Putting Transamerica on the map

If a nationally-recognized insurance business with nearly 2,500 local employees can be considered a well-kept secret, Transamerica’s Cedar Rapids operation might just fit the bill.

The notion isn’t lost on Laura Wirth, Transamerica’s head of corporate development, who sat down with the CBJ for a recent conversation to elaborate on the company’s operations – and to raise the company’s profile in the Cedar Rapids business community.

“In some ways, it’s easier for a company like Quaker Oats,” Ms. Wirth said. “You have Quaker Oats for breakfast, and there’s ‘Crunchberry Days.’ It's a tangible product. Everyone can see it on the shelf. It's a little more difficult when you’re a life insurance or retirement company. You might see us if your company happens to have a retirement package or 401k package through Transamerica, or you have a life insurance policy, but it's not like we're on the (retail) shelf in a Target or Wal-Mart. It’s a little more difficult to get your name out there.”

But with a newly-announced corporate focus on accelerating Transamerica’s growth and the company’s firm commitment to local operations, it’s safe to assume Transamerica’s profile in the Corridor is set to rise in the coming years.

Through organizational changes, company has long history in Cedar Rapids

Located at 6400 C St. SW, just north of Kirkwood Community College, Transamerica shares a 180-acre campus along C Street SW with its corporate parent, Aegon, which has a separate Aegon Asset Management office at 6300 C St. SW. Transamerica’s office is a two-story, 436,000-square-foot building, while the Aegon Asset Management office is a single story and totals 160,000 square feet.

Locally, the company traces its roots to the former Life Investors Inc., which was founded in Cedar Rapids in 1960 and led by former Iowa governor Robert Ray from 1983 to 1989.

Aegon acquired Transamerica in 1999, and in 2008, Life Investors was merged into Transamerica. Several other agencies, including acquisitions such as Western Reserve Life and Stonebridge Life, were also aggregated under the Transamerica umbrella.

The company operated from several buildings near the intersection of Edgewood Road and 42nd Street NE for several years, but the 51-acre River Center site was vacated when Transamerica moved its Cedar Rapids operations to the former Hibu site along C Street SW in an effort to consolidate operations at a single site, a process that began in 2016 and was substantially completed by 2020. The move included an $18 million investment to refurbish the former Hibu building, primarily comprising energy efficiencies and initiatives.

Two of the buildings at the northeast Cedar Rapids site were demolished in 2021 after being heavily damaged in the 2020 derecho, but three structures remain, including a pair of 100,000-square-foot Class A office buildings, constructed in 1994, and a 14,000-square-foot former day care facility.

Arizona-based HomeSmart Residential and Commercial Realty purchased the site in an online auction in June 2022, but the site has remained vacant since that time.

In January 2018, Tata Consultancy Services (TCS) signed a $2 billion deal for a multi-year partnership to serve as third-party administrator for the insurance and annuity business lines of Transamerica’s U.S. operations in Cedar Rapids and other U.S. locations – the largest contract in TCS history at that time. At the time the deal was signed, TCS administered more than 10 million Transamerica policies, including annuities and life insurance, supplemental health insurance and workplace voluntary benefits policies.

But in June 2023, Transamerica and Tata Consultancy Services (TCS) announced that they had mutually agreed to end the partnership. According to a joint statement, “Transamerica and TCS will work together to ensure a smooth transition of the administration of these products to a new servicing model, which we expect to take approximately 30 months.”

According to an email sent to Transamerica employees, as part of the aftermath of the decision, “we plan to add approximately 700 full-time positions, with an emphasis on hiring in Cedar Rapids, Iowa.” There was no indication of a timeframe for those hires.

In the email, titled “Revitalizing our strategic assets and operating model,” Transamerica officials described the decision to end the company’s agreement with TCS as “essential to enabling our growth strategy and restoring Transamerica’s reputation as a market-leading, customer-focused company.”

“The centerpiece of Transamerica’s comeback story is growing our strategic assets and enhancing our customer experience,” the email adds. “…This new operating model will be tailored to our customers’ needs and our growth strategies, not a ‘one size fits all’ approach. We will focus on our core strengths and work with industry-leading partners with proven track records for their strengths.”

