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3 Lessons for Established Life Insurers from a Surprise Insurtech Startup‒160-Year-Old Equitable

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Digital Transformation is the largest upheaval in history of the life insurance industry . All companies are somewhere along the journey to digitalize operations, modernize aging legacy systems and implement the real-time sales and service solutions that will make them competitive for years to come.

But what if you didn’t need to retrofit all of that?

What if you didn’t have to deal with a dozen, decades-old policy admin systems holding your data hostage? What if there were no PDFs in your on-boarding process? No paper in your claims?

We can learn a lot about the answer to those questions from Equitable’s Employee Benefits group who started from scratch only seven years ago and were truly ‘born digital’.

Traditional Life Insurers: What would you do differently if you started again with a blank sheet of paper?

Recently, the group’s Head of Technology Strategy, Alyssa Arellano, sat down with Anthony O’Donnell of Insurance Innovation Reporter for an episode of Equisoft’s Life Accelerated podcast to talk about their experience with building digitally from the ground up.

Alyssa’s situation is fairly unique because Equitable is a 160-year-old, fortune 500 company that took a leap of faith in 2015 by creating a startup employee benefits team. The group had no ties to existing technology. They were opening a new market and had the opportunity to set themselves up as if they were a start-up.

Life insurers of all ages and sizes can learn from and adapt the digital growth principles that Equitable’s Employee Benefit team have uncovered since their inception.

Lesson 1: Get off the multitude of legacy Policy Administration Systems (PAS) you’ve collected over the years.

One of the huge benefits that Equitable’s Employee Benefits division had was that they weren’t burdened by legacy technology. They were able to build the best, most appropriate tech stack for their needs from the ground up.

“We don't have legacy systems. We don't have 75 different sources of truth. We have one source of truth, one system that has all of that.”

‒Alyssa Arellano, Head of Technology Strategy, Equitable Employee Benefits

Long-established insurers can find their own single source of truth as well, by implementing a modern PAS and migrating their existing books of business off the old systems so those platforms can be retired. Yes, it will take time and resources. But the process, in a sense, provides an opportunity for rebirth. As at Equitable, the digital reimagining can begin in one business unit, with one set of products or on one project, and expand from there.

As the process unfolds insurers will find that the affected business units begin to look a lot more digitally capable‒with all the attendant benefits. Consolidation will enable your organization to:

  • Simplify your IT environment
  • Lower effort and TCO
  • Enable easier integration and connections with other solutions and providers through APIs
  • Free your data so it can be leveraged for high value analytics

A new, cloud-based PAS gives life insurers a level reset. It enables a company to fully embrace the other lessons necessary to become truly digital.

Lesson 2: Incubate an Agile methodology and mindset

Equitable Employee Benefits started their clean build with a blank whiteboard and a fundamental question: How do we take out ALL of the friction that exists in employee benefit experience?

The way they worked toward the answer is instructive. They didn’t follow the traditional method of brainstorming and plotting a 5-year vision or plan that described the output they sought. This type of planning is still useful in the right situation‒but it’s about as modern an approach as batch processing.

Instead, they mirrored their Agile development methodology by adopting an Agile mentality that allowed them to whiteboard their approach in sprints, in response to feedback data arriving closer to real time. The combination of Agile methodology and digital era thinking, enabling them to be more nimble, responsive to changing conditions and creative than they could have been if they were locked into an older ‘Waterfall’ mindset and workflow.

And there is structure and purpose behind the Agile approach. It includes what Alyssa terms, ceremonies you deploy in certain timeframes. You have your standups, your retros, you have the sprints. You work with users to collect feedback. You start with your best idea about what your destination will be, what your objectives are, but you remain open to change and improvements as you go.

For established life insurers the opportunity is to experiment with this type of approach on smaller teams, working on smaller projects. Step back from pre-defining the entirety of the end result, put an agile process in place, start with your best set of assumptions and then iterate and evolve as you go.

“You could have the best tech stack in the world, but if you don't have the right mindset and you still have legacy thinking. You're just putting good technology on top of bad process.”

‒Alyssa Arellano, Head of Technology Strategy, Equitable Employee Benefits

Lesson 3: Get the right kind of commitment, from all the right groups

The Equitable style of Agile approach and mindset only works if there is complete buy-in from all the stakeholders who will be involved in or affected by the process. The organization needs to fund the project and leadership has to agree to being okay with plans that are not as clear or well-defined as they are used to.

They need to agree to the value of leaving some ‘wiggle-room’ in the plan so that adaptations can happen in response to feedback from clients and internal users along the way.

And customers, both internal and external, need to be prepared to receive a deliverable that doesn’t work the way they may have expected and trust that issues will be resolved in the next two-week sprint cycle.

Thinking about buy-in in this way is important for established insurers looking to become more agile. The key is to ask for new types of buy-in. Rather than getting sign-off on a set of requirements, or a detailed plan, obtain buy-in to the approach–the idea of agility and what that mindset will mean for the company, for teams and for customers.

This type of commitment is perfect for companies that have incubators or innovation labs. But even on more traditional projects (like developing a new product) it’s useful to ask, is the old approach the best approach? And if not, what agreements and assurances will we need to make a better process work for everyone.

Wrap up

Because all of these lessons were put into practice at Equitable Employee Benefits they were able to go from whiteboard to implementation in just 10 months. Putting some of these ideas in place in traditional organizations can increase speed to market and enhance innovation to create competitive advantage.

As Equitable has shown, a 160-year history doesn’t have to be an anchor that holds you back, it can be a jumping-off point to a new digital reality.

To find out how the Equitable Employee Benefits team has redefined the customer journey and accelerated onboarding check out the podcast.

And for more digital transformation insights from top life insurance execs check out the 5 Core Principles of Digital Transformation From 6 Top Life Insurers eBook.

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