MassMutual CEO on navigating the coronavirus crisis

MassMutual CEO Roger Crandall joins Yahoo Finance Live to discuss the state of the insurance business amid the COVID-19 pandemic, and how the company has positioned itself into 2021 and beyond.

Video Transcript

MYLES UDLAND: But let's turn our attention now to a part of the market that we perhaps don't talk about enough here on Yahoo Finance Live, and that is insurance. For more on all of this, we're joined now by Roger Crandall. He is the CEO over at MassMutual and also a member of the Business Roundtable. Roger, thanks for joining the program. Let's just begin, highest level, with sort of how your business changed when the pandemic began, what the last nine months have been like, and sort of how you're position as we head into 2021?

ROGER CRANDALL: Sure. Well, good morning, and thank you for the opportunity to be here today. You know, MassMutual, as the name implies, is a mutual company, which means we don't trade on the exchange, so we can't talk about how our stock has doubled, maybe tripled, the way maybe Airbnb is going to be opening here. But since 1851, when we were started, we've been helping people secure their future and protect the ones they love. And this pandemic has really brought home to everybody the importance of the mission and purpose of our company.

So after making sure all of our employees were safe and figuring out how to work remotely from home, we've actually had a strong year. People are attracted to the strong financial profile of MassMutual. They want to know that they have a part of their financial lives that is rock solid and is going to be there, regardless of what happens. So our almost 8,000 financial professionals all across the United States have been very busy talking to clients and potential clients about how our protection products-- life insurance, retirement products, disability income products-- can make sure that their families are going to be taken care of, whatever might happen in the future.

BRIAN SOZZI: You know, I am interested on your-- when you talk to your friends on the Business Roundtable, what are they saying about the pace of the global economic recovery? Does it-- from what you're hearing, does it-- does the recovery look like it could justify anything, you know, we're seeing in the markets today?

ROGER CRANDALL: Yeah, well, look, I think it's very hard to-- in the middle of a situation like this to really understand what's, you know, right or not right. But you've got a bunch of things coming together. One is incredible technological change-- the last couple of segments have been kind of talking about that-- and certainly the need to focus on making sure that your customers are being served in the best possible way.

So you see parts of the global economy that are starting to recover. I mean, China is a great example there in Asia. You've got lockdowns rolling in other places that are slowing things. But with the vaccine starting to be delivered, I'm very optimistic that the economy is going to come back. What's not going to come back is the old ways of doing business.

We had a tremendous amount of change over the last nine months, and whether it's how people work, whether it's remotely or in offices or hybrids, but most importantly, customers want to know that the companies they're doing business with are aligned with their values and that it's easy to do business with them. And MassMutual has been investing very heavily in new technologies to make the whole process of getting life insurance, which no normal person wakes up in the morning and thinks about-- to make sure it's as easy and simple as possible because it's so important that people's loved ones and families are protected.

JULIE HYMAN: And as we have been showing on the screen, you all have been extending grace periods, Roger. You have been helping keep policies from lapsing. But one of the other things, of course, that your customers want is to know that their money is secure, right? And so I'm curious, in a year that has seen equities, you know, really rebound strongly, are there-- what are you seeing, in terms of risk mitigation? Where are you looking for potential chinks in the armor, so to speak, out there that you're watching carefully?

ROGER CRANDALL: Yeah, so MassMutual, actually, has grown its total adjusted capital. Its the buffer we have above the reserves that we put aside to pay for all of our policy claims. And we paid $5.7 billion in claims last year, so we pay a lot of money out every day to a lot of folks. You know, our investment portfolio is largely investment-grade fixed income. We do have some equities, both private equity in real estate and some public equities as well.

So we always take a very long-term investment approach. Our average policy is on the books for somewhere between 50 and 60 years. In fact, our oldest policyholder today is 103, and she bought her policy-- or her parents probably bought her policy for her because was 11 when it was issued, 92 years ago. So when we talk about a long-term business, we're in another whole world of long term.

So we're constantly looking for ways to add some value without taking a lot of risk because we have to own largely investment-grade bonds and fixed-income instruments to back our portfolio. You know, equity markets kind of go up and down. But I'm a firm believer, over time, innovation and productivity gets rewarded.

So I think people absolutely should own equities for the long term. But we think it's also really important that people are prepared for things that could go other ways. And again, that's where permanent cash-value life insurance is really, really important.

MYLES UDLAND: All right, Roger Crandall is the CEO at MassMutual. Roger, great to talk with you this morning. Have a great holiday season. We'll talk to you next year.

ROGER CRANDALL: Thanks for the opportunity to be here. Goodbye, now.