When Chris Blunt was 16, his family moved to Iowa and he spent several summer vacations loading trucks for a beer distributor in Waterloo. That was the extent of the Michigan native’s Iowa connection — until his insurance career brought him back to Des Moines to lead annuity and life insurance company F&G. In early January, Blunt began his new role as president and CEO of F&G, which is the rebranded name of Fidelity & Guaranty Life. The company was acquired in 2017 by an investment group affiliated with private equity giant Blackstone Group, which through its equity funds now owns about 20% of the stock of F&G’s parent company, FGL Holdings, which is based in the Cayman Islands. Conversely, the majority of F&G’s $26 billion in assets under management — policyholders’ retirement nest eggs in annuities — are now managed by Blackstone. Blunt, who replaced former CEO Chris Littlefield, came to F&G from Blackstone Insurance Solutions in New York City, where he was senior managing director and CEO. Before working for Blackstone Insurance, Blunt held several senior leadership positions for more than a dozen years with New York Life, where he led the company’s investment group and earlier its U.S. life insurance operations. In the last 12 months F&G, which is based in downtown Des Moines with an office in Baltimore, has brought on 75 new hires and it expects to surpass 200 employees locally within the next six months.  

How would you compare your new role with F&G to what you were doing at Blackstone? 

I would say it’s probably most similar to the role I had at New York Life. For the bulk of the time that I was at New York Life, I had oversight responsibility of our annuity business. So the whole retirement theme and annuities has been consistent in my career. I was hired by the folks at Blackstone to really help them navigate the insurance space. They had found themselves in a position where they were managing a lot of assets for insurance companies, about $50 billion. They saw that they had a big opportunity to grow and add value, but realized they didn’t have a lot of inherent insurance expertise. As part of that, I got to know the senior management team of F&G, since they were our largest [client] and we still are Blackstone’s largest client globally. 

The Wall Street Journal in May wrote about Blackstone and F&G’s strategy to buy blocks of annuities as part of Blackstone’s goal to double its insurance assets to $100 billion. Tell me more about that strategy. 

We’re about $26 billion [in assets] as a classic life and annuity company. Our primary products are both indexed and fixed-period annuities. We also have an indexed universal life business, which is growing pretty rapidly right now. So I would say the primary mission of F&G is to continue down our current path, which has been growing our sales at 30 to 40% per year. As we get bigger, obviously, that growth rate will slow a bit, but we still expect to grow better than the market. So that’s the first opportunity. The second [opportunity] is, we have been — along with [other companies] — out bidding on both closed blocks and open blocks of annuity business. And then the third [opportunity] is, at some point is probably outright acquisitions of other companies.

Why is the relationship with Blackstone critical to F&G’s growth? 

When you think of Blackstone, you think of alternative investments, private equity, real estate, hedge funds, that type of stuff. That’s a small part of it — about 5% of our assets. Really where Blackstone comes into play is that they’re the largest originator of debt in the world. So their portfolio companies — whether it’s real estate, a company, an aircraft lease or issuing debt securities — a good chunk of those are investment-grade, and some percentage of those are really attractive to insurance investors. What’s critical is they’re not just a manager of fixed income, they’re an originator of fixed income. … So having a partner that can source attractive investment-grade bonds to get yields over and above what you can get in the public markets is a big competitive advantage. So that’s really where the Blackstone role comes into play. Their hope is that we continue to grow, and as we do, they will manage more assets. 

How does F&G ensure it’s protecting shareholders’ best interests?  

An important distinction is that Blackstone itself doesn’t own any shares in Fidelity & Guaranty. It’s two of the Blackstone funds that they manage [that own the shares]. And there is only one Blackstone person on the [F&G] board, and his interests are fully aligned with mine, which are to increase the returns of shareholders of Fidelity & Guaranty. … My chief investment officer, Raj Krishnan, who works directly for me, is responsible for the overall asset allocation of the portfolio, how much goes into each of these different asset classes. He’s responsible for setting the risk parameters. Yes, I think if you had an asset manager who had complete free rein to go wherever they thought the best risk-adjusted return was, that may not always line up with the risk posture of a conservative insurance company. 

Tell me about F&G’s niche in the retirement income space.  

We’re a pretty mission-driven organization. If you think about sort of our core products, we’re trying to help replace pensions and help people put themselves in a position where they have some level of guaranteed income. And particularly now, as interest rates keep dropping, I think it becomes even more attractive. We talk all the time about the old rule of thumb that you shouldn’t take out more than 4% of your savings if you don’t want to outlive your assets. The reality is, in this interest rate environment that number is probably closer to 3%. And the vast majority of people can’t live off 3 to 4% of their savings. That’s not because they haven’t done a good job, it’s just that it’s not a lot of income. 