Ms. Wirth said the transition will take some time, and some of the administrative functions Tata was performing will continue to be outsourced.

“We're not going to take everything back,” she said. “We’ll take the high-touch items back, and then we’ll outsource some of those other (tasks) to other vendors that have been proven to be great vendors for us in the past.”

‘Excitement’ surrounds new growth strategy

In June 2023, Aegon unveiled “Transforming Aegon – The Next Chapter” at its annual Capital Markets Day. A key focus of that transformation, Aegon officials said, is a campaign for Transamerica “to accelerate growth and build America’s leading middle market life insurance and retirement company.”

“Transamerica has had a long and proud history of making financial services available to the many, not just the few,” Aegon CEO Lard Friese said in a release announcing the campaign. “This rapidly growing market, representing 68 million middle income households, is the largest in the U.S. and is relatively underserved by the financial services industry. Transamerica is well positioned to grow and to capture the opportunities in this market.”

Transamerica’s strategy consists of four focus areas, according to an outline of the Aegon campaign.

First, Transamerica will invest further in World Financial Group (WFG), its insurance distribution network of around 70,000 independent agents. WFG distributes Transamerica products, as well as those of other insurers. Its nationwide network is the third largest agency force in the United States and the largest in Canada. WFG’s agents come from a wide range of diverse cultural backgrounds, and meet the needs of the communities in which they operate. Transamerica’s ambition is to increase the number of WFG agents to 110,000 by 2027, while at the same time improving agent productivity.

Second, Transamerica will invest in its product manufacturing capabilities and operating model in order to provide an improved and differentiated customer experience and to support sales growth. It will insource and redesign critical operational and administrative functions, including core customer services, that are currently managed by an external provider. As a result, Transamerica will be well positioned to grow its life insurance business sold through both WFG and third-party distributors.

Third, in Workplace Solutions, Transamerica aims to increase earnings from its retirement business which provides recordkeeping and investment services for U.S. defined contribution plans, and advice to plan participants. With a focus on the mid-sized and pooled employer retirement plan market, Transamerica will invest to leverage its capabilities as a recordkeeper with the ambition to materially increase the penetration of the ancillary products and services it offers. In particular, it will build on its expertise in stable value investment options and individual retirement savings accounts.

Fourth, Transamerica will continue to reduce its exposure to financial assets and improve the level and predictability of its capital generation. Since 2020, Aegon has released $1.5 billion of capital from its financial assets in the U.S. Looking forward, Transamerica will expand the scope of financial assets to include legacy universal life contracts, and take additional management actions which are expected to release another $1.2 billion of capital in the next five years. The financial flexibility this creates will be prioritized to further reduce exposure to financial assets.

Ms. Wirth said the new campaign shows Aegon’s commitment to the success and expansion of Transamerica’s operations.

“We have some fantastic aspects that are unique to Transamerica to get us in a position to be even more successful in the middle market,” she said. “Our founding father was all about America and making sure that everybody had access to retirement and to fulfill their needs from a life perspective. So Aegon is investing money in us to make sure we have efficient operations and that it’s easy to do business with us. We have the products and services that we need to fulfill those retirement needs and the life needs of the middle market, and we have unique points to get into that market even further. It’s nothing really new. It's just that we're investing more pointedly and explicitly in Transamerica.”

Large portion of workforce hybrid or ‘commuting remote’

Even as employment has fluctuated at times, Transamerica currently maintains a headcount of just over 2,500 employees in Cedar Rapids, making the company one of the top three employers in the market.

Since the COVID-19 pandemic, however, the workplace locations of Transamerica employees have changed dramatically, Ms. Wirth said.

“Just as everyone else, we have had to adapt to our environment, to be competitive and react to what our employees want, as well as making sure that we're meeting our customer needs and our stakeholder needs,” she said.

