The life insurance industry, as a whole, is on the cusp of radical transformation. Last year, a study by Accenture found that 86% of insurers believed they must innovate at an increasingly rapid pace simply to retain a competitive edge. But to really assess the pace of change, it sometimes helps to take a step back and look at the big picture from the outside.
I joined the industry a little over a year ago, but unlike many of my peers, I didn’t start out in insurance. I worked with a few carriers in my previous life as a marketer and entrepreneur, but when I joined RGAX as CEO, I wasn’t what you might call an industry veteran. While my status as an outsider endures, and the year comes to a close, I thought I’d share a perspective on the changes I’ve seen over the course of the last 16 months.
The Players are Changing. So is the Game.
One of the ways to judge the maturity of digital transformation within an industry is to take a look at who’s involved in the discussion. Six weeks after joining RGAX, I accompanied my newly inherited (and wicked smart) team to experience InsureTech Connect 2017 (ITC). When we returned to the conference in 2018, I quickly realized the event had taken on a much different flavor.
Perhaps the most notable difference was that ITC had nearly doubled in size from roughly 3,000 attendees in 2017 to more than 6,000 in 2018. The makeup of these attendees had changed as well.
In 2017, the mix of conference participants seemed to be largely insurtech startups and investors. There were a few carriers in the mix, but they were limited mostly to the large players with venture arms or heads of innovation. It was like a speed dating event. We heard a lot of pitches from startups who were ready to build the next great thing and were at ITC looking for strategic investors.
2018 reinforced what the industry trends are saying about investments in insurtech. Large sums are being pumped into this market. I could see that, not only in the doubling of the size of the conference, but also in those who chose to attend. There were a lot of consultancies: PWC, E&Y, CapGemini, Deloitte, Accenture... Attendance from these notable firms gives insurtech another level of credibility, underscoring the growing awareness and potential opportunity.
I expect even more carriers will attend next year as consultancies help spread the word about the ways insurtechs can help them more quickly embrace and make progress on their digital transformation road maps. I’m really looking forward to seeing how things evolve in 2019.
Our Role Has Evolved, Too.
In many ways, the evolution of RGAX has mirrored that of the ITC conference. Four years ago our parent company, Reinsurance Group of America (RGA), recognized that insurtech was the wave of the future, so they started RGAX to stay on top of emerging trends and to help carriers navigate the digital transformation revolution. To that end, we’ve spent a lot of time looking at emerging technology solutions, partnering and investing in start-ups, spinning up organic solutions and acquiring companies across the value chain. We’ve also evolved from a few dozen to a few hundred associates who are committed to serve carriers and help lead them through digital transformation from product development all the way through claims.
The insurance technology landscape is where significant change will take place over the next few years, and carriers and their consumers are our priority. If we can run alongside the evolution of technology and help capture it and leverage it into the industry, that’s good for everybody.
The Future is in the Application; Not the App.
For every industry, digital transformation tends to go through what Gartner called a “hype cycle.” Early in the cycle, there’s a lot of excitement that starts with a trigger, such as a technological advancement (e.g., AI, Big Data) or a new category of application. This leads to the inflated expectations phase where many in the industry focus on the technology as though it will provide all of the answers.
Some carriers are more pragmatic about applying technology in ways that can help their business model instead of just focusing on technology for technology’s sake.
As an example, I recently spoke to the global COO of a large, multi-national carrier whose priorities were about speed for the consumer across the entire chain, from the application process to underwriting to policy administration to claims. The objective is to leverage these new technologies into the business at every touch point to give the consumer a better experience. To successfully reach their goals, this COO’s organization is going to have to invest strategically and wisely.
You don’t need a lot of research to tell you that speed and convenience are key to customer-centricity, but as an aside, my favorite quick read on the subject of late is called The Convenience Revolution by Shep Hyken.
If your digital transformation journey needs a little more focus, consider a process called Life Design Sprints. Instead of a brainstorming session where the best ideas get tossed out in favor of those that are easy to implement, a Life Design Sprint is a session where those ideas that can most impact the business are developed, fleshed out, and even tested – all within 3-5 days.
These sprints are also different because they involve business leaders across multiple departments and are conducted by a trained facilitator to avoid the kind of silo/department thinking that holds so many carriers back from achieving their digital transformation objectives. Most importantly, the facilitators keep everyone focused on the problem/opportunity first and only then on how insurtech or other solutions might help.
We have been conducting these for carriers lately with much success, so feel free to drop me an email if you’d like to learn more. Also, consider checking out this related post: Life Design Sprints: Beat the Brainstorming Blues
Overall, I am incredibly optimistic about where we are as an industry and passionate about helping carriers leverage change. Insurance may not be as technologically advanced as some other industries, but it’s evolving quickly, and Insurtech is taking off at a great time: 5G is right around the corner, AI and machine learning are real, and developers have worked the kinks out of the Software as a Service (SaaS) deployment model, allowing carriers to implement incredibly sophisticated applications at a fraction of the cost.
I can’t wait to write this post again next year because there’s no telling how far we’ll have traveled in another twelve months. I’m looking forward to taking this journey with you.
