An asset-side education for a liability-side business

In the spring of 1999 I was a second-year auditor testing the investment schedule of a small Midwestern life insurer. One line was a private placement in a regional trucking company, carried at par. The latest covenant certificate in the file was eleven months old, and the current one, once the investment department found it, showed that the borrower had breached its interest-cover test twice. Nobody had hidden anything. The finance team had simply never asked the people who bought the assets what they knew. I have been asking ever since.

I grew up in Peoria, Illinois, where my mother taught mathematics and my father ran the parts counter at a farm-equipment dealership. I studied accounting at Kessington University, graduating in 1997, and joined the Chicago insurance practice of Pellam & Strode LLP, a fictional accounting firm. I was licensed as a certified public accountant in 1999. Audit taught me statutory accounting line by line, from the asset valuation reserve to the actuarial opinion. It also taught me that by the time an auditor arrives, the decisions are four quarters old.

In 2001 I moved to Columbus, Ohio, to join the private placement team at Brackwell Mutual Life Insurance Company. A mutual has no shareholders to impress, and Brackwell's investment committee had a long memory: it wanted to know what a loan would recover if the borrower failed, not only what it paid. I spent four years negotiating covenants with mid-sized companies that did not want a public bond, and finished an evening MBA at the Selwick Graduate School of Business in 2005. That year I took charge of the team, and of its structured credit holdings as well.

The defining stretch came in 2008 and 2009. I led the workout of fourteen troubled private placements and a book of commercial mortgage-backed securities whose ratings were falling faster than their cash flows. Some of those securities repaid almost everything; some of the investment-grade private loans returned half. I learned that a rating describes the likelihood of trouble, while recovery depends on documents, collateral and the patience of the holder. A life insurer can be patient only if its liabilities allow it, and that thought sent me towards the other side of the balance sheet.

In 2011 I joined the US subsidiary of Kerrowan Life Reinsurance, part of a fictional European reinsurance group, in Charlotte, North Carolina, as head of asset-liability management. We reinsured annuity and universal life blocks for American insurers, and I saw reinsurance from the side that holds the assets: collateral trusts, recapture clauses, the terms on which a client could take its business back. I also priced the investment side of asset-intensive transactions and learned how much of their value depended on what the reinsurer was allowed to do with the money.

Wrenfield hired me as treasurer in April 2016. I built the company's first liquidity stress test, refinanced the holding company's debt and negotiated our first funds-withheld reinsurance agreement, under which a reinsurer took a share of a fixed annuity block while the supporting assets stayed on our balance sheet. I became chief financial officer in January 2020. Ten weeks later credit spreads widened faster than at any time since 2008, and my first board meeting in the role was an unscheduled one about liquidity.

I lead 240 people across planning, controllership, statutory and GAAP reporting, tax, treasury, capital management and investor relations. The chief investment officer and the chief actuary report to our chief executive, as I do, and I prefer it that way: the three of us disagree usefully because none of us owns the others' conclusions. Every Monday the chief actuary and I review the week's sales, surrenders and new-money yields together, because pricing an annuity and investing its premium are one decision taken by two departments. I attend every meeting of the board's Audit Committee and its Finance and Investment Committee, and I sign the quarterly certifications the Sarbanes-Oxley Act requires of a chief financial officer.

Inside the industry I am known for three positions that have cost Wrenfield something in the short run. A privately priced asset should be valued as if it might have to be sold. The day a surrender charge expires is a maturity date and belongs in the liquidity plan. And capital released through offshore reinsurance should be treated as a form of borrowing. I hold them because I have watched the alternatives tested. I am now preparing for a second role alongside my executive one: a single independent directorship, on the other side of an Audit Committee table.

Open to Board appointments · Speaking invitations

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