Life Insurance
Mr. Kalamarides Goes to Washington

• Jeff Roberts
• October 2019
• 

Key Points

• Market Leader: In 2018, Prudential ranked No. 1 in group life issued ($138.5 billion) and No. 3 in group life in force ($2.1 trillion), according to AM Best data.
• SECURE: Two bills in Congress include provisions authorizing broader use of open multiple employer plans, including the bipartisan SECURE Act.
• Influencer: Kalamarides uses social media not only to reach Beltway insiders, but also competitors and his own employees.

The meeting took place in a Connecticut living room furnished with flip charts.

Jamie Kalamarides and a handful of other managers gathered at the home of Christine Marcks, then the president of Prudential Retirement. And there in the Hartford suburbs, they huddled on a Monday morning for a day-long, strategic planning session away from the distractions of the office.

That meeting would change the way they approached the retirement business for years to come.

A small laugh escaped Kalamarides more than a decade later as he sat in his window-lined office, overlooking the insurer's Roseland, New Jersey, campus. The president of Prudential Group Insurance still remembers the date of the gathering that helped mold his own path: April 7, 2008.

“We made a number of decisions that day to move from being reactive to proactive,” Kalamarides said, “and those principles and decisions seeded a number of very profitable businesses in Prudential.”

That planning session continues to bear fruit within the halls of Congress as well.

Among the decisions the group made that day—just as the shadow of the financial crisis was building and defined benefits plans were being phased out in earnest—was to embrace the concept of open multiple employer plans.

It allows small businesses and others to pool their purchasing power and reduce costs in offering retirement savings plans such as 401(k) accounts for their employees.

Two bills winding their way through Congress this year include provisions authorizing broader use of open multiple employer plans, including the bipartisan Setting Every Community Up for Retirement Enhancement (SECURE) Act. Kalamarides has been a vocal advocate for the concept the past decade in U.S. Senate committee hearings, meetings with Beltway influencers and almost daily on social media.

And in so doing, he discovered he has a gift for Washington D.C.-style lobbying and diplomacy.

“We realized we could change the way we were doing things,” said Kalamarides, 51. “It has been a long time working on it. If we could expand retirement coverage with open multiple employer plans to another 35 million individuals, that will have an impact for years to come.

“And if we can use that for expanding disability coverage, group insurance and other voluntary benefits, we could provide the framework for how people have financial wellness in the United States for generations. And that's really rewarding.”

It's an example of Kalamarides' mission, according to Marcks and Andrew Sullivan, CEO of Prudential's Workplace Solutions group. He is searching for scalable and sustainable financial wellness solutions that not only grow the insurer's market share, but expand the very market itself to the benefit of the company, shareholders and American employers and workers.

“He is one of the strongest strategists that we have,” said Sullivan, who oversees retirement and group insurance and will become executive vice president and head of all U.S. businesses on Dec. 1. “He is always helping us connect dots, to see trends, to look around the corner. I leverage him in that regard every single day.”

Kalamarides is responsible for the 20 million people who trust Prudential with their life, disability and accident insurance and voluntary benefits as well as the 2,500 employees who work for its group business. It's a critical segment for the life industry, with individual sales falling, the low-interest rate environment exacting pressure on investments and rising consumer expectations.

In 2018, Prudential ranked No. 1 in group life issued ($138.5 billion) and No. 3 in group life in force ($2.1 trillion), according to AM Best data. Group life accounted for 10.3% of its net premiums written in 2017.

While employers may be responsible as fiduciaries for their workers under the federal Employee Retirement Income Security Act of 1974 (ERISA), many do not have the resources or the knowledge to do so. So Kalamarides sees it as incumbent on insurers to fill the role.

“My vision is we've grown double, triple in size in 10 years, not because we're just taking market share away from our competitors, but we've actually grown the market dramatically,” Kalamarides said. “And the way we've grown the market? We've solved more people's problems, especially people who haven't had access to these solutions in the past.”

That means working with members of Congress, legislative staffers, regulators, think tanks and consumer groups in Washington.

Kalamarides has testified in front of Senate committees three times on financial wellness and retirement issues, including open multiple employer plans.

“There is really a sense of the moment as you walk in—of the gravity of the moment, of the ability to do something big here that can have a huge impact on not just today's citizens but generations beyond,” he said.

