Leadership Perspectives | 02.20.19
Candid Conversations with Jim Nonnengard: Part 1
This is part one of our Candid Conversations interview series with Jim Nonnengard, executive vice president of Regions Investment Services, Inc. and current BISA president. Click here to read part two.
I spent almost two-hours in an intriguing conversation with BISA President, Jim Nonnengard. I came away with the understanding that Nonnengard’s strong work ethic was ignited at a very early age, and that his father provided him a vivid example of the benefits of hard work. Another insight I gained: Nonnengard’s love of sports is palpable. Happy memories of spending his youth in Buffalo, playing backyard hockey, imagining himself as Bobby Orr and rooting for the Buffalo Braves basketball team came through in our conversation. I’m a Bostonian, of course, but until our conversation, I hadn’t realized that the Boston Celtics began as the Buffalo Braves! It’s easy for me to imagine Nonnengard as a professional sports announcer, a career he easily imagines he would have enjoyed.
Nonnengard entered the business through the life insurance door. That path typically imparts tremendous people skills. Those skills are palpable. I hope you enjoy the interview.
On the lack of innovation in life insurance
David Macchia: Let me start at the beginning. Where were you born? Big family? Small family?
Jim Nonnengard: I was born in Batavia, New York in western New York. I have four sisters. I'm the only boy and the youngest. I have greatest memories of growing up: going places like the Cape, Canada and the Adirondacks. My dad and mom both worked, but they always made time for us and we had great extended family of cousins, aunts and uncles.
Macchia: What was your first job? What was your first impression of it?
Nonnengard: My first job out of college was New York Life. The guy who hired me was named Jim McKinnon. His brother was the basketball coach of the Buffalo Braves, so I was enthralled because of who he was. But he was a good mentor and taught me a lot. I didn't respect life insurance then like I do now. Now, being 59 years old and seeing the uses of it, and delivering a death claim, it's humbling. I wish I knew then what I know now.
I personally think life insurance companies have done a really bad job on innovation. It's still hard to get advisors to talk to their customers about it. Everybody can say they're uncomfortable with it — they're financial advisors. But it's not transactional, it's a longer sale. It takes longer to get the policy issued. You're telling me I can't take a life insurance application on someone and within 24–48 hours there is not enough information to tell me what medicines you're on? What your insurable risk is? I know there's simplified issue stuff, but it just seems like the insurers have to make it a little bit easier for people.
Macchia: I couldn't agree more. It's primitive. It's basically the same process. It takes 4–5 weeks.
Nonnengard: A customer forgets they had a heart attack two years ago, and they're on heart medicine. Or, they don't want to tell you. It shouldn't take four weeks for it to come back from the insurance company. They'll have to improve in this regard to be competitive.
I think, as an industry, we do better than we ever have, but it's still less than 5 percent of the business. And I worry about customers and who's helping them. If you really are a customer-comes-first type of advisor, which you have to be if you're going to be in it long-term, you're going to have to put their best interests forward. Life insurance has to be part of the conversation. And I'm not even saying give it to them. Just ask them if they have it! How long ago did you pay for it? How much you paying for it? Who's your beneficiary? We see people all the time whose beneficiaries are ex-spouses and beneficiaries who are dead.
We had a 38-year-old chef at a club I belong to who was bitten by a brown recluse spider, and he let it fester. I don't know if you're familiar with those spiders: They're very soft bites — usually, you don't know you've been bitten for a day or two. This man thought his bite was a burn or a grease spot, and didn't take care of himself. The venom got into his bloodstream, and he died. He left his 34-year-old wife with two kids. He had close to $2 million in insurance. But you know who sold him the insurance? His Allstate agent — the guy who sold him his home and auto coverage. It wasn't his financial advisor.
On why life insurance is not death insurance
Macchia: When you think back on the skills you acquired in the life insurance business, how would you describe them and how would you apply them? How did these skills impact you for the remainder of your career?
Nonnengard: For me, it was getting to know the customer — it's a very personal business. When you start talking life insurance, that's a different conversation than trying to invest their $500,000. People don't like to think about dying, disability or long-term care insurance. I think everybody likes to think it's not going to happen to them. It just made me get more personable with people to take them into conversations that were a little uncomfortable. But you’ve got to know the customer really well: Talk about how many kids they have, where they went to school, dates of birth, what happens if they die.
I think a lot of advisors think of it as death insurance. It's not. They have to think of the uses of life insurance. The income. It's that 34-year-old widow with two kids whose husband's income died. Another example is about long-term care: I had a grandmother who had seven strokes before she passed away. She started out fairly well off with plenty of assets, but over the course of seven strokes and 20 years in nursing homes, she died penniless. We see that all the time. People don't plan for those kinds of events.
Macchia: How many years did you work in the life insurance business?
Nonnengard: I've been in it for 35 years.
On managing change throughout your career
Macchia: Tell me about your bank experience.
Nonnengard: Empire of America in Buffalo — The Big E — was my first banking experience. They were savings and loans, and they got caught up in the financial crisis, the old resolution trust. And that's when I went to Chase in 1987 as a sales manager. When Chase and Chemical Bank merged, I left Chase and went to Florida with AmSouth Bank as a state sales manager. In 1997, I took a job as a national sales manager in Birmingham with SouthTrust Bank. In 2004, it was bought out by Wachovia, and then I went back to AmSouth as the president of the broker-dealer. AmSouth merged with Regions Bank in 2006, and I head up the investment program at Regions.
It's been phenomenal. Alabama's been awesome to me, and I've had the great fortune to be on the right side of those mergers, progressing from advisor to a sales manager to being head of the investment program. I'm very fortunate.
Macchia: Going through all of those changes, all of those institutional mergers and transactions. You really kept your focus and are doing what you've been trained to do.
Nonnengard: Here's a funny story. Two years ago at Christmas, my sister made a decoupage piece of wood with my business cards and it said, "Guy can't hold a job, but I've never been out of work."
Find part two of Candid Conversations with Jim Nonnengard.