Milwaukee-based Catholic Financial Life will promote John Borgen to president and also plans to select Borgen to become chief executive officer for the life insurance company in 2022, the company announced today.
Borgen, who is currently senior vice president, will become president on Jan. 1, 2021. Bill O’Toole, the company’s current president and CEO, will remain at the helm of the fraternal insurance organization throughout 2021.
“I have full confidence that John is the best choice to lead Catholic Financial Life,” O’Toole said in a statement. “He knows where we’ve been, and he’s excited and passionate about where we’re going. He’s a team builder and brings a ‘can do’ attitude to the position. John’s passion for our faith-based mission is unmatched. He exemplifies the values of our organization.”
Since 2009, Borgen, 41, has held ascending roles of increased responsibility at CFL including fraternal director, vice president of fraternal, vice president of fraternal and member services as well as senior vice president of membership.
"Bill has built the leadership team, revived our faith-based and community-focused mission and established record financial surplus … that is his legacy," Borgen said in a statement. "It is now up to us to seize the opportunities to help even more people enjoy financially secure, purposeful lives. No one has had a greater impact on my career than Bill. He provided me with challenging opportunities and helped me to grow as a business leader. I am ready for this opportunity because of the personal investment that he made in my professional development.”
CFL is a member-owned fraternal insurance organization with members across the United States and more than $1.7 billion in assets.
BizTimes Milwaukee recently spoke with Borgen about Catholic Financial Life, the life insurance industry and the impact COVID-19 has had on the industry. The following are portions of that interview.
How has the coronavirus pandemic impacted the life insurance industry?
“The reality of mortality. We are now over 280,000 confirmed deaths directly attributed to COVID. Contrary to what you may hear in some circles, the Centers for Disease Control has indicated that that figure if anything is an understated figure.
“The second impact on the industry is this COVID-induced or compounded recession and broader economic picture and what that has done in terms of downward pressure on interest rates. As you know, life insurers are long-term investors. We tend to invest in safe, secure and high quality fixed-income securities. We’ve been operating in a low interest environment for the last decade and this year, we went from low to almost lower than low. That’s had an impact on every life insurer’s portfolio.
“The third thing is the impact on distribution. Not so much COVID-causing but COVID-accelerated changes that were already underway in terms of distribution.”
What changes in the life insurance industry are consumers experiencing right now?
“One change unique to COVID I would say is the increased awareness about the importance of life insurance. Unfortunately, ownership of life insurance in the United States, individual ownership, is at a 40 to 50 year low. It’s about half of the population that has some sort of life insurance coverage. That combines what they may have at work as well as what they own individually. When there are life events, getting married, buying a home, changing a job, those are triggers that cause people to buy life insurance. Well, another one is the death of someone in their family or a friend. I think there is a greater awareness of our mortality.”
“You look on Facebook and you see people posting gofundme campaigns in order to be able to pay for someone’s funeral or to help out a family. Had they spent a little bit of planning for a couple of dollars a day, they wouldn’t be in that position. As we emerge from this pandemic, it will be really interesting to see what sort of staying power there is in consumer’s minds for the recognition of that awareness. As people in their 20s, 30s and 40s experience death of family and friends, perhaps folks who are middle age are realizing death just doesn’t happen to people who’ve lived a good long life.”
“We talk about life insurance as the last love letter you leave to your spouse. I know there are 280,000 people who entering this year, they weren’t planning on dying this year. I hope that’s one of the things that does fundamentally change as a result of COVID. People’s awareness and desire to take action.”
Is it a good time to buy life insurance and has COVID impacted the pricing of policies?
“I can’t speak for the industry as a whole regarding pricing, but I can say at Catholic Financial Life, our pricing has not changed on our life insurance products as a result of COVID. I think it’s a great time for people to buy life insurance because hopefully, there’s some promise with this vaccine, but we need to get it distributed, we need people to participate and that’s going to take some time. The time to buy life insurance is when you think you don’t need it.”
“One of the reasons people don’t buy is because they way overestimate the cost. Recent research from LIMRA indicates people overestimate the cost of coverage by a factor of three.”
What is on the horizon for Catholic Financial Life?Borgen discussed how Catholic Financial Life and Catholic United Financial have formed a joint venture called Conventus Now, LLC, which serves as a vehicle for the two insurers to develop and operate tech solutions used by both organizations. Conventus has selected iPipeline, a provider of cloud-based software solutions, as its tech partner.
“It’s everything from quoting to illustration, application, underwriting, workbench, policy issuance, e-delivery, ongoing policy administration and claims with new portals for our advisors as well as our members. That’s a huge undertaking for any insurance company. We will be putting both all new business on that platform as well as running all of our legacy business on our platform. There are two companies doing it at the same time. That’s going to lead to a shared services model so that we can get the synergies and economies of working together."