Building Digital Life Insurance Capabilities

In my last Digital Transformation Blog, I talked about rising customer and distributor expectations around customer experience.  And that was the perfect place to start as each transformative effort an insurer undertakes should be seen through the “so what” lens of customer and distributor impact.  Now let’s look at building capabilities, at scale, while changing experience.

I saw a cartoon not long about COVID-19 that showed the disease as a wrecking ball and what it would bring, about to smash executives’ expectations around digital transformation.   It felt like this was made for the insurance industry.  While many insurers had made good progress, too many were ill-prepared.  For over 100 years, we’ve expected face-to-face, kitchen table sales conversations.  We’ve sent people out to collect fluids.  We’ve taken nearly 30 days to manually underwrite cases.  And we’ve expected paper or fax submissions of many documents.  This was all still true on March 12^th, 2020.  Then North America started to shut down.  Companies launched business continuity efforts, many of which kept back-office processes moving.  But not enough of those efforts kept front office processes moving as strongly, especially since so many companies were still building those digital front-office capabilities.  But it wasn’t just front-office, rather, many companies finally realized what having digital native capabilities (capabilities built for a truly digital experience) meant as opposed to most of the digital immigrant capabilities (items bolted on to traditional approaches).

And we’ve watched, myself with great enthusiasm, as companies like Lemonade, Ethos, Ladder, and Bestow (to name just a few) built distribution and some service, wholly digital.  We watched Haven launch from Mass Mutual replicate this, but with an insurer alongside for the ride.  Yet so many insurers lagged, looking at the totality of sales and operations and thinking where to start and how to justify what surely must be a massive spend (of which it usually isn’t).  However, the start is clearly driven by the starting point of this blog – the customer and distributor experience.

Read the Report: Xcelent Award for Breadth of Functionality 2020 in New Business and Underwriting Systems: North America Life Insurance Edition

Yes, I know that many investments are made in technology and processes are to “keep the lights on”, “run the business”, “table stakes” type items.  However, too often people confuse discretionary items as non-discretionary.  They spend huge amounts of the portfolio on items that they expect will have no return.  This conflation of non-discretionary items with transformative approaches makes it all seem just so overwhelming…

One of my past experiences focused on adding multi-channel capabilities for our in-force policyholders.  As we prioritized the efforts, our CFO (a friend and amazing mentor) asked if we’d asked the policyholders what they would like to see us build.  This suggestion would have been laughable a couple years prior, but we had held panels, done surveys, and set-up focus groups.  We asked the “so what” question, used it to prepare the priority list of functionality, and we were able to answer the CFO in the affirmative.

Understanding that a system change alone isn’t doing anything for your business is important.  Understanding that investing in “keep the lights on” items aren’t going to move the sales needle or retain your distribution is important.  True transformation starts with a customer or distributor experience you want to change.  Understanding what the North Star you are building towards is critical.  Once this is set, ask how you enable this vision.  It won’t happen all at once and I don’t recommend going for a big bang type launch either.  Instead, build towards that North Star.

One last point that is super important.  As you look towards that experience North Star, leveraging strong system capabilities tied together with digital offerings and a smoother experience journey, it is important to not neglect your home-office teams supporting these efforts.  I believe you can enable new capabilities and change the experience while also re-architecting the processes, teams, and people that support this North Star attainment.  You can build new capabilities and meet the experience expectations, while also building scale efficiencies. Whether through automation, lean management, or better alignment (to name a few options), this is the time to take a clean sheet of paper and re-build the home office as well.

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