How carriers can lean on partnerships to innovate with speed

By Lena Chukhno

All life insurance carriers are aware of the consumer's demand for digital-first experiences, but not every carrier has been able to meet that demand. A lengthy and complicated application process with the added friction from a medical exam isn't ideal for many digitally native consumers, so insurance companies must reassess their use of technology to drive innovation. With a partnership-oriented approach, leveraging technology to expand customer acquisition and retention and reduce costs is more within reach than you might think.

Tech transformation alone doesn’t mean innovation

Some teams can mistake embracing new technology to innovate. But unfortunately, another step must happen for true innovation: adopting methods and practices to serve consumers better. In other words, technology for technology’s sake is not enough. Technology must help the business provide customers with fast, straightforward service.

Yet, successful digital transformations remain relatively rare among life insurance companies. There are many reasons for this, including working with legacy technology and navigating complex regulatory restrictions that make it challenging to experiment and iterate quickly.

With the right strategy and support, carriers can invigorate their business model to move faster toward new outcomes and growth. To succeed with innovation, insurers would be wise to partner with companies that can deliver customized turnkey solutions rather than trying to build from scratch. Why build a transformation engine when you can partner with a company that has already tested the process? Here are three ways the right innovation partner can help accelerate growth:

Use lightweight experimentation to build exactly what the customer needs.

While tech companies are accustomed to gaining insight through experimentation, most carriers are not. Typically, a carrier's existing technology cannot support experimentation and does not have internal processes for test-and-learn. The thick layer of regulations carriers must comply with can make experimentation more complicated.

By partnering with a tech-first company specifically accustomed to working with insurers, carriers can lean into lightweight experimentation in areas like customer acquisition and targeting. They can then analyze the results of A/B testing in conjunction with a partner company with testing and learning experience. These insights help to better serve customers, including better products and services tailored to customer needs which can lead to happier clients and better long-term brand affinity.

Sunsetting fragmented tech solutions.

Cobbling together a patchwork of different tech solutions for security, online vending or product design will not yield authentic transformative results. Managing numerous vendors is time-consuming and expensive, and generally keeps systems from working together. This results in fragmented data, redundant processes, and employee frustration.

An end-to-end platform that includes application, underwriting and cost administration eliminates the need to maintain siloed products and systems and results in actionable data. In addition, a single platform fully tailored to an insurance carrier’s needs means employees have fewer programs to learn, maintain and manage – so it is more easily iterative and scalable over time. Starting small with technology that’s easy to change lets companies experiment in ways that avoid a cumbersome business case or lengthy review process.

Data-driven decision-making

Manual processes are still rampant in the life insurance industry. They drain precious time and resources, and eat away at profit margins. Primarily fluidless underwriting is the future of the life insurance industry and is imperative for relating with younger customers who expect frictionless buying experiences. By leveraging data and algorithms, carriers can streamline one of the most time-consuming aspects of the life insurance experience: underwriting.

Companies can make well-informed underwriting decisions without requiring inconvenient and time-consuming blood draws by using smart algorithms to pull data from industry-leading data sources to determine risk class.

Beyond underwriting, having end-to-end customer data can allow carriers to power their decision-making with better information than disjointed technology solutions and fragmented internal data sources allow. Having a full view of the customer from the first interaction will enable carriers to optimize acquisition channels, improve mortality and lapse performance, and make other vital decisions to achieve their desired business outcomes.

The life insurance industry is on the cusp of a major change. Advancing technology is required to keep up with the needs of new and future customers. By automating back-end procedures and transforming operations, carriers can improve employee and customer experiences. Carriers that recognize this early and partner with the right technology companies will be poised for success, ready to gain market share and build the foundation for the future.

Lena Chukhno is chief revenue officer with Bestow. She may be contacted at [email protected].