Practical Insights and Strategies from 5 Life Insurance Technology Leaders

Anthony O'Donnell: I'm Anthony O'Donnell and this is Life Accelerated, a podcast for life insurers striving to achieve digital transformation. In this special episode of Life Accelerated, I look back on the conversations we've had during the past year and I dig into some practical approaches to digital transformation and life insurance shared by our guests.

Legendary for its complex processes and slow pace of change, the life insurance industry is quickly becoming a locus of innovation and agility, in large part due to the imperatives of digital transformation. This past year we've spoken to numerous change makers who are in the vanguard of this shift and have set the bar when it comes to practical approaches to digital transformation.

Here are some actionable insights that have informed their transformation efforts.

First, we speak with Santhosh Keshavan, Chief Information Officer at Voya Financial. He makes a case for the cloud, which is less about whether to do it and more about how to do it. Among the senior leadership at life insurance companies, concerns have shifted from security and control to practical considerations such as application readiness, financial impacts, and the cultural shift required for cloud adoption.

Here are his thoughts.

How does a CIO make the case for the cloud to the leadership of an insurance and financial services company?

Santhosh Keshavan: It's a lot easier these days than if you had asked me the question 10 years back. There was a lot of question around, is this secure? Are we going to lose control?

Are we going to be able to have a disaster recovery as robust as we had in our own data centers? But the cloud industry and the ecosystem has evolved significantly in the last 10 years. So today the discussion is more around are the applications ready to be hosted in the cloud? What's the financial impact?

And the most important thing is also the tendency for companies to go create how they operate. The data centers to operating similarly in the crowd. There is a culture shift. There is a shift in thinking on how we balance out what we want, when we want, and you know, how we pay for it. So there is a whole element of change that has to be managed.

But when I look at our stakeholders, they are fairly comfortable with what cloud has to offer. It is getting the other pieces, right? You know, if we move an application as is. Are we going to see some performance impact? That's not a good thing. So you don't want a performance to be degraded by moving certain applications.

And if they are not going to work well, then we have to rewrite the application or think of another strategy. And finance is always a big part. I've seen where. Going to the cloud to lower the expense rate generally is not a good idea because at times running applications or workloads in cloud could be more expensive.

So really understanding the why is very critical.

Anthony O'Donnell: Embracing the power of customer feedback was an important theme in my chat with Ryan Downing, CIO of Enterprise Business Solutions at Principal. His innovative approach on customer listening recognized what constituted successful customer interactions and instilled a sense of urgency among team members.

Ryan had some interesting and perhaps counterintuitive observations about the potentially transformative role of AI in reshaping the customer experience. Here's what he had to say.

Ryan Downing: We've been doing a lot around customer listening lately, and how do we provide all of our team members kind of a view into what is a customer interaction look like?

Here's some calls in our recordings. Here's ones that have gone really, really well. Here's ones where we have opportunities. I find those to be great moments, one to celebrate where we're doing really great things, but also create a sense of urgency that our customers need our help, and we have opportunities to continue to be better.

And so I think just continue to embed that into the thinking of every single team member and create the connection back to kind of the higher level mission is so critical on how we do this. AI, I think is going to give us an opportunity to get to a level of personalization that we haven't seen before.

Where that each and every one of us can really, truly have a unique experience based on what our true needs are and based on what our experiences have been with that organization throughout time, right? So it may be that you can observe and understand how people are interacting and recognize that they need help with something.

And how do you start to proactively provide those things in a different way than I think we've been able to do in the past? And so for me, I think I really starts to bring back this personalized view that starts to almost feel. more human than I think our digital experiences have felt to date. Now, when I think about AI as an organization, we absolutely believe in the technology and the impact it'll have on our business.

We're already seeing several places where we have opportunities and where I've actually already implemented AI technology in several places and seeing tremendous value from an organization and from a customer perspective.

Anthony O'Donnell: Jeff Donaldson, Chief Digital Officer at Mutual of America, shares the company's approach to digital transformation through his discussion of the Route 66 strategic roadmap.

He outlined six IT strategies accompanied by a complementary set of six primary principles. He emphasizes the paramount need to modernize the core platform, particularly the record keeping administration system and its associated applications, ultimately moving to unlock enterprise data. Here's Jeff's Route 66 strategy.

Jeff Donaldson: You know, you have to have a catchy phrase with any roadmap and for us, that roadmap was Route 66. And as you mentioned, so six IT strategies that we pursued and six primary principles that we wanted to ensure that was threaded throughout our effort. Starting with the strategies, really, first thing that we thought of was modernizing our core platform.

I mentioned our record keeping platform and associated applications, and then how we could extend and integrate those supporting applications. The second one we thought about was rationalizing and integrating non record keeping applications. And I would say that while there was a significant amount of work here, it didn't always mean upending.

Or throwing the baby out with the bath water. The third IT service delivery excellence, of course, excellence in everything that we did defining, implementing, measuring, and improving our IT service processes. Our fourth standardizing infrastructure. We had one of everything, which of course, in terms of consolidating and refreshing and standardizing presents a significant challenge, but of course.

