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What Penn Mutual’s 175 Years of Innovation can Teach Life Insurers

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The on-demand world has biased us to measure results over short timeframes. We track success in monthly KPIs, 2-week Agile sprints or even real-time dashboards.  

But there’s a deeper success that plays out over a longer timeline that matters a lot.  

At Penn Mutual, for example, the history of innovation dates back to their inception 175 years ago. Stewardship of a mutual company over that length of time requires long-term vision and periodic reinvention, without losing focus on the original mission of the company. 

The success of sustainable innovation initiatives in these situations is measured over years and decades. It takes into account how a company contends with macro market changes like tech booms and busts, financial market collapse, pandemics and even a remaking of change itself in the form of digital transformation. 

As Greg Driscoll, COO, Life Insurance and Annuities, at Penn Mutual, pointed out on a recent Life Accelerated podcast,

I think a lot of individuals look at insurance as kind of a sleepy industry in the financial services realm. I don't think we're there today. I think over those 175 years, if you take us up to 2022, where we sit today, it is a robust, highly active, highly innovative industry.

Greg Driscoll, COO, Life Insurance and Annuities, at Penn Mutual

3 critical technologies shaping the next decade of innovation

For many life insurers, digitalization and modernization has been largely an exercise in getting back in line with other parts of the insurance industry and establishing a competitive foundation for innovation and growth. For Penn Mutual, the early adoption of 3 important technologies has enabled them to truly transform, continuing the evolution that started almost two centuries ago. 

1. Data

Greg Driscoll calls Penn Mutual ‘an original data science company’. They recognize that data is the foundation of creating value in the insurance industry. And the company’s ability to continually develop its data capabilities has been critical to their continued success.  

Over the past 15 years the company has prioritized improvements in data management, data movement, and data presentation, both internal and external. The foundational work being done with data has set Penn Mutual up to be able to take advantage of emerging technologies like machine learning applications that accelerate underwriting.  

2. APIs‒ with a unique twist  

The problem of overcoming silos and enabling the flow of data between solutions is solved by Application Programming Interfaces (APIs). Penn Mutual has developed a unique way of utilizing APIs to connect stakeholders. 

Early on, the company created a triangle model that would relate policy data, field information and client information. And, over the course of a couple of years, they were able to build out a micro API architecture that conforms to the triangle model and enables users to view a policy, but also see all the relevant client data and access the related information on each financial professional who has been associated with the policy. APIs enable a consolidation and exchange of data between the stakeholders who need it, when they need it. 

API linkages are also not just a connective bridge between partners but between stages of development. They give Penn Mutual the ability to create solutions quickly by integrating internal and external applications to form new tools and systems. As market conditions, consumer expectations and new competitor solutions emerge, this flexibility gives the company a quick-deployment advantage.  

3. Cloud

The great migration from on-premises hosting into the cloud is a pillar of digital transformation. Cloud deployment supports agility and innovation because it accelerates the process of standing up new software and products. It is more easily scalable and more resilient from disaster business continuity point of view.  

At Penn Mutual the translation to the cloud is important to the long-term health of the firm because it is enabling them to leave behind previous generation’s bricks and mortar IT. They plan to shutter their data center in the 15-16 months and become “an entirely internet-based company.” 

Wrap up 

Penn Mutual remains true to their 175-year-old roots and mutual structure, but have continued to evolve their approach to innovation, giving them the agility required to prosper in evolving market conditions. Their early adoption of big data technologies, cloud deployment and micro-service APIs is the latest chapter in a long and ongoing transformation, putting them in a strong competitive position for years to come.  

To learn more about how Penn Mutual is succeeding in its digital transformation check out the podcast.

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