In this episode, we hear Amanda Turcotte talk about getting into the health insurance industry, her past life at AXA, her current job at Brella, and how they are changing the lives of average Americans.

For the full show notes, head on over to:

https://www.salaryfinance.com/us/podcast/Amanda-Turcotte-Addressing-the-Problems-of-the-Present

Anita Ward 0:00

Welcome to Working On Wellbeing, where we share stories of purpose-driven people doing good in the world. We'll meet change agents, entrepreneurs, students, teachers, and big thinkers to learn about their wow moment and how it got them to where they are today. This show is brought to you by Salary Finance. And I'm your host Anita Ward, cultural anthropologist, and Chief Development Officer at Salary Finance.

Amanda Turcotte 2:38

Thank you a lot. Definitely a great way to start the year.

Anita Ward 2:43

Maybe we'll be able to work out this major resignation together. But, before we begin, you must understand that you are unlike any other insurance executive. I understand. I also rose through the ranks of the insurance industry. So, if you don't mind, I'll just say a little bit about your pedigree, and then we'll go into the backstory. Amanda was Chief Product Officer of Ostraa before joining Brella, which I believe is now resilient, right? They were the first mobile, mass market, and values-based insurance firm in the United States, which is quite incredible. It's truly groundbreaking. She previously worked at AXA US as Employee Benefits, Chief Actuary, and Head of Underwriting, and I believe you worked at Chubb and Prudential Financial, and she's also a fellow of the Society of Actuaries. So this is a woman who works with statistics and people, and she moves between startups and corporations with ease and grace. And what I figured I'd do, Amanda is that before we get into the purpose of well-being, perks, trends, and underwriting, I'd like for people to get to know you because I enjoyed hearing your story. So I was hoping you could give us some background on Amanda the person, not just the CIO, and tell us a little bit about how you grew up, perhaps some of your early influences and experiences, and how it shaped your purpose and where you are now? Is it a good place to start?

Amanda Turcotte 4:15

Sure. So I grew up in Alabama, as did both of my parents, who have been Alabamians for decades. My roots run deep in the south. Both of my parents worked for huge corporations. My mother worked as a pharmacist for a large hospital system. My father worked for the US Army Corps of Engineers as a civil engineer. So, like many other Americans, I grew up with ideals instilled in me by my parents and grandparents, who worked for large corporations and made regular payments to their retirement accounts, stayed with their employers, and cherished the employee perks provided by those corporations. So that's my history, but there's no slide here that says Entrepreneurship, which I believe is a great benefit to individuals who grew up in that atmosphere since knowing how to start a business is a major thing. But, certainly, I went to college with the expectation that my course would be in a huge corporation. Economics was my major.

Anita Ward 5:18

You went to the University of Alabama, right? Because you and your family have been born and grown in Alabama for generations.

Amanda Turcotte 5:23

It was, indeed. Roll tide all the way. So, I went to the University of Alabama and majored in economics and French linguistics, neither of which led to a particularly obvious job path. I wasn't sure what I really wanted to do. But I knew I enjoyed the subjects. So, as a college student, you major in your interests, but when I was in college, I made some intriguing life decisions. I actually eloped at the end of my first semester of college.

Anita Ward 6:00

Your freshman year, right?

Amanda Turcotte 6:03

Oh, my freshman semester. Yeah.

Anita Ward 6:07

So you were 18 at that time.

Amanda Turcotte 6:09

Yes, I was 18. My oldest daughter was born while I was still in college when I was 19 years old. I had a family to support when I graduated. And that's not something that lends itself to furthering your education, whether it's a master's degree in economics or a doctorate in French literature.

Anita Ward 6:32

I have numerous inquiries, such as, "Did you bring your daughter with you?" or “What exactly was childcare?”, Consider all of the advantages, and you had to figure it out?

Amanda Turcotte 6:44

Absolutely. Actually, I was fortunate to have some amazing professors at the University of Alabama, and I did end up taking my oldest to some of my French classes, which we're just finishing up that last semester. And she was being held by my French professor as I was taking my final exam. Bouncing her around the room.

Anita Ward 7:12

That’s awesome.

Amanda Turcotte 7:14

Anita Ward 8:11

Was that a pivotal event for you? Because, as you stated, you chose French and economics because you are passionate about them. However, there is no evident intuitive relationship between the two. But we all have this moment, I had it with anthropology, I thought I was going to get a business degree and ended up as an anthropologist, right? So there's this kind of tipping point when you say, “Oh my gosh, something happened,” how did that talk or those academics affect this? And was that a key moment for you, or were there a series of small events that brought you to your current path?

