients and prospects – the ability to talk to people about what they’re worried about. Half of his advice had nothing to do with recommending a financial instrument; instead he was more interested in helping clients make life decisions: careers, buying another house, relocation, retirement. He integrated what I’ll call financial planning and life planning, and he put it together intuitively. He kept listening to his clients, and he figured out that he was the epicenter of not only their financial life, but also their hopes and dreams.

From a business standpoint, I used to watch him with clients and I marveled at his ability to listen, be quiet, hear what the client was saying, and then give it back to them, to confirm with them that that’s what they were worried about. He says to me all the time, ‘If I had to tell anybody what I really do, I’m in the ‘okay’ business.’ His clients would just look at him and say, ‘Larry, am I okay? Am I going to be okay?’ He’d say that his job was to tell them honestly, if they were or weren’t., and then work with them to make sure they were always going to be ‘okay’. It’s that type of philosophy and passion that I took from him, and I have always used it, whether running my own business or in my role now with MetLife.

In the context of the business you are currently running, what keeps you up at night?

That’s a good one. On a current basis, I wonder if the worst is really behind us. The second thing is – if everyone believes that we’ve survived this recession – how do we survive the recovery? And lastly, how the financial professional needs to take an active role in finding solutions – not just quick answers – to those questions I posed. Clients are probably asking their advisors the same thing, and now is the opportunity for financial advisors to be candid with their clients.

I liken the financial professional to the physician you see for your yearly exam. You hope that you’re physician is candid and truthful when it comes to talking to you about your health. Same with the financial professional – you have to be honest with your clients even if it hurts them a bit. If a client doesn’t have enough in retirement to buy that brand new car, or that summer house, his/her advisor should be saying so and then helping the client make adjustments to have a happy life.

If MetLife were to be an automobile, what make and model would it be?

It would be a Volvo just because it’s always been known for its commitment to safety, even when it wasn’t the trend at the time. At the end of the day, MetLife is the same way.

We don’t make rash moves if we’re not sure, at least close to being sure, what the outcome is going to be. Our whole idea has been around safety and protecting the people that trust us with the financial well-being of their loved ones; or with their own well-being in retirement 10, 20, 30 years from now. Therefore, at the end of the day a car is a car and the driver behind the wheel is just as important. Now, Volvo is a safe car but if you drive it 160 mph down a one way street, it’s not safe anymore. At MetLife, we have the structure and security of a well-built Volvo and strong leadership in the driver’s seat.

Metropolitan Life Insurance Company, 200 Park Avenue, New York, NY 10166.

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