On October 10, Novarica hosted a Special Interest Group meeting for Individual Life Insurance in Boston. Nearly 20 insurance executives from across the country joined us for what proved to be a lively and informative exchange of ideas and insights. Our discussion covered a wide range of issues central to the go-to-market strategies this line of business employs. Demographic changes, evolving consumer preferences, rapid changes in technological capabilities, and new regulatory concerns were top of mind for carriers across a variety of product offerings and distribution choices.
The session began with a discussion on data management and transformation. Though each carrier was at a different point in transformational efforts, most grappled with the transition from legacy systems and managing data during that transition. All agreed that individual life’s long-tail liabilities and decade-spanning policies worked to complicate the process, especially since relationships often spread across multiple technical environments.
The group also discussed staffing needs to prepare for a fast-paced future and noted the impact varied company cultures could have on decision velocity and operating models. They agreed on the importance of recruiting and hiring younger talent but wondered how they might compete for said talent against new tech startups or companies like Google. Some solutions included working with local schools to influence curricula, providing internship opportunities, creating pipelines for employment, and starting recruitment early in college or even high school.
In addition to hiring new talent, building company culture was an important topic of conversation. The executives present agreed that any meaningful change must come from the top, and that good communication is a requirement for business leaders, not just in IT.
Also notable was the conversation about Agile software development. Some carriers supported full transitions; others were skeptical about their companies’ appetites for a full approach. Some in attendance questioned Agile’s value, noting that their organizations operate more broadly. One carrier suggested using a combination of Agile and Waterfall, saying that “a hybrid approach works best.”
While carrier approaches to software development varied, everyone in the room agreed that Agile is not a one-size-fits-all method. As IT organizations navigate the best ways to integrate with business partners, situational awareness becomes critical. They also face the challenge of staffing and integrating Agile teams, particularly when a carrier is small, as they may not have the capacity to staff dedicated teams. Earlier this year, Novarica explored this issue in an executive brief, Agile Adoption in Insurance: Approaches and Trends.
The conversation moved to illustration and distribution systems, compliance and suitability systems, and then to cybersecurity and risk. We ended the day by asking for final thoughts from each participant—carriers commented on developing technologies like AI and machine learning, RPA, and alternative sources of data.
While every life carrier faces a unique set of challenges, they all share the need to balance old and new, buying and building, automation and manual processes, along with communication and independence between business units. It was fascinating to hear so many different approaches to these challenges. It was also encouraging to see interest in following up and continuing these conversations as the session ended.
Innovation and transformation are high-interest topics; both are similar regarding how organizations can implement them, regardless of size or product orientation. With such little time left between now and the New Year, the sense of urgency carriers in this group expressed about preparing for the future was unmistakable. Novarica now looks forward to its next “Innovation Tour” to Silicon Valley which begins on January 29, 2019. (Readers can find key insights from the last event here.)
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