We're Built For A Time Like This: New York Life CEO

at Bloomberg dot com. The pandemic that is sweeping the world has raised questions about about a lot of industries, but in particular the insurance industry, as a growing number of businesses seek for some compensation and one insurance CEO saying that this is going to be the worst situation for insurers UH in recent history. Joining us now, we are so pleased to say Ted Math as Chairman and chief executive Officer of New York Life based in New York City, Ted, thank you so much for being with us.

I was talking about Lloyd's of London and the chief executive officer coming out and saying that the insurance industry could face losses that are the worst in recent memory, worse than nine eleven two thousand and one, and worse than the Katrina hurricane in the United States. Do you agree with that assessment? Uh? Good morningly. So what I what I would say is this is that there's no question that for all different kinds of insurers, New York

Life is a life insurer. This presents some unique challenges in many ways. For life insurers. It's a bit of a triple challenge. You have the fact that UM the prospect of substantial mortality claims as a result of the pandemic. You have the significant market dislocations that are occurring UM

and life insurers are very large long term investors. And then you have the impact that all businesses have to today to some degree, which is the operational impact on how do you navigate a world where for most of us, I know New York Life, about of our working population was in offices, with four percent working from home before

this crisis, and today that's completely flipped. So those challenges are there, But the life insurance industry in particular is really built for these kinds of situations to be able to provide security for people in these highly uncertain times. So ted what would be characterize would be the biggest risk to your business model, maybe the business model of life insurance in general as we go through this just extraordinary time. UH. This the life insurance business is a

highly relationship oriented personal business. We work with people on protecting what matters most to them and in a sense that has been built over decades by people building individual relationships and what we've often described as a face to face environment. Today we all have to, essentially, UM, occupy a world we didn't anticipate, where social distancing makes face

to face interaction extremely limited. UM. What we are having to do is navigate how to take the depth of the relationships we've built over the years and translate them into this virtual environment all of us as we are here, I'm talking to you today from my basement on a phone as opposed to sitting with you inside of the studio. UM. That is something that I am highly confident we can navigate. But in many ways, UM, that is one of the

bigger challenges today. UM. But leveraging the human relationships, Yeah, Ted Uh. New York Life Insurance Company is the largest life insurance company in the United States, one of the large largest life insurers in the world, and it's also a very big investor. And I'm wondering as an investor in a lot of assets. How much do you think this pandemic will change the focus more to companies doing the right thing rather than just doing the right thing

for their balance sheets. I think that's an excellent question. What I would say is, this is what I'm I'm proud about is the fact that New York Life actually is the largest mutual life insurance company. This is our We actually entered this year our hundred and seventy five year And I think that this is a time in a calling for all companies um to really dig deep and ask what is the essence of their mission? What

is it? How do they define themselves? And it has to be more than your bottom line and more than your balance sheet. So in New York Life, we knew that we nobody could predict this kind of pandemic occurring, but we knew that they did occur. We have the history to know. We've been through yellow fever epidemics, other war wars, financial crises, the two thousand and eight two thousand nine financial crisis, and throughout all of those, what we've been able to do is make sure that we

can live up to the promises we make. And that's because of the inherent value proposition that's embedded with within the company. So we were able to come out and say to all of our employees that we're not going to have any layoffs. That creates unbelievable certainty in a

world of great uncertainty. For the twelve thousand men and women that represent us as agents out there, we were able to say to them that we can provide an economic floor to them and help them navigate this world of unprecedented you know, social distancing, um and and and essentially, because we have made decisions with a long term orientation, we don't have to make changes to our overall asset

portfolio that backs up those guarantees. And fundamentally, even for our policy owners, many of whom are worried about they've lost their job or they're worried about losing their job, it's an opportunity for them to be able even too, if they have to not make certain premium payments, We've given them the flexibility to defer those payments as we try to figure out where we can find some stability

through this crisis. So I think that calling on that value proposition and being able to recognize that this is at its foremost a human tragedy, and it's an opportune time for institutions to lean into their empathy and lean into their humanity. And that's one of the reasons why we have essentially now with partnered with Signa to launch the Brave of Art Fund to help the families of

healthcare workers. That's interesting I was looking at that the Brave of Heart Fund partnering with Seeing the Fun will provide financial and emotional support for the foundlis of healthcare workers and volunteers UH nationwide. That's a wonderful offering. Ted math has thanks so much for joining us Tennis Chairman and CEO of New York Life. This is Bloomberg Markets with Lisa Ramo, Weds and Paul's Wheeney on Bloomberg Radio. Well.

