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CEO Interview
Guardian Life’s CEO Andrew McMahon Wants the Mutual Insurer to Spend 2021 Looking Within

Less than a year after taking the helm of the 161-year-old life insurer, McMahon finds himself navigating what’s next as the U.S. reopens following the COVID-19 pandemic. Chief among the efforts is a plan to look within and examine what the company should look like at all levels.
  • Terrence Dopp
  • July 2021
  • print this page

Key Points

  • Position: McMahon took over as president and CEO in September 2020 as the company dealt with a remote workforce and the pandemic.
  • Groundwork: McMahon credits the company’s workforce for a smooth transition during a tumultuous period and cites the groundwork laid by predecessor Deanna Mulligan as instrumental in why the company has remained vital over the period.
  • Ahead: On tap for the coming year is McMahon’s “rearticulation” effort aimed at looking to determine what a modern peer company would look like if founded today and ways in which that effort can improve a 161-year-old organization.

Andrew McMahon, president and CEO of The Guardian Life Insurance Company of America, wants his company to spend the coming year on an exercise he calls “rearticulation.”

As in, rearticulating business practices and the role the company plays in the financial and overall life of each client. Think of it as a good old-fashioned soul-searching.

“If you were going to invent a life insurance company the size of Guardian today, what would that look like in a contemporary means and a contemporary umbrella?” he asked.

Guardian came in at No. 26 in the Best's Ranking of Top 200 U.S. Life/Health Groups based on 2020 full-year data with $86.36 billion in admitted assets. And the workforce is big: Guardian has an employee base of more than 9,000 people and a network of over 2,500 intermediaries.

For the coming year, McMahon said he's identified three prime goals for his company: determine how to stimulate expansion in a low-growth environment; how to take all of the positives the company has and roll them into a quicker and more nimble company; and how to leverage Guardian's mutuality to align corporate and market needs.

In the future, McMahon said, he wants Guardian to fundamentally shift how clients interact with a life insurance company. In the old model, policyholders signed up and underwriting caught a snapshot of that period with little in the way of check-ins. Now, through the use of things such as expanded data and wearable technology, McMahon said, he's looking to continue tracking health outcomes and lifestyle changes over the full life of a client.

“Are there some more innovative ways now to use information on people that we see signal-bearing information being captured, being collected and being more easily processed?” he said. “The opportunities that come here may not be as much in what we traditionally thought of products but might be more in some new types of services and new types of products that nobody even has in their mind today.”

Think of it as balancing the common and the individual good. If a mutual life insurer has its own interests weighed against that of clients, McMahon said, he thinks concerns about data-tracking and the potential for misuse will be less of an issue. “If our interests are aligned as a policyholder and a company, then I would like you to live for a long time, and you would like to live for a long time,” he said.

The exercise goes beyond the company's insurance, annuity and wealth products. And while he's quick to note the initiative is in its infancy, McMahon said he believes Guardian stands to benefit as the life insurance industry moves from being purely transactional to being a part of clients' everyday lives. “I don't exactly know yet what that looks like, but I do know that it's going to be different.”

The rationale, as McMahon describes it, is that “opportunity abounds” for life insurance, but it's going to take some change. Every facet of business and industry has experienced great evolution, and he points to technology companies as adapting well over the past decade.

“There are some very good reasons why we haven't,” he said, pointing to industry gripes such as needed tech upgrades, age and legacy systems. “What's not a good excuse is 'That's the way we've always done it, and we don't need to change.' I think that is the real opportunity going forward, and that is the opportunity I'm going to keep pushing.”

