Switching asset gathering at pension and wealth firms for the UK’s biggest group income protection provider is a big change for Unum’s new CEO Mark Till. So what is his mission and what learnings can he bring from his former experiences in financial services?
Till’s role as managing director at Aegon UK saw him oversee a platform and pensions business with £170bn of customer assets across 3.9m customers, 6,500 advisers and 10,500 employers. He was also responsible for 550,000 protection policy holders.
Prior to his five-year stint at Aegon he worked on wealth as a consultant for Zurich, and also held investing roles at Fidelity International and Standard Life.
So what does he bring from these experiences to Unum? His overarching message to the business is one of an untapped potential.
“This is a growth play. In the past the things I’ve done have been about driving growth. And I look at Unum and it’s got a brilliant reputation, a really good product set, but I don’t think it’s currently making the most of its opportunity. I’m here to breathe some life into that growth opportunity.”
Unum is the leading provider in group income protection, covering over 810,000 employees with the product, although sales fell back by 2 per cent in 2020 while rivals Aviva and Legal & General managed double digit growth. It is the third largest group critical illness provider and grew the number
of employees on its book by 30 per cent in 2020. It ranks seventh in terms of lives covered under group life schemes, having shed 4 per cent of lives in 2020.
This presents opportunities to grow in the areas where Unum is currently less developed and push ahead in its traditional group income protection heartland. The question is, how to achieve this.
Track record
Till points to his impact at other companies as an indicator of what he hopes to achieve at Unum and how he intends to get there
– and forging strong bonds with intermediaries is top of his list of priorities. “Looking at my track record, when I joined Aegon it was a legacy pensions business with £40-50bn of assets, two million customers and a platform. When I left five and a half years later, it had almost four million customers and £170bn of assets and was the largest investment platform. It had built an asset management business and it had integrated its protection business. “When I joined Fidelity, it had a direct investing business that had £6bn of assets. In my three years in charge we created guidance as a proposition and the business had grown from £6bn to £12bn of assets. So I think my record is about taking something that’s good but has more potential and finding a way of listening to its customers better and therefore creating growth within the business. And that’s what I hope to bring to Unum.”
Broker conversations
While all businesses share common characteristics, group risk is different to the world of asset gathering in investment and pension businesses. So how will he tackle growth in his new role?
“To start with, I want this business to focus on being exceptional for the brokers that present our products to employers and employees. I know that when we sit in front of an employer and employee, we can absolutely show what a difference we make to helping people have better lives, recover from the problems that they go through, support them financially, support them with rehabilitation.
“Our job is to support brokers to have a brilliant conversation with clients, because I know that when we’re doing the core thing of helping people when they’re in trouble, we do that exceptionally well. Our recovery rates of people who go through our service are exceptional. So I will concentrate more on the broker than we have been doing,” says Till.
And how has Till found his early conversations with brokers and consultancies?
“They’ve given me lots of ideas about how to improve the business, which is good, which you wouldn’t do if you didn’t care about your partner. And it genuinely feels like there’s a partnership here that could really work.”
Till also wants to see Unum take a much bigger share of the group life market. “That’s a significant opportunity for us, where we play a relatively small part at the moment, and yet it’s the product that most people have,” he says.
Beyond the core GIP product he also points to the growth in critical illness as an example of how a change in focus can lead to an expansion in business, be it group life, dental or optical.
“What stops us having the same thought process around the group life market? We’ve obviously got a dental business at the moment to be much more broadly spread. We’ve got an optical proposition that’s very lightly used in the UK and we’ve got a few new product development ideas. But at the moment, I don’t think we need more products. I think we need to use the products we’ve got more effectively,” he says.
So how is Till going to take Unum forward?
“Some of the growth is obviously about market share as opposed to market size. And there is also the degree to which companies already covering some employees could cover more of their employees. And then obviously the last and the hardest part, as we all know, is for firms who don’t use this type of product to start to do so.”
“The conversation for the last three years has been towards wellbeing and retaining and attracting talent in a way that wasn’t present for the 20 or 30 years before then, and Covid is accelerating that conversation.
“As we move to hybrid working firms are going to need to find other ways to connect their employees to the company and benefits. The way in which you care for these employees will be a differentiator, because if you rarely see your colleagues in the future, your culture is going to be harder to absorb. And I think employee benefits, engagement, wellbeing, these are the things that can provide the additional bridge.”
Till says the UK operation benefits from being part of an American giant with huge resources.
“Just over 90 percent of all of our people, customers and capital is in America and they are constantly innovating. Their laws are different but there are lots of similarities too. There is a lot of new thinking around mental health, which in the US they refer to as behavioral health. They also have some really good investments in AI and robotics to try and help make things easier for the customer, the client or the person who might be needing to talk to us, whether they’re a broker, an employer or even an end customer. “And then there’s a very big business in the US around the management of absence, in a way that doesn’t exist in the UK. You wonder if that could become an opportunity in the UK,” says Till.
Hybrid working future
Till believes the successful group risk providers will be those that manage to develop a proposition that helps employers create a culture that embraces hybrid working and forges a connection with employees that motivates them to want to work for them.
“Nobody really knows how hybrid working is going to work. If it’s transactional – you pay me money, I work from home – where’s the USP of that firm? Where’s the reason to stay and create value? Because we all know that employees create more value the longer they are with you.
Constantly churning people who might want to chase a £1,000 pay rise because they’re still going to work at the same desk, looking at the same screen, is not productive. You’ve got to build connections in a different way. Firms like ours that are in the employee engagement, wellbeing space, will be connecting with people more through the services product than through the insurance product.”
Undiagnosed conditions
For providers insuring long term health, a pandemic like Covid-19 must raise lots of questions, with non-diagnosis of conditions widespread and long Covid itself an uncertain threat. So what are the actuaries inside Unum telling Till what it all means from an underwriting and pricing perspective?
“Our colleagues in the US are doing a lot of work on long Covid and they are finding its decay curve is quite fast. The number of people with symptoms after twenty eight days deteriorates quite significantly. So we are mindful of it, but not scared.
“The big unknown is the degree to which medical symptoms have become worse through a lack of diagnosis, which will almost certainly be most noticeable in cancer treatments. The degree to which that either changes a claims profile or impacts more people, none of us quite know that yet, because all we have seen so far is that the number of new claims has been falling. So the amount that we have paid out has increased, mainly because death claims have obviously been higher.
But for income protection, generally over the Covid period, there has been a reduction in new claims.”
Mental health equation
Till points to two opposite dynamics in mental health. “Initial inquiries related to mental health are up 97 per cent, a virtual doubling of demand. But if you look at mental health IP claims, they’re down now to the figures from April 2018, having been on a rising trend. They start to fall off from March 2020. The question is, are people finding working at home is allowing them to manage the things that have been debilitating to mental health? And as people go back to hybrid working, will that allow a more manageable set-up? So on the one hand, you’ve got isolation and on the other hand, you’ve got the extra time and the lack of commute and all the stress that entails,” he says.
People business
And why has Till decided to move into group risk at this point in time? “I’ve worked in financial services since 1985 and this is the first chance I’ve had to work for a business where at its heart it wants to look after people. That appeals to the emotional aspects of coming to work. Financial services doesn’t instinctively work for the greater good of people in trouble. Unum’s reputation is good and the opportunity for growth is really good. So I look at that package of doing some good, in a nice culture, with nice people, in a good business with lots of opportunity.”
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