As the curve of new virus patients begins to bend, everybody's looking towards treatments, potentially vaccines, and they're looking towards big farmer. They're looking towards the biotech companies to deliver. To get a sense of kind of where we are on that path, we welcome our good friend Sam Fazelli. He's a director of research for Bloomberg Intelligence in Europe. But More importantly, his day job is he's a senior healthcare ANALYSTI has been found the farmer industry for decades. Sam,

thanks so much for joining us. Uh, we appreciate it. Gill Lead had some odd news yesterday. I know you're on top of that. As you know, again, investors continue to look for these healthcare companies to deliver at vaccines. What happened to Gilead yesterday? He Paul many nice still

to my old friend Paul, Thank you for having me on. Well, basically what happened was there was a leaked um a bit of data on a w h O website that perhaps wasn't even complete in terms of its analysis, and some people saw that if he was the Financial Times, and they then the whole world knew about it thanks

to social media. What basically is going on here is that that's a trial that was out of China and worked in pretty severe patients and showed no evidence of activity based on what I have heard, I've not seen the actual paper myself. So the reality there is that these are clinical trials, many of them. This is just one. It's a small one out of a large number of trials that are going on. So very difficult to just

read something out of one trial that fails. Sam very good point the idea that this trial may or may not be valuable to determine whether or not Ramdzevier actually is effective. However, what it did highlight was how much the market has a baked in assumption that there will be some sort of remedies or remedies in the near future that will at least mitigate the death rate. We saw the entire market fall yesterday after this study came

out or was published. However, problematic it was, how faulty do you think those assumptions are based on the pipeline of drugs and vaccines that you currently are studying. Yeah, well, look, I mean we were. We were in hope. I mean

that's what humans live on intentionally, right. But at the end of the day, I thought you said we all need help, and I was like, yeah, that's too But Carriya, so nothing, everyone's hopeful, everyone's hoping, and the following industry is trying its best to throw everything they've got by letting their cupboards, which is what basically some farm farmer companies have done, and also what they've got on the market.

So but at the end of the day, we're trying to solve a disease that we've only really known about for six months. I mean, we've learn about cancer for decades, and sometimes it takes time to a decade to find the treatment for a cancer therapy. So infectually disease a little bit easier because the target is easy to test in a test you but but you still have to

get the trials done. And I really do worry about um people getting too hopeful on some of this, and and really really think that that I should just everyone should just step back and let the science roll out and then and then we judges as these therapies report. So, Sam, I know you spend a lot of time talking to the companies that you cover in the farming industry, you're the biotech in industry as well. You talked a lot of smart investor sers who are m d s and

PhDs like yourself. Um, is it, what's the feeling that the timetable, because what we've heard out of the White House, UH and from others is that twelve to eighteen months for a vaccine, And what's the feeling within you know, your community as to the accuracy or potential accuracy of that time frame. So I think it's possible, as I've said before, if all the stars aligned, and unfortunately though we know that in clinical development the star don't always

all align. But it don't depends what you want out of a vaccine. UM. If you want a vaccine that's not been fully tested yet, but you know in juices in a moment a response that might be sufficient to protect, you could always go and create a room of vaccinated people within the health care community that you want to protect first. Those are the sorts of US strategies that

that that epidemiologists and governments can use. But if you really want a vaccine that you are as sure as you can be is safe giving it to healthy individuals like you and I, UM, then you just have to spend the time to test it and test it in large numbers, and that will take more than two up t eighteen months. We just had some office you on talking about UM. One of the things that nobody seems to want to talk about is the volume that these vaccines require. If you really hit it right, that's a

very big challenge. UM. So you know, and they're working on it right. Well. When you talk about the volume needed. I also wonder the international effort and how much cooperation there has been. Is there an international effort to get a high volume of vaccines to the public to the masses as quickly as possible with nations working together, or is it a really case by case kind of situation. I think I haven't seen any dance of nation nations

working together. I've certainly seen evidence have come he's working together, so A that's for example, I made this SNOPHI and Galaxis MTh Klein in Europe, and we just heard today that Johnson and Johnson has teamed up with Emergent Power Solutions for access to manufacturing and that they need to do that because I continue, when the vaccine works well, as we have seen in the case of Merak with Goddess Hill and Gleaxus ms Klein in Shoe Drinks, we

quickly hit capacity issues. Both companies are working for the next four years to increase capacity for those vaccines. So God help us. If what I was actually is when he works right, everyone's going to scramble together. That would be interested to see how the nation's behave. Sam Facelli, thank you so much for being with A. Sam Facelli, director of Research for the e m E A region for Bloomberg Intelligence, also a very long time analyst of

the pharmaceutical and healthcare industries. And now we'll just say Paul I was reading an essay by Joseph Stiglitz of Columbia yesterday which was talking about the need for more coordinate shan in coming up with some of these vaccines is sort of the elimination of the current I P framework. Interesting idea. What an historic week for oil in terms of volatility. We had the May contract earlier this week actually trading in negative territory for the first time. Supply

demand dynamics are incredibly challenging right now. To get an update, we welcome Dr Ariel Cohen, Senior Fellow at the Atlantic Council, also a founding principle of International Market Analysis based in Washington, d C. Dr Cohen, thanks so much for joining us. Help us put into context kind of what we experience this week when're looking at w T I crude. First of all, we should not focus on this one May

