Steve Shaffer joined Homesteaders Life Co. in 2014 as chief operating officer, as part of the West Des Moines-based company’s succession plan. That move brought Shaffer and his wife, both raised in Indiana, back to the Midwest from Tampa, Fla. In March, he assumed the role of president and CEO upon the retirement of Steve Lang. Before joining Homesteaders, Shaffer had co-founded and led two venture-backed companies that sold products in the preplanned funeral industry. He found his way into the funeral insurance niche while he was an accountant working for Ernst & Young, which led him to join one of the firm’s clients that operated in the funeral business. At the helm of Homesteaders, Shaffer anticipates steady organic growth for the 112-year-old mutual company under its latest five-year strategic plan — Vision 2021 — which he developed with his predecessor, Lang. 

I see you went to college in Indiana. Are you from there?   
Yeah, I grew up in a large family in northeast Indiana — Fort Wayne, which is a community not dissimilar from Des Moines probably 20 years ago. Des Moines has certainly grown more than Fort Wayne has. In fact, Des Moines is probably a poster child of what they would like to be. I have eight siblings, so we’re a big Catholic family. 

What attracted you to Homesteaders? 
Homesteaders has a foot in both the funeral profession and in the insurance world, as we exclusively do one thing, which is fund prearranged funerals. So when Steve Lang was planning for his retirement several years ago, he was looking for someone who had experience in the funeral space and a financial background. It was a perfect fit with my experience. 

Did you know Steve prior to that? 
Yes — two of our companies were actually customers of Homesteaders, and I was familiar with Steve from the profession because he had been in the insurance space for a long time. He and I also served together on the Funeral Service Foundation, so I got to know him really well because of that. He basically was looking for someone to follow in his footsteps, so I joined Homesteaders in the fall of 2014 as the chief operating officer with the idea that I would step into his shoes when he retired. So that plan has reached its fruition and it’s gone very well. 

How’s the change been from the world of venture-backed companies?  
To step into a 112-year-old mutual company environment is actually a real positive for me; it fits my personality well. Being able to step into a company that can plan and make investments for the long term for our partners and for our company, the employees, is a breath of fresh air. I have the time to do things right. 

What are some of the top trends in the funeral profession? 
One of the things that works in our favor right now is just the pure demographic trends. If you look out 10 or 15 years, the sheer number of people who are going to be our target customers is growing pretty dramatically. It should almost double by 2030. So since we’re serving an elderly population primarily and are at that stage where they’re making their end-of-life plans, we expect there to be just more customers who are needing our services, as are our partners, the funeral homes. 

Certainly there are other trends that can be challenging. The cremation rate is growing, but at a relatively modest pace. It’s a little bit of a headwind, but honestly, it’s not affecting us that greatly because it’s growing at 1 to 2 percent nationally. It’s just a lower top-line number associated with cremation. Quite frankly, most funeral homes are doing a good job managing that transition. We are watching the trends closely for the baby boomers, because we know they’ve impacted every other industry — we’re watching how they want to connect and interact with the industry. 

Most industries worry about how they connect with Generation X or Z. Does yours? 
I think we do need to pay attention to them because they’re the talent we’re bringing in. They’re maybe also helping their parents with end-of-life issues. But for the most part we’re contracting with people who are much older. The average age of a person who buys a policy from Homesteaders is about 73 years old. And that’s been true for the last 20 years; that hasn’t changed that much at all. [With increasing lifespan] the average age of a policyholder has increased by four to five years in the last 20 years. 

Does the funeral insurance business face any of the huge cost issues that health insurers do?  
Not really. The funeral industry has done a pretty good job of managing its cost profile, and in these types of contracts there are certain things we can do to mitigate future cost increases. Our policies do have a growth factor, which helps offset inflationary costs for funeral homes. So it’s a sort of win-win because the family can arrange a funeral and lock in a price at most funeral homes today by buying a Homesteaders policy. The funeral home gets the value of the policy over time with a crediting rate that helps offset inflation, and the family gets all of the arrangements taken care of and most of the finances are taken care of, and they have a much better experience when the death actually occurs. 