Of course, the real work begins well before he's testifying in front of powerful lawmakers mugging for the C-SPAN cameras. It gets done in anonymous conference rooms in a series of meetings with staffers hashing out policy proposals.

“Americans are facing some very significant challenges that are not well-understood, but [legislators] can solve the bigger issues of financial wellness across America,” said Kalamarides, a father of five children with his wife, Diana. “I give them a perspective they might not see about what their constituents are facing.

“I find you can move things forward if you come with practical solutions and small changes that just take a good idea and expand it.”

When the Hartford resident isn't in Washington, he uses Twitter to “stay in the dialogue regularly” with the roughly two dozen Beltway influencers who focus on such issues.

His colleagues say Kalamarides is especially gifted at identifying influential contacts, building networks and forming bipartisan consensus.

Marcks—an economist with the U.S. Treasury Department before joining Prudential—remembers a 2016 trip she took to Washington that included visits to Capitol Hill and her old department. Everywhere she went, someone else was telling her how Kalamarides was helping to move legislation forward.

“He emerged as somebody who was not only a thought leader, but brought tenacity in his pursuit of all the legislative and regulatory challenges that we were facing in getting this concept of multiple employer plans moving forward,” said Marcks, who retired in 2017.

“He really took ownership of it and became a champion of that.”

Disruptions, Big and Small

Kalamarides' hands are always moving.

They spin. They bounce. They oscillate. They move in deliberate, rhythmic patterns, usually in sync with his words.

The passion driving Kalamarides' talking hands is the nexus where financial wellness, community service and social justice meet. The devout Catholic and loyal Eagle Scout believes in helping society as much as shareholders, and believes both can benefit at the same time.

Kalamarides wakes each morning around 5, prays and goes on a four- or five-mile run.

Faith is an integral part of his life. Stamatis Kalamarides, his great-grandfather's brother, founded St. Nicholas Church in lower Manhattan in 1916. The Greek Orthodox church was destroyed when the south tower of the World Trade Center fell on 9/11.

“He really does want to make an impact on society, and it'll sound corny, but make the world a better place,” Sullivan said.

Kalamarides views workplace benefits as the perfect place to start. After all, Americans consistently trust their employer more than their government, financial institutions and even charities, according to the 2019 Edelman Trust Barometer survey.

Yet it remains a somewhat new landscape for him. Kalamarides took over group benefits only in October 2017. He had worked in retirement since 2004, when Prudential acquired Cigna Retirement, which he helped build.

The shift has expanded his reach and given him a new challenge, part of the insurer's development plan for the budding senior leader, Sullivan said.

Kalamarides' influence now extends across the financial wellness landscape.

“One of things I like doing the most is taking a market that's in disruption and saying, 'How do we dramatically change it?'” said Kalamarides, who budgets “thinking time” to mull over the future and the business.

Sometimes that thinking happens during his long commute from Hartford to the insurers' New Jersey offices, which he makes a few days a week.

“Amtrak and I are good friends,” he says.

'Ripe for Revolution'

Group benefits has become an increasingly competitive market.

Established insurers are expanding product suites, especially voluntary offerings. Meanwhile, new players continue to enter the market, vying for the rising premiums and healthy margins as core life sales remain largely stagnant.

One of Kalamarides' main targets is changing the way workers choose their benefits.

“We need to step back and look at the whole enrollment process,” he said. “That area is ripe for intervention and revolution.

“We need to transform that 20-minute enrollment experience, so that it is not just 20 minutes of people passively going through and asking, 'What did I do last year?'”

The challenge grows more complex with the transformation of the American workforce. The gig economy threatens the very notion of group benefits and is “one of the emerging challenges in financial wellness,” Kalamarides said.

Meanwhile, many lack access to disability coverage or don't have enough. And unexpected illness and injuries, student loan debt and unpaid leave continue to be crippling problems for workers across all demographics.

“If you want to solve the retirement problem, we have to solve today's problems first,” Kalamarides said. “If they can't solve those issues, they're going to use up their emergency savings and their retirement savings.”

Technology and automatic enrollment and defaults are potential solutions, he says. So are voluntary benefits such as critical illness, accident or hospital indemnity and voluntary paid family leave.

Kalamarides knows the more he understands the unexpected risks that weigh on fragile family budgets, the more solutions he can develop. That is just one reason his work with the non-profit Prosperity Now is so valuable to him.