UH futures contract that went into the negative territory. This was a unique situation where we ran out of storage capacity. We see W t I back into seventeen range. We see Brandon twenty one range. Uh. It is a huge blow for the American shale oil patch. But once the economy starts recovering. I went over the future futures projection. We are going to the thirties towards two. So it's it's little little health for for the oil for the

oil fields right now. But as the economy will go into recovery territory, hopefully by the full uh, you'll see oil going into the high twenties, thirties, et cetera. Wait, wait, hold on a second. So you said they'll be in the thirties in two. Are you expecting oil prices to remain suppressed for that many years? Well, the question is what is suppressed when you have so much oil slushing around. You have the US production going up and up. You

have the Saudias and Russians. You have major oil produced series who are not selling nearly as much as we could Iran, Venezuela, Libya, et cetera. And you have objective structural changes where you have more and more electric cars. Uh. You have, um, this is less of immediate impact on oil. You have renewable still growing up. That's more affective gas.

But basically, as long as you don't have robustic and on the growth and massive demand coming from places like China, India, Africa unless so Europe, you will not go back to oil in the seventies or eighties unless some catastrophic, um

catastrophic things happening in the middle ees. So Ariel. This is important because the Kansas City Fed has come out with a study showing that of US shell producers would become insolvent if oil prices did not rise above thirty dollar mark, and this would be by the end of

this year. I'm just wondering, first of all, whether you agree with that assessment, but second of all, what President Trump could actually due to support some of these companies given the fact that oil prices are unlikely to rise meaningfully in the next month or two. Correct, in the next month or two, they will probably go into the low to mid twenties unless we have a major event such as an approval of an effective vaccine, and that will indicate that by the fall early one uh, we

probably have aero buzz growth in the economy. As for the shale patch, look uh these um uh, these oil patches are economically efficient. UH hends on the field depends on the well um it varies. If the smaller producers go billy up, the bigger producers have deep enough pockets the excess of the BPS to pick them up and have this capacity. It doesn't mean they will produce at five,

but these resources will be available. And to my to my my research, thirty and up thirty five and up um the oil shale wells, oil shell fields are economically effective. So I totally understand and feel the pain of people who lose their jobs and lose their businesses. On the other him, remember creative destruction in the market economy, UH has this Darwinian process in which some of these companies will be picked up by bigger and more aggressive players.

So Dr Colemen, I wonder if you could help me with the strategy being pursued by the saluities. In terms of yesterday in the Russia cut supply by nine point seven million barrels. But that doesn't seem to be enough given that the demand their destruction we've seen, are they just strategically trying to push the US shale operators just completely out of business and to get to the U s out of the UH oil business. The original idea

of putting US shell out of the business was Russian. UH. Specifically, the the chairman of CEO of the Russian state owned beheam of called rosnip uh Ego session. Uh. He was running round with this idea for a long time. UH. They made their move in March. UH the oil talks fell apart. But what you see now the Saluities are selling their oil at a great discount in Europe. So it is as much a struggle to take the market share away from the Russians as it is to put

our guys in the shell pnch art in business. So just quickly, here are all going forward? Do you think that Saudi Arabia and Russia are going to cut a meaningful additional amount of the oil produced given the fact that their current cuts that they've promised that still haven't gone into effect are considered insignificant compared to the lack of demand that we're seeing. Well, let's take a look at supply and demand. Uh. The supply UH was it

about ninety plus million barrels a day. It's collapsed by about uh the of thirty. Uh. They're cutting twins, They're talking about cutting twenty uh so the marginal price may go up, but we don't see it yet. In the future contract. I would say, let's wait till May and see how this cuts are being implemented. But it's important to remember his story. Really every time I'll pet agreed on cut. Everybody cheated. Everybody is selling a tonker, a tanker or two or five from the back door, so

to speak. I cross my desk more offers of selling oil and deep discounts over the years that I can. You know, I can count on a real code. You live an interesting life. I've missed those offers to buy cheap tankers of oil. They are not crossing my desk, they are crossing yours. Ariel coh and thank you so much for being with us. Ariel Co and senior fellow at the Atlantic Council, also founding Principle of International Market Analysis, joining us from Washington, d C. Paul, you've gotting those.