We did begin that journey into the cloud and managed services and clearly have gotten some of the benefits associated with it. Six and final strategy that we employed was really unlocking enterprise data. I mentioned enterprise data management is one of the core four initiatives we pursued. We wanted to support and drive digitalization, automation, and analytics driven business strategies. This is how we were going to do it by unlocking our enterprise data. So those six led to a number of initiatives, well over 40 different initiatives that we have tackled over the past several years.

Anthony O'Donnell: In my conversation with Aegon's Chief Technology Officer, Deb Waters, she discusses end to end processes, emphasizing the importance of seamless client experiences from the initiation to the culmination of various transactions.

Whether crafting policies for new clients or facilitating retirement planning, the focus lies on simplifying the front end user experience. However, the unique challenges of the life insurance industry, characterized by monolithic legacy applications, demand a strategic transformation. Here's what she had to say.

Deb Waters: So when I talk end to end, it means from the start of the process, all the way through to the end of the process, which would mean if we are creating a policy for a new client that our distribution network or advisors can easily display different products for the clients, or if we're talking about our retirement, a retiree or somebody who's Investing for their retirement can pick which approach they want to retire.

So you create the front end piece of that, making it simple for the client to do. But when you're dealing with the insurance industry and we are behind other industries, we have a lot of legacy technology companies like ours that are 175 years old, have a lot of applications that have been around for a long time.

And so they tend to be very monolithic applications, harder to change. So what you need to do is you need to change. The how it becomes how you're working. You want to change those monolithic applications to smaller applications, more API driven so that you can change the components. And when you have those different components, you can then build those components into the interface that the either internal user or our customer sees.

And so it's also about time to market, right? Some of these legacy pieces, if you have a regulatory change. If you have a lot of legacy that becomes harder, or if you have an integrated multiple systems that do the same kind of processing, you have three times or four times or whatever times the amount of work.

So all of that becomes really important in thinking about what you're trying to do to serve the client. And then of course, in today's world, you want to go to cloud. And the reason you want to go to cloud is scalability. We intend to grow as an organization in order to grow, we want to make it easy if we have the software on the cloud as we expand, whether it's a new product or a new set of clients or information about the clients, you can almost automatically.

Get that capacity as opposed to historically, where you'd have to bring something into your data center and you'd have to order it. It would take some time and it would be even more costly now. Also, you have to be smart because if you're not thoughtful and how you implement your solutions in the cloud, you're not going to get the benefit.

So there's lots of different ways to do it. And that is really important part of how we're building technology now.

Anthony O'Donnell: In framing the technology priorities of MetLife, Head of Global Technologies, Bill Pappas, emphasized alignment with the company's overarching purpose, a conviction that technology exists to enable business differentiation toward the end goal of enhancing customer experience.

Here is Bill explaining those five strategic pillars.

Bill Pappas: Our GTO priorities are really grounded on MetLife's purpose. I always talk about it that there is not a need for a technology and organization function to exist if there is not a customer that needs to be able to take advantage of the process and the solutions that we provide.

So we created those priorities based on that and we ground them on the purpose and our strategy. So there are five and those have been very consistent over the last three years. But we started with the first one, which is enable the business to be friendly. So it goes back to where we just talked about it.

We are here to enable the business to stay competitive in the marketplace. And we're doing that by putting in place what we call a high take and a high touch strategy. The whole idea that we need to be developing digital solutions to be able to really take the transactional nature of our customer interaction in a way that is easy for them to use those tools.

But we also balance that with the ability to be able to be there and speak to somebody when they need us the most. So that's how we develop difference in the marketplace. And at the same time, we always ensuring that we understand the customer preferences and we tailor our solution based on what they need.

The second thing is there is not a need for a technology and organization function to exist if there is not a customer that needs to be able to take advantage of the process and the solutions that we provide.. We've been around for 154 years, so we're paying very close attention to have contemporary platforms, to have the right automation, and also have the right level of cloud to be able to stay competitive.

That for us is all around protecting the company. And there is two things there. One is the work that we're doing from a cyber perspective to ensure that we safeguard customer and company assets. And the second one is her own data governance ensure data fits for purpose and data is always protected and we need to do all of this and at the same time that we need to be able to manage our business in a competitive unit cost a lot of the products that you've seen around from an insurance perspective are commodity so the two things that differentiate that.

One is the service that we provide. The other one is the price. So we're paying very close attention to that unit cost. And we cannot do any of those priorities. You cannot build more, you cannot simplify, you cannot protect if you're not able to have the right workforce. So our last priority, but also the most exciting priority is to make sure that we build a contemporary workforce.

Our ability to attract, our ability to retain. But also our ability to build a culture that people feel passionate and comfortable to achieve their career aspirations.

Anthony O'Donnell: In considering practical approaches to digital transformation, we've explored diverse facets of technology leadership, yielding unique insights and strategies.

From reshaping customer experiences to navigating transformative roadmaps and embracing cutting edge technologies, these ideas illustrate the dynamic landscape of successful technology transformation in the life insurance industry. Whether it's fostering a customer centric mindset, strategically modernizing infrastructure, or prioritizing cybersecurity, the common thread lies in aligning technology with the overarching purpose of the organization.

The resonance of these insurance leaders perspectives affirms the critical role technology plays in driving innovation, differentiation, sustainability, and growth.

Thank you for joining us for the Life Accelerated podcast. For more relevant content to help you achieve digital transformation, visit equisoft.com/lifeaccelerated.