An Alliance

The chance meeting presented a new perspective.

Kalamarides was on a flight to Colorado for a conference about seven years ago when he met Andrea Levere. The president of Prosperity Now—a research and advocacy organization helping those with limited incomes, especially people of color, achieve financial security—was headed to the same conference.

By the time they touched down, they had bonded over a mutual passion for financial wellness.

Kalamarides now serves on Prosperity Now's board and as its treasurer. He and Levere also forged stronger ties between Prudential and Prosperity Now, with each organization teaching the other.

“One influences the other a lot,” he said. “There is this interplay back and forth of ideas and issues.”

The “shared value alliance,” as he calls it, has resulted in projects such as the design of an emergency savings vehicle within existing retirement plans. Prosperity Now helped Prudential develop and test it.

“Jamie is a visionary in how he thinks about engaging his employees, bringing in information that doesn't come from the company but yet is extremely relevant to what they do,” said Levere, now Prosperity Now's president emerita.

The nonprofit provides another viewpoint beyond the profile of the typical Prudential customer. Kalamarides finds universal themes and lessons in Prosperity Now's work that he can apply to Prudential's clients.

“How do we make a broken market into a viable market for people who are underserved?” he said.

The answer may help Prudential customers, especially those who rely almost solely on workplace benefits for their financial protection.

“2008 was a wake-up call for folks,” Kalamarides said. “People are anxious about outliving their assets and outliving their income. No matter what poll you look at, 70 to 80% of people say that's their No. 1 stress. But you can use that anxiety in a positive way for that person to take action now.”

The Halls of Power

The weight of the historic room hit him as he entered.

Corinthian columns soared around him, rising almost three stories. A gilded ceiling hung 35 feet above him. Black-veined, white marble walls surrounded him.

The Kennedy Caucus Room was nearly as grand as the history that has unfolded within the Washington landmark. It has hosted Senate hearings on the Titanic. Pearl Harbor. Watergate. The Iran-Contra Affair. (The Kennedy name was added in 2009 to honor the three brothers who served as senators.)

And there was Kalamarides in June 2016 in the Russell Senate Office Building, sitting at the center of a panel of financial experts discussing what employers, employees and Congress should do to head off America's looming retirement crisis.

It was broadcast live on C-SPAN.

“I'm a C-SPAN legend!” Kalamarides joked.

There's a reason he has found himself rubbing elbows with members of Congress. He knows his subject matter so well, he even teaches his bosses.

“Even though he works for me, he teaches me every single day,” Sullivan said. “It says a lot about Jamie that he's willing to coach his boss in front of lots of other people. That takes courage.”

And it takes expertise.

“Jamie is very smart and knew a lot about the business,” Marcks said. “He was teaching me some things at that point. That knowledge was really the foundation for what emerged as the multiple employer plans structure to bring to other markets.”

In May, the SECURE Act passed in the U.S. House of Representatives by a vote of 417-3. It remains tied up in the Senate as of early September. Debate also continues on the Retirement Enhancement and Savings Act (RESA), which contains a provision for allowing open multiple employer plans.

If SECURE passes as expected, Kalamarides wants to see the pooling idea spread to insurance cover.

“Why are we limiting this just to retirement funds?” he said. “Why not group life? Why not group disability? Why not insured paid family leave? Why not allow gig workers to join them?

“This concept of creating pools to allow increased purchasing power is a concept that many other countries use and there is every good reason why we should start applying it to other employee benefits.”

In the meantime, he will focus on developing the next generation of leaders—a more diverse, inclusive group. He wants diversity of background and thought. And he wants all voices represented and heard.

“He's probably the best leader I've ever seen at really figuring not only how to hire and build diverse teams, but also how to create a culture that then brings out those different voices to express their opinions,” Sullivan said.

Kalamarides has helped develop “enterprise-level talent” flourishing throughout Prudential, he added.

“We have an industry that is not reflecting our customer base,” Kalamarides said, “and if we're going to be relevant as an industry in the future, our employees and our leaders have to be a better reflection of the nation we serve.”

The principles of the Eagle Scout oath he took decades ago still resonate. And so does that meeting in Marcks' living room.

Kalamarides believes he's affected change, while still taking care of Prudential's shareholders.

“We're a for-profit company. We have to hit our numbers,” he said. “The best way to do that I know is to focus on customers and employees.”