Currently, approximately 45% of Transamerica’s current employee base is considered hybrid, Ms. Wirth said, coming into the office at least once, and maybe up to three times, per week and working remotely for the balance of their time.

All employees work remotely on Fridays, since the company’s physical offices are now closed on those days, she said.

Another 42% to 44% of employees are considered “remote commute,” she said, coming into the office for meetings or when specifically called in for another reason, such as leadership meetings, and otherwise working primarily on a remote basis.

The remaining percentage, up to 15%, are working full-time on site, Ms. Wirth said.

Market potential focuses on ‘middle Americans’

There’s a distinct split between the Transamerica and Aegon Asset Management functions on the Cedar Rapids campus, Ms. Wirth said. Transamerica focuses on retirement and insurance packages, primarily serving middle-market clients, while Aegon works with bonds and investments, including real estate acquisitions and mortgage loans.

Transamerica itself is among the largest retirement planning firms in the United States, Ms. Wirth said.

“We're top five in middle market plans from a recordkeeping and sales perspective,” she said, “but when you look at pooled employer plans, we're number one. Pooled employer plans gather together small employers that perhaps couldn't otherwise be able to provide 401(k) plans or other retirement opportunities to their employees. And by providing those opportunities, they can be competitive in retaining people and in recruiting as well.”

Ms. Wirth said Transamerica focuses on the middle market and smaller employers because they comprise the “backbone of America” in economic terms.

“We see that as a great growth opportunity for us,” she said. “The middle market is 68 million households. That's 52% of the households out there, with incomes of $50,000 to $200,000 per year.”

And for Transamerica, this market also has dramatic growth potential, Ms. Wirth said.

“The life protection gap in the U.S. is estimated to be $3 trillion, comparing what people have saved with what they should have,” she said. “The median amount that people have saved at retirement is $67,000.”

A key function that Transamerica provides, Ms. Wirth said, is using its extensive network of agents to break down its customers’ needs on an individual basis.

“The industry overall is trying to commoditize insurance a bit more, somewhat like a car,” she said. “Term life would be an example. That’s a very simple, understandable product that can be purchased more directly. But many times, it's important to have an agent involved, just to make sure that you're not missing something. How much do I purchase? How much is too much? How much is too little? Everybody is so different. That's why we're here, with the independent agents that carry our products, to customize retirement plans for each individual.”

Future solidly rooted in Cedar Rapids

Transamerica currently serves 30.4 million customers in the U.S. and employs more than 6,500 people across the country, but its largest single employee base is in Cedar Rapids.

And with a host of partnerships with local colleges and universities, along with community-based investments, Ms. Wirth says Transamerica will maintain its Corridor commitment for the foreseeable future.

“We have been one of the largest employers in Cedar Rapids, and we have a commitment from our senior leadership to continue to have a huge presence in Cedar Rapids,” Ms. Wirth said. “If you look at the dedication of our workforce, as well as the colleges and universities around here, we’ve got a great draw of talent here.”

Transamerica also owns the C Street property outright, which is an important real estate consideration when considering a similar facility in Transamerica’s other major markets, including locations such as Baltimore and Denver.

“We’re invested here and we have a beautiful facility,” Ms. Wirth said. “Why not fill it up and use it?”

Transamerica is also heavily invested in the Corridor through the Aegon Transamerica Foundation, which has donated $2.1 million to community organizations, and through allowing all employees 12 vacation hours to utilize in community service ventures of their choice.

Transamerica isn’t currently planning to increase the local workforce, Ms. Wirth said, but the Cedar Rapids campus offers opportunities for expansion as needed.

“We are ready and able to continue to increase our employment here in Cedar Rapids from a location perspective,” Ms. Wirth said. “We’ll see how our growth goes. It’s a matter of assessing the environment and resources and adjusting accordingly.”

More advertising and marketing efforts may also be forthcoming as Transamerica continues to reinforce its local presence, Ms. Wirth said.

“We want people to know that we're here, that we’re a fantastic employer, and we give back to the community and its economic advancement,” she said. “The next time you see us, we want to be the leading middle market insurance and retirement company in the industry.”