Amanda Turcotte 8:52

That, I'd say, planted the seed. At the time. I guess I was in survival mode, like a lot of American households. I had one child and was about to have another one. When I finished college, I was pregnant with my second child. It was a little bit of a roller coaster for a few years. I actually moved up to New York and got my first job at a big insurer in New York, while before my second daughter was born. I did the actuarial student program thing for a long time, taking exams, learning the basics of insurance working through a rotational program with some great companies like you mentioned Guardian, Prudential, Chubb, and having those rotational programs allowed me to see these companies through a variety of lenses. I worked with dividend calculations, reinsurance, and got to make those reinsurance relationships work in overseas operations and discontinued operations, where you get to experience a diverse range of businesses. The company was once the driving force in the company, but it may no longer be so. However, insurance firms must continue to manage and care for those businesses since customers continue to rely on the insurance carrier to satisfy their regular insurance needs, thus all of those experiences are merged. And I was head down, eventually getting divorced from my first marriage. So I was a single parent with three kids at the time, working to support them, which I know is a situation that many people find themselves in, but I had gotten to the point where I had my fellowship and could finally take a breath in my profession. I was working in reinsurance at the time and realized, "What am I doing?" Every day, I'm constructing tax shelters for the wealthy, as well as individual life reinsurance. This isn't what I'm looking for. This does not resonate with me; it does not resonate with the challenges I face daily as a single mother of three children. But it's still a struggle, and what is my insurance company doing to help ordinary Americans and our insurance needs? So there was my moment when I realized, "Wait a minute, I'm going to do something different with my career.”

And that included health insurance. So you're dealing with life insurance. The first guy who sold me life insurance and I bought it because I felt obligated to have it since he made me feel guilty about having a boy, being a single mother, and having all of this. And I had no notion, Amanda, of what I was even paying $400 a month for, and this was a long time ago and was a lot of money. And I was convinced that I had to have it. But it was because I didn't understand it. So you're dealing with people like me, agents, and various sorts of insurance, including health insurance, and this is going to sound old, but when I first got health insurance, I think it was $500, right? And now it's like thousands. And I'm not sure how people do it.

That is a change that has not occurred. You don't have to be that elderly to remember the days when a $500 deductible was the norm. I believe that when High Deductible Health Plans first became available, less than $1,000 qualified you for a high deductible, however now that is an average deductible or less than an average deductible. Right? The market has altered dramatically. I recall seeking rate hikes for a closed block of health insurance in my early twenties. And I'd write to the states and explain that the medical trend was 8%. So, like an actuary, I'd look at the bet history and say, "Well, it's been 8% for the past five years. It's going to continue for the next 15 years.” And the state would write back and say, “You have to drop your projections because that's impossible. It can't possibly continue at this pace forever.” And can you guess what we're saying? Wow, that has an effect that will last forever if it continues at this rate.

So you didn't leave. And with three children, you couldn't truly self-reflect in some spot somewhere. So, how does that look? And how did you come out of it? I'm sure it was just a little period, but having children and being single is difficult. How did you pivot?

I have to say, having the luxury of a New York City commute, where you're forced to live with your thoughts for 45 minutes, or an hour a day, on the train, is a pleasure.

Right. I've been there, I’ve done that. I totally understand.

That's your daily necessary spot for self-reflection, especially in the days before early iPhones or having your business email at your fingertips 24/7 and being able to play Candy Crush or subway surfers anywhere you wanted. Back in the early to late aughts, we had to deal with our thoughts while we were on mass transit.

So, how did you come out of it? So, after all of these train travels, where did you end up?

So I took advantage of the opportunity to consider what else I like about working at AXA. My spouse and I met by chance at AXA. When we got married, AXA provided half of our wedding party. So, we have really deep roots there. It's a fantastic firm and it is now equitable here in the US.

Do you believe it is due to consumer education? I mean, people simply didn't know or understand.

I've created a variety of new and unique products. And with each one, I've learned something new, so I believe with that one, in particular, I've learned the value of being truly connected with your distribution plan. And, before you build the product and the process for applying for and delivering it, you must communicate to and truly understand the distribution. So that was the beginning of my interest in exploration and learning, as well as conducting extensive research prior to building a product based on that job. I went on to lead product pricing and underwriting for AXA's group benefits division, as you mentioned. I had been trained as a group life underwriter or actuary, but I had developed my individual life talents while working for a company that had no business at all.

