In the United States, 18% of the GNP is spent on health-related products and services. Global markets usually range between 5%-8%, but that percentage is growing. Undoubtedly, personal well-being is important to people.
We are also aware of life insurers’ desire to provide wellness solutions to their members, but the implementation is lagging. So, how can companies move the needle to deliver more in a space that consumers are clearly willing to invest in? According to Clarke Rodgers, the Enterprise Strategist at AWS, two key elements are fostering a culture of innovation and using data and technology to create a frictionless customer experience.
I had the pleasure of speaking with Clarke on our recent episode of Technovate. At RGAX, we often look outside our industry for insights, but Clarke provides the best of both worlds. Before joining AWS, he was a Chief Information Security Officer at a major insurance company. During his tenure, he led an initiative to automate underwriting and migrate the function to AWS. Now, as part of the AWS Enterprise Group, he works alongside other former industry executives to help AWS customers increase speed and agility, drive innovation, and create new operating models using the cloud to enable a greater focus on their customers.
During our conversation, he shared how AWS fosters and embodies a culture of innovation and how they strive to “make it easy for customers to do the hard things.”
Innovation doesn’t happen by accident.
One common thread throughout all innovation-focused conversations I have with companies is that innovation doesn’t usually happen by accident. Each organization may approach it differently. For example, some make innovation an objective for every company role. Others set up specific teams separate from the everyday functions of their organizations. While I more often see the latter in the insurance industry, both can work if an organization supports innovators.
Innovation is clearly built into Amazon’s DNA. Nevertheless, as Clarke noted, AWS has formalized its support for innovation with four core pillars:
Culture: Customer obsession. Hire those with a curious, “builder mentality,” and support them with a belief system.
Mechanisms: Encoded behaviors that facilitate innovative thinking. In the Technovate episode, Clarke described one of their deeply engrained mechanisms – the “working backward” process – which helps ensure the customer is at the center of everything AWS does.
Architecture: Technical structure and tools that support rapid growth and change.
Organization: Small, empowered teams that own what they create. They are what AWS calls “two pizza” teams.
Clarke rightly points out that Amazon has a unique culture, so what works for them may not work for everyone. I’d agree, but I’d also add one caveat. Too often, I’ve seen leaders in our industry toss out ideas because they are too different. Doing that defeats the purpose of looking outside your company, or better yet, outside your industry, for innovative ideas.
We’ve often written about how RGAX uses Life Design Sprints to accelerate the innovation process. Many of these sprints involve innovators from outside the insurance industry. Sure, they come up with some unique ideas and approaches, but half the fun of innovating is turning those ideas over, looking at them from different angles, and asking “What if . . . ?” or “Could it possibly . . . ?”
Creating the Frictionless Experience
To create a frictionless experience, you must “make it easy for customers to do the hard things.” This means finding your customers’ pain points and then identifying the optimal ways to use technology and data to solve them. For example, Clarke talked about how Amazon has tried to reduce as much friction as possible from the returns process. Reducing friction in this process makes the consumer’s decision to buy from Amazon less risky.
“We make it easy for customers to do the hard things, which then earns trust with them, and also breeds loyalty.”
Clarke Rodgers, AWS Enterprise Strategist
At RGAX, we’ve run several experiments and pilot projects around creating a frictionless experience for the insurance buyer. For example, one of the focal points we’ve frequently stressed is the concept of fluidless underwriting. The traditional underwriting process is arduous for both distributor and customer, and many buyers drop out at this stage. By removing some friction, such as the need for an exam, we can speed up the process to improve conversion rates without incurring additional risk.
What is your customer data telling you?
Clarke also pointed out how Amazon recommends products to customers based on what others have purchased or products that may be related. In the industry, we call this embedded insurance, another area RGAX has explored. When it comes to insurance companies creating wellness programs, think about what your customer data is telling you that can be translated back into your offering. Suppose you see a trend involving a consumer segment typically buying X and Y products together. Can you use a recommendation engine to make another like-minded customer aware of the value of buying them together?
For example, our digital mortgages initiative embeds life insurance into the process of buying a mortgage to help first-time homebuyers naturally consider life insurance as a way to protect one of their largest, most important investments.
Plan V Care is another RGAX experiment using data to create a frictionless experience. It focuses on closing the protection gap among millennial-aged women – an underserved market for life insurance. Data on this segment has indicated that cancer is a top concern, and Instagram Influencers are a channel they deeply trust for making purchases. This initiative helps carriers reach this market segment by selling a cancer-only product and is testing the conversion of using Instagram influencers to sell it.
At the end of the day, however we get there, the result of applying innovative approaches and thinking should be (must be!) about consumers and how the solution will make their lives or their buying experiences better, easier, and more seamless.
A special thanks to Clarke Rodgers for joining me and sharing the AWS story to help our readers better understand, from a big tech perspective, how having an innovation mindset and a company DNA built for testing and reinventing itself can support transformation at the core.