Why 'simple' is innovation in the life insurance industry
We live in an age where the pace of change in innovation is accelerating and ‘simple’ is not often a word that is used to describe new technology.
For the life insurance industry, simplicity and transparency are what’s been needed for many years as incumbents struggle under the weight of old-world systems and processes that make everyone’s jobs hard.
Commissioner Hayne’s recommendations contained in his Final Report called for the financial services industry to make rapid inroads into cultural and technological transformation to put the customer first, simplify products and make it easier for people to understand the benefits available to them.
This will require an overhaul of legacy systems, the likes of which we have not seen before, made even more difficult for many of the major players amid the changing competitive dynamics of the industry. With CommInsure currently being acquired by AIA Australia Limited, TAL taking ownership of SunCorp Life,
Zurich’s takeover of OnePath and the sale of AMP Life to Resolution, one could argue the industry is necessarily inward looking at present given the volume of merger and acquisition integration activity.
The costs and complexity for those businesses trying to combine the technology of acquired businesses only further adds to the enormity of the task at hand.
It is not often discussed but the reality is that many of the systems the large insurers are using pre-date the invention of the World Wide Web by Tim Berners-Lee in 1989. So much has changed in the way technology is built and how it is used. Most legacy systems were built by the providers for themselves, to give them the information they needed and to capture the data their businesses required. The result is inefficient technology, designed to be updated once or maybe twice a year. It does not easily allow advisers and consumers to access the information they need in a user-friendly format and for the owner to update regularly.
Multiple systems make a single consistent view of the customer difficult, and information must be gathered from and stored across multiple back-end platforms.
MLC Life has already committed to fixing its existing IT infrastructure at a cost likely to be upwards of $400 million. With life insurers forced to spend colossal amounts of time on administration, this is a long-term plan that many will hope pays off without too much collateral damage.
As the first new entrant to the Australian life insurance industry in 40 years we have found ourselves in a very privileged position. Building a completely new platform for Integrity Life has been a key manifestation of our company’s DNA. The advantage of working with advisers to co-create a system that addresses their pain points with life insurers has given our team unique insights that guided our build. A 21st century system also means that it is designed to embrace change – particularly those changes that will improve the experience of users and those that allow us to easily adapt to the changing regulatory environment.
It has not been without challenges. Although there are off-the-shelf insurance platform solutions, the Integrity Life team recreated these standard building blocks to give us unconstrained control and flexibility to respond to future needs. This was a superior option to any alternatives available anywhere in the world.
Legacy systems are also challenged in their compatibility with other technology such as UnderwriteMe, the UK-developed underwriting engine that enables consumers to answer just one set of underwriting questions for pre-qualification, quote and application without having to repeat themselves. Integrity is currently the only Australian insurer that has been able to fully embed all parts of this technology into its own systems, reducing time and frustration for both advisers and their clients.
Integrity Life is the first cloud-based digital life insurer in Australia. We are committed to maintaining our focus on technology to ensure that it remains our competitive advantage. Ours is a platform that has been built for the needs of our advisers and their clients as well as our staff. Our technology stack makes information easily surfaceable and updateable in a real-time frictionless environment. Importantly it is a dynamic process that our team of 20 technologists can, and does, enhance constantly.
“Making the simple simple” is going to play a significant role in restoring consumer confidence in our industry. For too long consumers have had almost zero visibility of their policy-related information and been met with complexities and frustrations at every turn.
Simplicity and transparency are important values within Integrity. Our platform is giving consumers, via their advisers, control over choosing appropriate life insurance cover. Advisers and their clients can include the features that they need, see applicable discounts from combining benefits, and adjust in real time without the need to start over. This sounds simple but without the right tools it is not - and unfortunately the industry just has not been built on the right tool set until now.
One of the most important innovations our industry will achieve, along with innovation in products and better medical definitions, will be technology that demystifies the life insurance pricing process. By doing this, life insurers will be able to work in partnership with advisers to ensure their clients have the protection they need.
Chris Powell is the managing director of Integrity Life.
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