You are paving your own path.

Yes, I have a lot of expertise with individual help, individual life, group life, and group help, which is unique for an actuary. So, when I'm designing a product, I can sort of combine all of those pieces, all of those different types of business lines, and find the best solution.

But it fascinates me, Amanda. Because it almost makes me think of your economics and French background. Because that is a completely different method to deriving patterns and looking across a group before looking down at an individual. It's almost anthropologist-like. So it fascinates me that it's an actuary's brain, because it's not just that, and then you're looking at human behavior behind all of that. It's rather fascinating.

Yes, and I think that's one thing - and I wrote about it in an article published by the SOA, Society of Actuaries - we focus as a profession so much on the quantitative aspect of the product, when it only drives a fraction of our results, but the quantitative drives result once the product is sold, but it doesn't drive results to get the product sold. That is the qualitative part of our product, which must function with a product or it will not be successful.

Everyone else thinks the day-to-day to data and qualitative sciences, like my own, or sometimes not even called science, right? So you're talking to people, you have some focus groups and interviews, but I guess what I hear you saying is that you're bringing all of that together and that even greater dependence on qualitative is sort of a Human-Centered Design Thinking in many ways, right?

Yes. And I had no idea what human-centered design was when I worked in a huge corporation. I initially learned about it when working with some fantastic FemFinance researchers who specialize in qualitative research and in-depth interviews, and I was fortunate enough to sit in on those interviews. As a product specialist, my responsibility in those interviews is to sit quietly in the corner. And if a technical issue arises that tends to disrupt the conversation, I step in, provide a clear, succinct answer that addresses the query, and the interviewer can continue doing what they do best: driving towards solid qualitative data.

But it's so difficult to listen. It's difficult not to want to solve the problem while you're there, especially when your role is to merely listen. And that is quite difficult.

Yes, I concur. I believe it was more difficult for me when I was younger. But I have to confess that being the mother of a huge brood has helped me with my tendency to sit and listen rather than solve problems.

Amanda, how large is your brood now?

The last time your viewers met my brood, I told them about my brood. That was three when I got divorced when I was younger, now it's seven.

It's amazing.

Yeah, I had Teddy on December 1st of last year, so he's a year old already. Brella was about a year and a half old at the time. Teddy was conceived. And, believe me, there isn't a lot of room for maternity leave at a startup. But that's fine.

I was just telling Sarah that when I delivered my son, we were granted four weeks off. And that was it. Then you returned to work. So I would have preferred to have had ten. I'm so Italian, I'd have loved to have had ten. But, as much as I adore my one and only Tommy, seven sounds incredible.

They are a lot of fun.

Part of what I hear you trying to solve, Amanda. Salary Finance uniquely approaches the problem. I mentioned how high my deductibles are now. However, I have an employee who required an MRI for his son. It's entirely unexpected. He plays soccer and injures himself. And that was a couple of thousand dollars. And we solved it by offering a personal loan to help consumers afford their deductibles. However, according to the data, more than a third of those funds are used to cover unexpected medical bills. So, I believe we should work together to address this problem. One of the testimonials that we have is for my broken tooth. I don't even think about that and broken arms, kids, or MRIs. And I know that part of what you're doing at Brella is to innovate to solve this problem. So let's get started on the Brella story. But I believe Laura may have told me this. But is it true that a 6 a.m. text was received to join Brella? Is there a story behind this?

Well, that's the only time I get to go to the gym, actually. But actually, those cracked teeth would be covered by Brella. And, after listening to people throughout my time at startups, I started my own consulting firm where I worked on these human-centered design engagements for insurance carriers, brokers, and all kinds of clients trying to solve insurance challenges and value qualitative research. However, hearing people talk about financial troubles resulting from medical surprises was one of the concerns that came to mind as a potential to innovate. When Veer Gidwaney, the founder and CEO of Brella, texted me at 6 a.m. and said, "Hey, a friend recommended I should reach out to you if I need to design a new insurance product.”

Wow. So it's all about the design. That's fantastic.