Is technology having a big effect on funeral insurance? 
It hasn’t had a big effect yet, but we anticipate that’s coming, particularly with the boomer generation getting into our primary purchasing age target range, where they’ll want to connect with us on a digital platform. So we’re making significant investments in that area on behalf of our funeral home partners. Most funeral homes are privately owned small businesses, so it’s difficult for them to make the kind of investments needed because they just don’t have the scale. So we feel that Homesteaders as a partner to the funeral profession can help in that regard by building the technology tools and digital platforms, and the marketing know-how to reach out to the boomers in the digital space before someone comes along and disrupts that space for both of us. 

Other upcoming initiatives with the strategic plan? 
With the population aging, it’s becoming more diverse. There are ethnic segments we think will be an opportunity for us that we’re not fully optimizing today. One of those areas would be the Hispanic market. We feel like there’s a lot of opportunity for growth for us in that space as the Hispanic market matures and puts down roots in various communities. We think we can be a great tool to the funeral industry to help connect with those communities and to really understand their culture. We’ve added a number of personnel here who are bicultural and bilingual so that they understand the full cultural context of the customer’s needs. It’s worked well for us so far; we think there’s more opportunity in that space. 

Will your experience in acquisitions come in handy for Homesteaders? 
That’s a really good question. I don’t think we’ll be doing a lot of acquisitions; we’re just really not geared towards that. We feel there’s opportunity just with the growth in demographics and other strategies we’re deploying. Since we only do one thing, we strive to be the best at that and we think there’s plenty of opportunity for growth within our existing segment organically, which is the way Homesteaders has grown historically. There have been a few small acquisitions over time, but for the most part Homesteaders has grown organically. And I’m proud to say that we crossed a pretty significant milestone; as of April we crossed $500 million in face volume sales for the first time in a 12-month annual period. That’s pretty significant for our little company — almost 90,000 policies. 

How big is Homesteaders within the pre-need insurance industry? 
We’re a market leader — we’re in the top three. We probably have the strongest brand in the profession; we’ve validated that with independent market studies. That’s part of what attracted me to come to Homesteaders. Having worked in the funeral space for so many years, just the culture here combined with the strength of the brand and the strong partnership we have with funeral homes were very appealing for me. 

What would you say your guiding philosophy is? 
I have a favorite quote that I use pretty often, and it’s from Teddy Roosevelt: “Far and away the best prize that life has to offer is the chance to work hard at work worth doing.” For me, it’s important that the work I do and that we do as a company is important work, and I feel like at Homesteaders the work we do with families and with funeral homes is very important work. It’s just such a different experience when someone has planned and funded their funeral in advance. If there’s one challenge that we have, it’s getting the word out that this is an offering that anyone can take advantage of. 

What percentage of people in the U.S. preplan their funeral? 
We estimate somewhere around 25 to 30 percent of the population plans in advance, in the way that we offer products — which still leaves lots of opportunity for us to reach other individuals who haven’t planned. 

Do you see the company’s local employment growing in the next few years? 
I would say from our perspective, we’re going to continue to invest a lot in technology. Like most insurance companies, we have legacy systems we’re migrating forward to current technology. Plus we’re offering additional resources to the funeral profession on the technology front. So definitely we’ll be investing in additional resources in the IT and technology area. We see lots of opportunity for growth within our niche segment, so we would expect that we’ll continue to grow over time at a modest pace. 

Tell me about your family. 
My wife and I have been married for 25 years; we have two children. My son has a year left on his MBA; he has an accounting degree from the University of South Florida and is getting his MBA there. My daughter is just starting in college. My wife and I are just getting settled in here in Des Moines, I would say, even though we’ve been here a couple of years. It’s been a good transition — my wife and I are both from Indiana, so we both have Midwest upbringings. The culture here is perfect for us.

What do you do in your free time? 
We’ve done a lot of sightseeing around Iowa and the Dakotas… For us, it’s been fun to get out to take trips to places like Pella and Storm Lake and to get to know the area. We’re going to start getting connected here in Central Iowa in different charitable organizations; we’re just kind of ferreting out where we’re going to spend our time. In Tampa we spent a lot of time working with the homeless; we were pretty committed to that.