So some form of annuities, where you can get the benefits of annuitization, really just becomes mission-critical. I think the other [advantage] is just an efficiency play. You know, at my prior firm, we did some research that showed that you can tie up 30% fewer assets and generate the same level of guaranteed returns [using annuities] than you could if you’re not using something like an annuity. I think for most people, the ability to give themselves some guaranteed floor of income also gives them the peace of mind to invest the remainder a bit more aggressively. 

What’s the status of F&G’s credit and strength ratings? 

The good news is we were upgraded to A-minus in November; that was really critical for us, because that’s kind of the minimum standard to play in a lot of the distribution channels. And we’ve seen a huge bump in our sales because of that. That predated me — I wish I could take credit for it, but I can’t. It’s not the end game. We’re very focused on getting to the next level, which would be straight A versus a minus. I would say realistically, that’s probably a year away. And it’s not a capital issue; it’s really the rating agencies wanting to see a longer track record under new ownership and new management. 

When executive leadership changes were announced late last year including your appointment, cost-cutting measures were mentioned. What have those measures entailed? 

Just starting at the high level, we’ve hired 75 people in the last 12 months, 23 in the last three months. And we’ve got right now about 25 open positions. So actually, from a staffing and head-count standpoint, I would imagine we’re one of the fastest growing companies here locally. We’re running out of space because of that. So we’ve been having conversations with our current landlord and looking at what our other options are. I’ve had a lot of dialogue with the Greater Des Moines Partnership, and even the governor. They’ve been phenomenal and supportive of the kind of the growth path that we’re on. So I would say on the cost-cutting exercise, that predated me, but I think that was maybe more about which every company goes through looking at what we’re doing and asking whether we are trying to do too many things simultaneously. It was definitely not an exercise in head-count reduction. Our biggest issue is — can we recruit fast enough? … We’ve won awards in both locations, Des Moines and Baltimore, for best place to work. It’s something that everybody here is pretty focused on; it’s a personal passion of mine.

What are some of the key values that give F&G a positive culture?

I’d say one is this whole notion of collaboration, which is one of those words that is overdone. People often confuse collegiality for collaboration. Collegiality just means you’re nice. But collaboration takes work. When your colleague calls you, and you’re overwhelmed with your own amount of work, do you blow them off? Do you not return their phone call? Or do you take the time to help them out? Because you know you’re going to be in a similar situation where you’re going to need their help. Like everything else, it has got to start with just a culture of respect.

Given Iowa’s workforce shortage and low unemployment, how difficult has it been to find talent, and where are you finding it? 

Great question. I would say the vast majority of the people that we’ve hired have been from insurance, but not all. Obviously, in the more senior levels, you need people that, as a rule, have expertise in the life and annuity space. It’s hard work — you don’t get every candidate you go after. And that’s kind of a new one for me. That probably sounds pretty arrogant. But generally, we go through a pretty exhaustive process where when we find someone, and we really like them and we feel like they fit, we can get them on board. We’ve had a few instances where we weren’t able to get someone because their home team gave them a huge raise and promotion. But we have been able to hire, so we are filling positions and we feel really good about the quality of the people that we’re hiring. 

What’s the head count now in Des Moines, and what’s the growth outlook? 

It’s already 184 people, and we have about 25 open positions, which I would say we’ll fill within the next six months. We made the decision a while back not to hire in Baltimore going forward. The Baltimore team knows that, and we have a number of really talented professionals in Baltimore that we want to retain. But as there is normal attrition or retirement [in Baltimore] we’ve been replacing all of those people in Des Moines. So it’s partly growth and new hires to the organization. And then also as folks [leave] our Baltimore office, we’ve been replacing them here. 

Is an office relocation or new construction on the table? 

I would say, yeah, in the next six months probably, because we’re running out of space. We’ve been out working with the folks at Jones Lang LaSalle searching for space. We’ll probably have to make some decisions soon. … [A new headquarters building] is definitely within the consideration set. The downside is that [construction] takes a while. 

Does F&G have a philanthropic focus, and have you personally chosen any organizations to get involved in? 

I would say that there’s a really strong culture of volunteerism here. It’s a pretty philanthropic place.That’s kind of my other life, and something that is really important to me. It was really kind of a nice discovery when I got here that folks are pretty passionate about that. And so one of the things that we’re doing right now is undertaking a review of the different charitable organizations here in Des Moines. There are a couple that we could really throw our resources around, not just funding, but volunteer activities also. [As for personal volunteer decisions] — I would say, not yet. But I’m close. I’ve been the chairman of the board of the YMCA of Greater New York for the last four years, and I just stepped down from that. So I’ve got a little bit of personal capacity now. So I have been searching for an organization where I could be personally very active, and my wife has been doing the same. 

Do you have any hobbies? 

I’m a runner, and so that’s been one of the cool things about being here is all the trails. That has been tremendous fun. And I would say for my wife and I, the nonprofit aspect of what we do is pretty important, so that takes up a fair amount of our time. We’re both golfers. She persuaded me to get better at skiing, and so I asked her to learn golf. And unfortunately, she beats me on a regular basis, so that’s a little annoying. n