So I agreed right away and suggested we chat about it. So we talked on the phone, and he told me that the current world of supplemental Health Benefits has three primary categories. Accident, critical sickness, and hospital indemnity are all available in various combinations; some organizations have access to all of these, while others may just have one or two on their platform to give to their personnel. But, if you look at the statistics, none of them are particularly appealing because they are not implemented. You get double-digit involvement if you're lucky across all three, right? Participation is frequently in the single digits in terms of percent, which does not scream compelling product. But he also has to listen to his distribution, who truly believes in the product and knows the data value and issue those products are attempting to solve. People incur unanticipated medical bills. If they have to go to the emergency department, or if, God forbid, they have to be admitted to the hospital. If you're suffering from a catastrophic ailment, right? Each of those issues addresses that need. Meanwhile, I was tuned in to that abrupt, unexpected financial shock, just like my background and micro-insurance or inclusive insurance. That is what is causing the financial difficulties. When we have anticipated financial expenses, those are items that a household can budget for. They may either find, derive new sources of revenue, plan their expenses, arrange their budgets to fit those bills. **But if something unexpected happens, like a tooth crack, you're not going to reorganize your budget for the next five months and pay for the cracked tooth, are you?** That is simply not going to happen. You can't talk on the phone with a cracked tooth because it aches so much. So expecting people to incorporate things into their usual budget is simply impractical. And when you experience abrupt, unanticipated financial shocks, insurance is the right place to be. The problem with the market products, right, is that they still expose buyers to their underlying risk. That sounds extremely actuarial to me. So what I mean is, if I have a critical illness product, that's fantastic, right? For example, I now have coverage if I have a heart attack, cancer, or a stroke, but those are not the only conditions that could occur to me and have a significant impact on my money account. I could develop appendicitis. I could have diverticulitis or sepsis, right? All kinds of things can happen to us, with this sensitive human body of ours that results in massive medical bills. So the question is, how do we produce a product that is more extensive in that coverage without effectively leaving people to play condition roulette, where they spin the wheel of chance? And is it possible that their ailment will be covered? Perhaps not? Right? Brella's purpose is to be comprehensive, and there will be no more games. If you have a condition severe enough to cause sudden, unexpected, material, financial shock, Brella will cover it.

How many conditions are in your product?

We use the International Classification of Diseases, which is incredibly thorough and contains thousands of illnesses. And breaking your right arm is not the same as breaking your left or right arm. Your pointer finger is distinct from your left ring finger, and so on. However, we cover 13,000 medical conditions in total.

So we've seen in the claims that we're processing that people really like how broad this is. If they have a condition that affects their household, they make a claim, and it's covered. So it's quite fulfilling to know that we're assisting families daily with a product that finally understands that. It's not just a few circumstances. It's not just like you mentioned; an MRI is a significant cash outlay. And you haven't been admitted to the hospital. These costs are being driven by more than just hospital admissions. It used to be when our deductibles were $500.

I remember thinking as a woman that the only thing you truly thought about was when you were going to have a baby. Consider all of the numerous health issues that women encounter in particular. And so, now that you have the cover, the thought of having hundreds is quite wonderful. Is it necessary for you to file this? I'm assuming you file as a standard insurance product in each state and still have to go through it.

Absolutely. That is my product development experience. For a long time. We won't tell how many there are.

That's a couple of years with seven children.

But I've filed individual health goods and individual life insurance. For years, I've met with regulators from all 50 states, and my interactions with them have always been fruitful. They are concerned about the customers in their state. There, they encounter complaints from consumers who don't understand insurance products on a regular basis and provide that feedback to insurers who are filing products, and the product approval process is one approach to include that into our product. So, I mean, I believe our product has improved since we submitted it. States have provided positive comments. The back and forth might be a little annoying at times.

They are so kind and lovely.

As I said, I find most really are. It's a nice combination of business, industry advancement, and consumer protection. And we collaborate to create a product, but a product and market that truly meets both of those demands. It's fantastic, in my opinion. Not to add, they value the opportunity to work on behalf of the consumer. Right.

What method do you use to go to the market? Is it a business-to-business or a business-to-consumer transaction? It has to be a business-to-business transaction.

Yes. So we're in the group, employer benefits category. As a result, we're working with brokers and strategic partners to provide our product to all of the members out there.

That's amazing. Who are some of your customers? Is there a representation group? Is there a sweet spot? Are they high-profile customers? Are we completely disrupting the industry?

Totally disrupted. We've had employers ranging from thousands of cases to less than ten lives, and all different SIC, or business types, are represented in that mix; it truly spans the market. I often recommend that if you have less than $20,000 in the bank, you should get the Brella product. Because, even if you've saved $5,000, do you really want to put it all on the line for a hefty medical bill?