I am not occasion. You'll get that email looking too if I want to buy some barrels of oil, but not recently. Seriously, yeah, you would think that that would be getting them all the time, because nobody can sell their oil right now. Yeah, although you can't just story it in your kid's room. I've looked into it just can't. It's it's not particularly safe. I'm sure that, uh, I'm sure that a CS would come and and file a complaint.

One of the more I think ominous developments from this coronavirus really taking shape over the last several days has been, uh, the security of the food supply chain within the United States, particularly on the beef and pork uh. Michael Hurtzer, agricultural

reporter for Bloomberg, joins US now. He's based in Chicago. So, Michael, I've seen about some news command of Bloomberg News about a quarter of American pork production, maybe ten percent of beef output has now been shuttered and farmers are actually slaughtering their own pigs. What's going on here? And how bad is could this get? I guess we don't know

how bad it's going to get yet. Um. Some of these plants that have closed, there's been eight major kind of pork and beef plants have closed across kind of the central US, and one of the plants in in Greeley, Colorado is actually restarting. So I guess it will depend on just how quickly the workers can get better and then the plants can resume operations and then they can

start to wrap their their arms around the sick employees. So, just to sort of put this into perspective, what's been going on is that farmers usually rely on meat processing plants to slaughter and process the meat and then distributed that to restaurants and to big box grocery stores. What's happened is Tyson in a number of other plants, there have been illnesses that have forced the plants to shut down correct and as a result, there hasn't been the

slaughtering and processing capabilities. So farmers are just facing an overpopulation of their animals and slaughtering them themselves. Do we have a sense of how common that is for farmers to be doing that? Usually, you know, if there's there's a sick animal that will get cold, but actually at the call either market ready animals that are kind of at the desired wait for the accessing or to to kill out the younger animals. It's it's quite rare, and

it hasn't happened, you know, at any scale for years. Um, we're kind of being told that this is still relatively isolated. Um, but it could get worse if if the situation at the plant doesn't improve. And part of the problem is is that just like the grocery stores, the meat plants, they kind of need a ready supply of animals moving

through there pretty quickly. And the animals, you know, they're they're moving out of the barns and then there's another, you know, group of animals coming into the barn and into the processing plant. So it's kind of a just in time inventory and and that's really what's kind of under pressure right now. So, Michael, are we seeing higher beef end pork prices at the supermarket now? If not, now,

is that something we should be planning on. If you're reading your sale papers, which kind of are, you know, the papers that come in the mail are dropped on your doorstep, you can still probably see some sales for some meat items, uh, you know, supplies going into the pandemic were we're nearly a record and um, so the retail level probably hasn't seen quite the pressure yet outside of maybe some some gouging that that people may be experiencing.

But the market, the wholesale markets, which we have a gouge every day from from the U. S. D A has been surging for both pork and beef, and those prices will will eventually transfer down to the consumer. Michael, do we have a sense of the proportion of meat processing plants that have had to close as a result of worker illness. We had one of the major kind of unions estimating that for pork it was about um.

We're hearing, you know, might be fifteen and again on the beef about um so far, and some plants have started to get closer to resuming operation. And although there have you know, Tyson shut down two plants on pork and one on beef just this week. So, Michael, are processing plants are they geographically dispersed throughout the country or they kind of particular geography that may be more at

risk to the virus. Some of the sticking points have been like they'll generally are in more rural areas, but the workforce is much of it our immigrants and some of those people you know will travel obviously, and we're traveling prior to kind of the lockdowns, and so it's you know, it's it's just like the world. It's these plants.

They could be in the middle, middle of nowhere, but the workers, you know, travel here and there and and uh and then concentrate at the plant or or sometimes because they are immigrants or maybe not having the most highest paying jobs, they do live in culser quarters than then might be ideal for for something like this, pand make Michael Hurts her thank you so much for being

with us. Michael Hurts, or agricultural reporter for Bloomberg News, talking about something that's gotten a lot of attention, the possibility of a meat shortage, in particular pork as a number of these meat processing plants closed down in the wake of the coronavirus, other people saying that we're far away away from a meat shortage. Nonetheless, what it highlights to me, Paul, is the incredibly complex supply chain, especially for something that is just in time type of fulfillment

such as the meat industry. Yeah, that's that was new news to me from Michael, kind of that just in time aspect to it, and you know, you just get a little bit of a disruption and it flows through the system. Thanks for listening to the Bloomberg pan L podcast. You can subscribe and listen to interviews at Apple Podcasts or whatever. Podcast platform you prefer Paul Sweeney. I'm on Twitter at pt Sweeney. I'm Lisa abram Woids. I'm on Twitter at Lisa A. Bramwod's one before the podcast. You

can always catch us worldwide. I'm Bloomberg Radio. It is a belated