For the better part of two years, Marianne Harrison has been running one of the country’s biggest life insurance companies from her South End condo.
During the throes of the pandemic, Harrison, who is chief executive of John Hancock, tried to return to her corner office in a Back Bay tower but could never get herself to stay a full day. With everyone still working from home, it was too quiet.
“It was kind of depressing,” she acknowledged.
So back she went to a nook in her living room and later a workspace in a spare bedroom. But now there are signs of life beyond the home. Harrison recently reopened the offices on a voluntary basis for about 6,000 employees, with a formal return to a hybrid workplace in early April. She logged her first full day back on Feb. 28. There were only two other folks on her floor, but a couple of days later, dozens of people hired during the pandemic traipsed through the Boston headquarters on tours. They were among just over 1,000 employees who have joined the company since March 2020.
There were balloons in the lobby and people hugging, but Harrison understands the excitement is not universal. While most employees are vaccinated (and those who aren’t must go through weekly testing to go into the office), COVID-19 still weighs heavily on those with unvaccinated children or who care for elderly parents.
She plans to go on a hybrid schedule of three days in the office, and expects that the majority of employees will do the same. But Harrison doesn’t want anyone to feel pressured to come in.
“We just have to be conscious that everybody is a unique individual,” she said recently, sitting in the conference room next to her office. “It’s great to have policies … but you have to look at each situation on its own because they’re all going to be different, and we just have to do whatever we have to do to make it work.”
For many CEOs, “making it work” sums up the past two years of managing a company during a pandemic, a feat that required balancing employee health with keeping a business afloat. Yes, leaders “threw out the playbook,” as the cliche goes. Yet perhaps what gets lost is that while COVID-19 may have crushed businesses in sectors such as hospitality and travel, other companies did more than survive. They thrived.
They flourished not only because of record-low interest rates and massive government relief that kept money in consumers’ pockets, but also by becoming more efficient and focusing on a new way of working that grew revenue and profits even in uncertain times.
Remarkably, corporate profits were up 20 percent over the past year through the third quarter of 2021, according to Moody’s Analytics, the most recent period for which numbers are available. Sales for some businesses remain so robust that they can raise prices for goods and services faster than their increase in costs. (Doing so also exacerbates inflation, but that’s a subject for another column.)
“Corporate America has navigated the pandemic extraordinarily well,” Mark Zandi, chief economist at Moody’s Analytics, said in an e-mail. “Despite everything from COVID to the Russian invasion, American businesses are as strong as they have ever been.”
When the virus ground the world to a halt in 2020, two schools of economic thought emerged: It was either a temporary disruption or a preview of our future. Anne-Marie Slaughter, chief executive of the New America think tank, saw the latter. She wrote presciently in a March 2020 New York Times op-ed that the economic and social fallout of the virus would be “a time machine to the future. Changes that many of us predicted would happen over decades are instead taking place in the span of weeks.”
From grocery delivery to telehealth, we can all think of how COVID accelerated trends that were already underway. It was no different at Hancock.
Harrison, who took the helm in 2017, has been charting a digital transformation of the life insurance business, including investing over $850 million globally to upgrade legacy systems. She figured it would take years for customers and distribution partners to adopt new technologies.
But consider what happened to the dense practice of underwriting, the process by which companies assess the risk of selling an insurance policy or lending money. Before the pandemic, about 4 percent of Hancock’s underwriting was handled online, from application to medical record verification to issuing the policy. If the company could double the adoption of online underwriting in a year, “that would be a big achievement for us,” said chief information officer Len van Greuning.
Hancock blew past that goal when COVID limited in-person transactions. Today, nearly 40 percent of the company’s underwriting is done through the Internet.
As for everyone working from home, Hancock could do so seamlessly because each employee has a laptop and about 30 percent of the workforce had been working remotely at least part of the week before the pandemic. Plus, Boston winters long readied the entire company to work from home when necessary.
“We get the snowstorms ... so as an organization we really prepared that 100 percent of our staff can work remotely at any point in time,” said van Greuning.
And while it wasn’t apparent at the beginning of the pandemic, it became clear by the end of 2020 that the virus would be good for the life insurance business. COVID made people contemplate their mortality. In 2020, the industry set a record, with $3.3 trillion in policies purchased, according to the American Council of Life Insurers.
Harrison had bet big on Hancock’s “Vitality” program that rewards customers with discounts and Apple watches for having healthy habits such as exercising and eating right. When customers live longer, that’s good for insurers because they can collect premiums over a longer period.
When the pandemic struck, Hancock was well positioned with a user-friendly product. Overall insurance sales at the company surged to $628 million in 2021, up 18 percent from $530 millionin 2019, driven by Hancock’s Vitality line, which grew 34 percent in 2021 alone. (Hancock is the US subsidiary of Manulife Financial Corp. of Canada.)
But Hancock’s success wasn’t just about being in the right position at the right time. By the middle of 2020, Harrison began to look at ways to shore up the business. A volatile stock market worried her because the insurer also makes money as a fee-based wealth and asset manager and relies on investment income to pay out insurance claims and fund company growth.
“We looked at the business and said, ‘OK, what are the things that ... maybe we should stop, and get really focused on what we’re good at?’ ” Harrison recalled.
One priority that got put on the back burner as the pandemic worsened: selling insurance directly to consumers. By the end of 2020, it was clear that would be a slog and that Hancock should continue to have independent brokers and financial planners sell almost all of its insurance.
“That’s something that’s going to take a long time to develop and maybe now’s not the time,” said Harrison of its direct-to-consumer strategy.
But something else happened during the pandemic that propped up productivity and profits: CEOs connected with employees on a human level.
With meetings going virtual, employees working from home probably got to see more of their company’s leaders. Jonathan Pearce, a principal at Deloitte Consulting who leads workforce strategies team in the US, said companies that did well during the pandemic experienced an “unshackling of senior leaders from the constraints of the conference room” and that can make workers feel “connected more to the mission of the organization.”
At Hancock, employees got to see a different side of Harrison, especially when the executive team started to make home videos. In one video, employees learned how Harrison spends her Saturday nights: making homemade pizza from scratch using her Italian grandmother’s dough recipe. In another video, she showed up at the Reading home of an employee last June to surprise her with a Peloton — the top prize in a company contest.
“The experience was so surreal,” said the winner, Tina Yan Liu, a manager in the finance department, who last remembered meeting Harrison in an elevator a few years ago. “I was so happy. I don’t really care about the Peloton.”
The most surprising thing employees learned about their CEO? Harrison said few people knew she has four grown children. She had long compartmentalized her personal life.
“I always felt that it was important to separate my work from my family life,” she said. “When COVID came, it was amazing how much it resonated with people to see me as me, and just to see that I am struggling just like they’re struggling.”
For Harrison, the pandemic’s most indelible mark was teaching her the value of listening.
“Really understanding circumstances and what motivates, what engages, what drives our employee base,” she said, “a lot of that comes from listening to what they have to say.”
Shirley Leung is a Business columnist. She can be reached at firstname.lastname@example.org.