On October 16, I was fortunate to moderate Novarica’s Annuities Special Interest Group, hosted at Principal Financial Group’s headquarters in Des Moines, Iowa. A dozen insurer IT professionals focused on annuities met to discuss challenges and best practices in their market. The conversation focused on areas including shifting culture, data security, distribution, business intelligence and analytics, and the impact of regulations.
New Generation = New Culture
One of the biggest topics of discussion was Millennials, who are poised to make up half of the world’s employee base by next year and a full 75% of world employment by 2025. As with any generational shift, Millennials’ preferences for working style are impacting hiring practices, company cultures, and the types of products insurers are offering. One of the biggest changes carriers have noticed is the collaboration style preferred by Millennials, which is altering how—and where—work gets done.
Principal representatives reported high success from their “neighborhood concept” office redesign, which the group was able to see on a tour of the campus. Other participants were interested to hear about the process of switching to this concept as they are in the process of or considering redesigning their offices to attract and retain talent. Agile and remote workforces were top of mind; younger employees or whole divisions, such as call center resources, are increasingly completing their work entirely off-site. Managing teams comprised partially or fully of remote workers was another point of discussion—tactics used included focusing on results and adjusting communication styles.
The group discussed how the enhancements in collaboration tool technology have helped several carriers in attendance improve team communication, especially among teams working remotely. This was especially true in supporting remote teams practicing the Agile development methodology. One carrier described how these tools support daily stand-up meetings and how effective the daily meetings are. Other comments noted that the technology continues to advance, which will only improve the efficacy of the tools.
Data Security Measures
Enabling a remote workforce can include some security risks. One attendee noted that their company required remote contact center workers to sign a privacy agreement ensuring data would be kept private. Originally, employees had to provide photo documentation that they worked in a room with a closed door. Now, however, most companies seem to rely on call recordings that prove workers are in a quiet, professional setting. Another attendee reported that they have seen remote contact center workers provided with a thin-client terminal that limits exposure to download data, eliminating options such as printing or USB drives.
Product and Distribution Expansion
Several participants noted that the increase in new or enhanced product changes were top of mind. These enhancements are coming with sensitive development time, requiring improved speed to market. Along with product changes was a common theme to improve the end-to-end customer experience for both the distributor and the end customer. Improving the distribution experience is expected to increase sales within distribution channels by making it easier to educate, complete information requirements, and submit new business. Part of this discussion included the increase in direct-to-consumer options for simple annuities, including multi-year fixed rate annuities (MYGA). There is a larger number of providers investing in this channel, either with partnerships with marketing startups or as initiatives within carriers. The group expressed interest in learning more about the digital distributors and carriers in this space.
Business Intelligence and Analytics
Some startups are focused on applying advanced analytics to business cases such as sales needs analysis, suitability, and block performance. As these products mature, carriers are increasingly looking at using data to improve capabilities in these functional areas. Some information needed to assess suitability can be pulled from straight-through processing sources rather than from customers directly. Participants noted that they are identifying what data they need to be looking at; some have discussed internally how to incorporate analytics and AI capabilities to improve their suitability process. Others remarked that they are still relying on customers to provide all of the data they are using in this instance.
Regulations’ Impact
The group agreed that the shifting regulatory landscape is impacting how and when they launch new digital efforts, products, and processes. Some carriers noted that adding AI to their suitability review, noted above, was being tabled until certain legislation had been finalized. One participant remarked that, “…because there’s a lack of clarity of what is going to be passed, how do you prepare?” This question is affecting annuities carriers as well as those in other lines of business. How to best capture, store, remove, and maintain data currency, along with new challenges of data privacy preferences, are some of the biggest issues the group mentioned. Balancing the regulations set forth by the SEC, the Department of Labor, and individual states with new advanced data technology and services that can improve internal processes and policyholder experience is not simple—it requires significant planning and resources.
To find out about upcoming Novarica events like Special Interest Group meetings, visit our Events and Webinars page. To learn more about this discussion and trends in the annuities space, feel free to contact me at [email protected].
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