[inaudible]

Certainly not. And that is an even more precarious situation.

What does a typical cost look like? Is the price $1,600 or $1,800? Or perhaps anything in terms of a typical deductible?

I believe the average is a little misleading because there are some huge firms out there who skew that low. I believe the range extends up to $5,000 deductibles, although deductibles of $2000 to $3,000 are not uncommon. Even if your deductible is under $1,000, you should consider the size of your network. And what your out-of-network coverage is because your out-of-network deductible, as well as your out-of-network maximum, is not governed by the ACA, right? When you consider what your out-of-pocket maximums are, and how the ACA cap of 5000 or 6000 per person raises each year based on inflation, it only pertains to in-network coverage. Out of network, you can have a $20,000 to $25,000 annual maximum, which leaves people with some significant risks when the network adequacy and their area aren't very good. It's one of the issues of how our medical system works, and **we have to live in the reality of the present. While we may wish to tweak it and may discuss some ways in the future that we would like this system to be different or changed in some way. There are valid reasons to do so. That doesn't take away the difficulties that people encounter on a daily basis. And it is with this in mind that Brella is addressing the problems of the present.**

So, if you consider that, everything I hear you saying is that you put people first, which is how you've developed Brella and which is one of your own passions. So I took a step back and thought about it, and I had to ask myself, "What's next for Brella?" Because what does it look like for Brella if you're just solving people's problems? And what does that look like for Amanda as you consider what comes next?

I was chatting to my team this morning about Brella, I believe. We're four times the size we were at this time last year. I anticipate that it will be even larger next year. We expect massive growth in 2022, and we've established a solid foundation, not only on the product filing, underwriting, and claims process, which is sort of my specialty. Our platform team, on the other hand, brings enormous power on that front. And, without a doubt, our sales and distribution staff is crushing it every day, bringing the Brella story.

Great story to tell.

Without a doubt. I'm really looking forward to 2022. I'm sure anyone who has established a business understands how much labor goes into growth, right? You can't expand unless you do the work and lay the groundwork. So we've arrived at that stage where we've laid the groundwork and are ready to take off. That is a mixed metaphor. I’m sorry for that.

My mixed-up brain can easily relate to that.

Yes, perfect.

I'll give you one crazy question to kind of leave you with, but you mentioned being 18 years old, you were off getting married and having a baby, what would that 18-19 year old Amanda be most happy to hear about the Amanda of 2022?

Actually, I think I'd be most excited about two things. The first is that I learned how to develop a business, which I consider to be a big talent. And I'm completely ecstatic. It feels so empowering to be able to have an idea. I believe that many people have fantastic ideas, but they lack the knowledge or abilities to turn such ideas into profitable businesses the first time. And it appears to be overpowering. But then you realize, "I could do this the second time.” And the third time, "This is what we did the last few times. This is now what I do.” So I believe I'd be overjoyed with that. The second point is how I've returned to the core of behavioral economics, which is something I enjoy doing in the first place. And I majored in it in college with no idea what I was going to do with it. **But, at its core, economics is simply being curious about the decisions individuals make without passing judgment on them.** Is it a good or terrible choice? It doesn't matter; what matters is making the decision, understanding why, and appreciating that line before delving into the implications. Every day, I believe I find that fascinating. Why do people make the decisions they do? **Where do they have hurdles, and how can we remove them to empower them for future success? I love that what we've done at Brella can help people a little bit along that route**, and I can't wait to see what we do in the future.

Amanda, I admire your work. And I imagine cooperative research or something in the future for the two of us when we're both getting ready to climb the second or third mountain. So I'm extremely appreciative of everything you've done.

I truly appreciate everything you've done. And I enjoy meeting disruptors, and I know how valuable your time is. So, thank you for your authenticity and for sharing today. Most significantly, for assisting those of us on the qualitative side to gain some street cred here. So, as an economist, thank you for mentioning the quality sciences. But, most importantly, I admire everything you do and your dedication to putting people first, so thank you for visiting us today and sharing your story.

Thank you.

Thanks for joining us for today's episode of Working On Wellbeing brought to you by Salary Finance. I'm Anita ward. At Salary Finance, our mission is to improve the financial health of working Americans by providing access to socially responsible financial products in the workplace. You can learn more about how you can partner with us to help improve your employee's financial well-being at salaryfinance.com. Don't forget to subscribe or follow so you don't miss an episode.