O'Connell, Robert J. 1943–

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Robert J. O'Connell
1943–

Chairman, chief executive officer, and president, Massachusetts Mutual Life Insurance Company

Nationality: American.

Born: May 16, 1943, in New York City, New York.

Education: Fordham University, BA, 1965; University of Pennsylvania, MA, 1966.

Family: Married Claire M. Costantini; children: two.

Career: Fairfield University, 1966–1970, assistant professor of economic history; New York Life Insurance Company, 1970–1986, vice president; 1986–1989, senior vice president; American International Group (AIG), 1989–1991, senior vice president in group-management division; 1991–1999, CEO and president of AIG U.S. Life Companies and senior vice president; Massachusetts Mutual Life Insurance Company, 1999–2000, CEO and president; 2000–, chairman, CEO, and president.

Address: Massachusetts Mutual Life Insurance Company, 1295 State Street, Springfield, Massachusetts 01111-0001; http://www.massmutual.com.

■ Robert J. O'Connell served as chairman, chief executive officer, and president of Massachusetts Mutual Life Insurance Company (MassMutual), a diversified financial-services firm. He utilized his background in economics to understand the forces surrounding the financial and insurance industries and apply them to MassMutual's advantage. O'Connell was known for his ability to make excellent management decisions, keeping MassMutual profitable even during the financial downswing and mutual-fund scandals of 2003. He was described by employees and managers as a strong, experienced executive who rewarded innovative ideas.

STUDYING MARKET FORCES

Before entering the corporate world, O'Connell intensively studied the historic underpinnings of economics at the University of Pennsylvania, where he obtained a master's degree in European economic history. His studies helped him develop a keen ability to analyze the multiple forces affecting the financial and insurance markets. Through his examination of the historical events that altered long-standing institutions, O'Connell learned that technological changes often drove social progress, which knowledge led him to welcome innovation and new technologies as they emerged in the financial industry. Additionally, through study of the long-term effects of economic policies, O'Connell learned that a leader—whether king, president, or chief executive officer—must always look at the potential ramifications of any and all policy decisions.

CAREER BUILDING

After finishing his studies, O'Connell began his career as an assistant professor of economics at Fairfield University. He taught for several years then chose to stop simply analyzing companies and market forces and join the corporate marketplace. He used the very principles he had taught to his students to spend the next 30 years successfully moving up the corporate ladder in the insurance business. His combination of corporate experience and economic knowledge would eventually make him an excellent candidate to run a large insurance and financial-services company such as MassMutual.

EVALUATING THE BENEFITS OF CHANGE

Upon becoming the CEO of MassMutual in 1999, O'Connell created a business plan designed to keep the company profitable and evaluated corporate structural changes as they arose. In 2003 the CEOs of other financial-services companies—such as John Hancock Financial Services—believed that their companies needed to become publicly traded and increase in size in order to compete in the growing industry. O'Connell did not feel it necessary to either become a holding company or go public to be successful; rather he felt that going public would divide the company's loyalties between policy-holders and shareholders, leading to confusion with respect to goals and strategic planning.

O'Connell also believed it to be important for the 150-plus-year-old company to retain both its name and its reputation by avoiding mergers for the sake of growth. He did not rule out mergers and acquisitions as tools to enter global markets but did avoid engaging in mergers simply to increase MassMutual's size. O'Connell's aversion to such mergers was commended by Arthur Fliegelman, the senior vice president at Moody's Investor Service, who remarked in the Boston Globe that he felt MassMutual to be "plenty big for most reasonable purposes. It is clear that the biggest companies are not always the most effective or best-run companies" (October 1, 2003). As an alternate strategy O'Connell focused on the basic economic principle that if one builds a good, solid product that customers want, one can compete effectively against even the largest of companies. O'Connell created growth at MassMutual through the provision of new products and innovative services.

INTERNATIONAL GROWTH

In order to expand into the overseas insurance and financial businesses, O'Connell did acquire several small, successful international insurance companies. He felt that uniting his firm with a foreign market's known companies would ease entrance into the international market and maximize early profits. MassMutual expanded into Southeast Asia in 2000 by acquiring the Hong Kong-based CRC Protective Life Insurance Company, covering Malaysia, Thailand, and the Philippines. O'Connell worked toward global expansion as opportunities arose instead of following a short-term plan for rapid growth. By 2003 MassMutual had developed operations in Bermuda, Chile, Hong Kong, Japan, Luxembourg, and Taiwan. As evidence of the success of O'Connell's approach, during 2003 MassMutual's worldwide insurance sales increased by 7 percent.

LEADING THROUGH INDUSTRY SCANDAL

In 2003 the mutual-fund industry was rocked by a scandal centered around the financial benefits or commissions received by agents for leading clients to certain funds. There were also several high-profile cases of insider trading. In order to counter the industry's bad press, O'Connell supported a change in regulations that would provide consumers with more information about mutual funds, fees, and brokering commissions. Additionally O'Connell required that MassMutual brokers not invest more than $50 million in any one company, such that the mutual funds would not be so severely impacted by the one company's fortunes. Evidence of the wisdom of this strategy could be seen in the 2003 annual report: MassMutual's major businesses achieved substantial growth and profitability, with the value of total assets under management increasing by 19 percent. O'Connell was able to keep his firm's core values of integrity, trust, and community support strong while providing new products, expanding globally, and avoiding large mergers. In fact in 2003 MassMutual moved up the Fortune 500 list to number 84 from 104 and advanced to number two in its industry category in the magazine's list of the Most Admired Companies in America.

CLIENT-CENTERED EDUCATION

In addition to his support of increasing transparency industrywide, O'Connell ensured that MassMutual created a series of programs, resources, and brochures to educate the company's own current and potential clients. He formed partnerships with 60 major colleges and universities to create local family-business centers and a Family Business Enterprise that provided networking and resources for clients who ran such businesses. In addition to its sponsorship of those centers MassMutual produced guides, workbooks, videos, and an interactive CD-ROM on the intricacies of running family businesses. Through such educational programs O'Connell increased MassMutual's presence in clients' day-to-day financial lives and enhanced their understanding of insurance options.

REACHING OUT TO THE COMMUNITY

Under O'Connell's direction MassMutual focused on community outreach, also largely through educational programs. In 2002 O'Connell developed a program that moved beyond educational materials and into more direct community support: the innovative LifeBridge program offered eligible working parents of low-income families free 10-year life-insurance policies. The goal of the program was to protect the children's abilities to obtain education by insuring the lives of their parents. If a parent were to die during the term of the policy, the death benefits would be paid into a trust to be used for the child's education. In addition to the LifeBridge program O'Connell and MassMutual continued to promote education through the creation and support of academic-achievement programs and through new educational models promoting success in public schools.

MANAGEMENT SKILLS

In his role as MassMutual's CEO, O'Connell became known as a strong, experienced manager who was not afraid to implement innovative ideas. He used his experience and economic knowledge to make excellent management decisions that protected MassMutual's reputation during scandals and kept the firm profitable during fragile economic times. He led his employees to focus on clients and develop ideas that would assist those clients in understanding their own insurance and financial needs. O'Connell emphasized core principles of ethical conduct for himself and for all others in the company. On the whole O'Connell's management skills kept MassMutual strong and competitive in a time when the financial-services industry was undergoing many fundamental changes.

See also entry on Massachusetts Mutual Life Insurance Company in International Directory of Company Histories.