A Snapshot of The Guardian Life Insurance Company of America

  AM Best Financial Strength Rating of A++ (Superior)
The company is split along two core segments, Individual Markets and Group Benefits, and offers a wide variety of insurance and fee-based products and service options.
$85.5 billion in assets under management
$722 billion life insurance in force
$1.7 billion in operating income
$11 billion in premiums
29 million clients across product lines

Sources: AM Best Co. and The Guardian Life Insurance Company of America

Pandemic Shift

McMahon took the helm amidst the COVID-19 pandemic in the autumn of 2020—eight years after Hurricane Sandy displaced the company from its New York City headquarters. At that time, then-CEO Deanna Mulligan promised the company would never again be caught “flat-footed” and initiated Guardian on the Go to provide the technology and processes necessary for a remote workforce.

But during the pandemic, Guardian also had nontech concerns such as helping parents juggle childcare with extended school closures that lasted much longer than those after Sandy, McMahon said. More recently, the company has been assisting about 2,000 workers in India where the coronavirus has made a recent, devastating resurgence.

“It was without a hitch. I can say that now,” McMahon said of Guardian's move to remote work during the pandemic. “We were saying that back then, but very quietly because of everyday worries. Service for our clients—How is that happening? How are we issuing new business? How are we doing underwriting? How are paramed exams or requirements for paramed exams getting done? Many of those things we pivoted very quickly to digital.”

Getting to be a 161-year-old mutual life insurance company benefits from a number of strengths, not least among them a gargantuan balance sheet, but also an ingrained identity both in terms of the corporate culture and standing in the larger market.

Yet, there can be drawbacks.

Legacy companies can face problems that upstarts in other industries don't have—starting with the need for technology, McMahon mentions, and progressing to more pernicious issues such as older business models and an unwieldy structure.

In that last respect, McMahon points out that a mutual life insurance company is writing a long-tail policy and making decisions on a much longer horizon than the quarterly time frame public counterparts are looking at.

That mutuality means Guardian is owned by policyholders, and the company has paid dividends to them since 1868. In 2020, that amounted to $1.1 billion in declared policyholder dividends, according to company reports.

Line of Business by 2019 Direct Premiums Written

Line of Business US$ (000) %
Ordinary Life 4,547,417 47.3
Group Life 647,655 6.7
Individual Annuities 341,249 3.5
Group Annuities 7,602 0.1
Individual Accident & Health 803,709 8.4
Group Accident & Health 3,269,628 34.0
Total 9,617,260 100.0

Source:

Leadership Credentials

McMahon likes to say he is an alum of two storied management academies, General Electric Inc. and McKinsey &Co. The first taught him the need to be decisive and fostered an “action-oriented” outlook. He credits the second with his appreciation for the virtues of analysis and really examining the details.

As for leadership, in the context of a proven mutual such as Guardian, it's about doing the right thing for the people and communities it serves and maintaining a sense of empathy, McMahon said. He also sees a strong value in any chief executive maintaining compassion, a sense of urgency and clear communication. That last point has been particularly important during the current health crisis. “The role of the CEO is split. Part of the split is big picture, obviously, but also when do you actually need to get involved in some of the little things?” McMahon said. “I think COVID certainly got many of us involved in lots of things every single day on a minute-by-minute basis.”

He said he quickly found himself involved in unexpected areas, such as minute details of changing underwriting protocols for business operations and underwriting, and finding ways to support employees and working parents.

“My own internal processing is always fact-based, analytically driven and with an impact orientation,” he said. “So I probably don't shy away from getting involved in the very small, tactical decisions. In fact, part of it for me is actually energizing. Maybe not for everybody else. So I often have to hold myself back and say that's someone else's job, but I'm always happy to provide an opinion.”

McMahon said leadership in his role means ensuring that promises are met on the corporate, financial side of the ledger and the client-facing service side.

“I think every good CEO has to play this balancing act,” he said. “When is it my time to be on stage and show, and really promote and market? When is it my time to really get down to brass tacks and decide here are the business lines we are really going to invest in and disinvest in or even divest? It's that balancing act in how you spend your day and week.”

Learn More

The Guardian Life Insurance Company of America (A.M. Best # 006508)

For ratings and other financial strength information visit www.ambest.com


Terrence Dopp is a senior associate editor. He can be reached at terry.dopp@ambest.com.


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