The Life Insurance Discussion

Data And Disruption In the Digital Age

How the life insurance industry must leverage technology to enhance the consumer experience

by Greg Driscoll

Mr. Driscoll is senior vice president, service operations, and chief information officer at The Penn Mutual Life Insurance Company. Visit here for more information.

Looking back on 2019, a couple of observations come into sharp focus. I believe the most significant developments in the life insurance industry during the past year have been the creation of more appealing digital experiences and the utilization of data to perform predictive analytics.

This is encouraging because our industry has historically wrapped itself in paper. Even after tremendous investment in recent decades, applicants must still typically fill out a paper application and undergo invasive medical testing in order to receive underwriting. You could even argue that life insurance has traditionally been one of the most difficult products to purchase in this country, typically taking over a month from purchase decision to acquisition. That’s a fundamental reason why so many Americans don’t currently own any.

It’s incumbent upon the life insurance industry to remove the friction from our application process and elevate the purchasing experience. Looking ahead to 2020, I believe the most significant developments will be a continued drive to engage consumers in their preferred medium, whether that be digital or paper, as well as utilizing data to help drive the risk classification decision and accelerate the process.

Orientation toward experience

The increasing orientation toward consumer experience by life insurance companies is reflective of all other industries that have needed to adapt to digital disruption. The most obvious example is the retail industry’s transformation, as digital disruptors like Zappos drastically changed consumer expectations about service and experience.

However, I don’t believe the life insurance industry’s transition to a more appealing consumer experience will be entirely smooth. Life insurance products feature uncommon longevity compared to the products of other industries that consumers might engage with. Retail is transactional, and banking can be as well, but life insurance policies are typically held for extended periods of time.

Additionally, merger and acquisition activity in the life insurance industry from the 1980s through the early 2000s contributes to many disparate back-end systems. Companies grew tremendously at a time when data typically left the building only via phone or paper printout. In that context, it was easy to hide how much of the data was separated into silos. Today, such siloing can make digital transitions much more difficult.

With evolving consumer expectations, there’s growing pressure on the life insurance industry to adapt. A tremendous opportunity exists to simplify our engagement, make it more appealing to the general population, and position life insurance as a key element of every financial plan. We can accomplish this by creating an experience that reflects the quality and convenience consumers now expect from other industries.

Improve Every Day

In order to meet customer expectations successfully, we need to continue challenging norms, including how we deliver solutions in a rapidly changing world. I believe we live in a world where project models are no longer relevant, as consumer expectations shift to continuous delivery models. Previously, when a company might desire change, they would discuss and design the implementation, lay groundwork, and conduct testing. By the time the project was completed, two or three years after the initial conversations, the desired change could be obsolete.

Alternatively, a continuous delivery model means constantly reprioritizing what you want to accomplish in a shorter time frame, perhaps two to four weeks. This way, every action is oriented toward the highest value. Sometimes, the work you don’t do is just as important as the work you do.

The thought process today is that you’re not trying to solve all of your problems at once. Instead, you take incremental steps every day with a focus on constant improvement. Part of that process is to obtain frequent feedback from your engaged base about which features are most important to them and will deliver the most value to the organization.

You might not always hit the intended mark. But that’s much less detrimental when you focus on a shorter time frame. You can quickly course-correct, rather than pour your resources into a multi-year project that would be considered a failure if it didn’t solve the targeted problem.

Transformative Transparency

Although the world is moving toward widespread digitization, we still benefit significantly from our relationships with the people who distribute our products. We actively seek their input and they see us deliver on it...

One of the most significant impacts of digitization across all industries is the increase in transparency. Previously, consumers were often confused about product features, functions and price. Companies might have been able to lag behind their competitors because it was more difficult for potential consumers to make comparisons – but that’s no longer the case. Today, the consumer experience has become a primary differentiator between companies.

The life insurance industry should take inspiration from other verticals because consumers’ expectations remain the same, regardless of industry. They might recognize that the quality of engagement they experience with a retailer like Zappos probably won’t be replicated in their next interaction with the local cable company. But, it’s still maddening to deal with that poor experience and they’ll likely try to avoid it as much as possible. Consumers want to know their needs will be met in a manner consistent with their expectations — fast, simple, effective and convenient.

I believe the automotive purchasing industry offers an inspiring example of recent transformation. Very few people looked forward to the car-buying process 15 years ago because it simply wasn’t an enjoyable experience. Transparency was lacking and consumers didn’t have enough data to make informed decisions, so they often felt vulnerable to sales pitches.

Fast-forward to today and the environment has fundamentally changed. Reputable buying services, guaranteed pricing and easily accessible customer reviews have made the automotive purchasing experience substantially more transparent and appealing than it was just a decade or two ago.

Execute On Engagement

Extending this concept to the life insurance industry, if product price, feature and function are similar, why choose one supplier over another? At my company, Penn Mutual, we focus on providing a better experience to both the adviser and policyholder communities. We want people to engage us because we understand them, are a pleasure to do business with, and respond fast and fluidly to their needs.

We enjoy excellent engagement with our adviser community and greatly value their input, not just in terms of the technology we deliver, but all aspects of execution. Our National Advisers Council allows us to hear directly from advisers throughout the year to discuss their opportunities and challenges related to products and policyholder services.

Although the world is moving toward widespread digitization, we still benefit significantly from our relationships with the people who distribute our products. We actively seek their input and they see us deliver on it. We also share our plans with the adviser community and field leaders, so they always know our objectives.

From a technological standpoint, Penn Mutual introduced its Accelerated Client Experience (ACE) in September 2017. This service digitizes the end-to-end experience from the time a person decides to purchase a life insurance product — through underwriting, payment and policy delivery via the client portal. We continue to improve that offering, providing additional functions with over 40 updated releases so far. As a result, we can now issue multimillion-dollar policies in as little as 14 hours with a goal to minimize that time even further.

I also believe that our InSight adviser portal sets the industry standard. It encompasses the entire operational engagement data an adviser has with Penn Mutual, including unsubmitted digital applications and all underwriting, in-force policies, commissions and client correspondence. This portal is available through the Apple App Store, Google Play Store and native browsers. It has also been updated with about 100 new releases as part of a continuous delivery initiative, rather than a standalone project that is then allowed to become stale.

Purpose Above Task

At Penn Mutual, everyone has different tasks to perform but our ultimate purpose is the same — to provide advisers with a quality experience and ensure they feel good about presenting our products to their clients. As associates, we must be able to put purpose above task. That simply means I can deviate from the narrow lane of my job, as long as I’m pursuing the greater goal of delivering a positive experience to advisers and helping them solve clients’ financial needs.

We think of ourselves as a company that’s enabled by technology and powered by people. Even with the transformative impact of recent tech advances, we still embrace the importance of the person-to-person relationship. This combination of modern technology and traditional sensibility enables us to enhance the consumer experience dramatically.