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Author: Lena Chukhno, reading time: 3 minutes

What to Look for in a SaaS Partner

We’re excited to hit the road for some of the year’s most exciting conferences in the coming months and to meet more of you in person. The more we get a chance to chat, the more we realize how important the work we’re doing really is - both for carriers’ business goals and for today’s insurance consumer. It feels good to make life insurance more accessible. If you’d like more information on any of the content in this article, please reach out at [email protected]

Picking the Right Insurtech Partner

So you’re looking for the best way to start selling online life insurance? Of course you are. It’s 2022, and your target demographic is buying everything from mattresses to fiddle leaf figs online. You’ve probably taken a few calls - maybe had a few meetings. But how do you vet an insurtech partner? What should you know before signing on the dotted line? In our opinion, these are the top three factors: Strategic: Many tech providers have a set of technology that they really want to sell. Who wouldn’t want to pitch the thing that is easiest to roll out? The better alternative, though, are partners who understand your needs as a business owner (growth! margins! speed!) and can deliver beyond a standardized, one-size-fits-all solution. Look for partners who ask the right questions about your business challenges and goals. Are they trying to sell you their tech, or trying to find a way for their tech to assist with your company’s specific needs? Tech: Obviously you’re looking for the best technical solution to your business challenges, but how can stakeholders in other areas of the business, like insurance product or marketing, feel confident they’re choosing the right partner? Start by taking a tour of their already-launched technology and testing the user experience (Am I enjoying using this? Is it easy to navigate?). Then ask the deeper questions that will give you a true sense of the tech. Is it built in a modular way? What APIs and Data feeds are available? How easy would it be to integrate with your existing solutions? How long have historical implementations taken? Chemistry: The process of tech implementation is not without its challenges. And challenges are overcome more readily by a team of people who understand each other. When you’re comfortable picking up the phone, texting a quick question, or having a laugh with someone, the months ramping up to launch tend to go much more smoothly. But how can you measure chemistry? Spend time with potential partners away from the boardroom. Grab a meal or plan an activity together (we’re partial to axe-throwing in Austin) and get to know your day-to-day points of contact on a personal level. Would you hire them on as coworkers? Do they pass the vibe check? Another great way is to check with previous partners. Find common connections through LinkedIn and ask around about the nature of their collaboration and communication. Pick a true disruptor. Selecting a partner without a decades-long track record in the industry can lead to some doubt in the decision room. But you want a partner with fresh ideas, an innovative culture, and the ability to be flexible, adaptable, and visionary. (And one without conflicts of interest.) For added peace of mind, vet your team. Do the architects of the platform have depth of experience? Do they come from legacy carriers? We’re sharing what we’ve heard from carriers who have dealt with many vendors over the years - we’re taking these lessons and have become this type of partner - we hope to walk beside you on your transformation journey as well!  
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Author: Lena Chukhno, reading time: 3 minutes

Growth Is a Big, Yet Solvable, Challenge for Life Insurance Carriers

This latest edition of our newsletter focuses on helping life insurance carriers solve their growth challenges. I talk everyday with carriers who know growth will come through modernizing their products and offering streamlined customer experiences to serve the next generation of life insurance buyers. Fortunately, they also have the capital to fund innovation. But a key challenge is that legacy technology is limiting the speed of change and fragmented vendor solutions are not only inadequate, they’re often making everything more complicated. I recently wrote an article about the common growth problems I hear from carrier partners and, most importantly, how to address them. Some interesting themes have emerged.
  1. Among carriers with ambitious growth plans, the biggest obstacle is their existing technology infrastructure - it simply can’t support their vision.
  2. Modern customers’ expectations of the life insurance purchase process differ dramatically from just a few years ago. And so building a transactional product with an omnichannel enrollment and an instant or accelerated UW is on most carriers’ roadmaps. But the challenges of an in-house build are arduous. And according to industry research, 70% of technology transformations fall short of expectations.
  3. Carriers have a test-and-learn mindset. All too often, it’s prohibitively time-consuming and expensive to launch and iterate new products or features - again, mostly because of the technology that needs to support the changes.
Given the challenges we are hearing from our partners, I thought it might be helpful to also share a recent McKinsey report on how leading insurers identify competitive advantage and address challenges that limit their growth.

McKinsey Report TL;DR

“Insurers should carefully consider each part of the industry value chain and determine where they can and cannot reasonably have competitive advantage. And similar to other industries—such as auto manufacturers—life insurers now need to consider unbundling their value chains and doubling down on the right links.” Our tech = your competitive advantage.

You Might Be Wondering...

Q: Why should we trust an insurtech company to power our new life insurance business initiative? A: It’s simple. We make the process of innovating life insurance technology easier for carriers. Carriers spend millions of dollars investing in innovation teams and projects that often don’t yield the desired business results. So it’s understandable that tapping an end-to-end, single-source solution for your next innovation effort can seem daunting. But here’s the thing with Bestow. Our team has successfully built omnichannel products and experiences from the ground up. The result: delightful advisor and client experiences, improved product margins and operational efficiencies, and the opportunity to grow into new customer segments. With Bestow for Enterprise, we take all those learnings to our partners and personalize builds for your business goals. We’re an extension of your team, with demonstrated expertise in building and launching what your business needs. Thank you for reading, and we look forward to working together. Sincerely, Lena [email protected] Like what you read? Send it to a friend, colleague or, better yet, your boss. They can subscribe here.

About Bestow

Bestow is the first life insurance technology company designed to reach today’s digital life insurance buyers. We build instant, 100% digital life insurance products and buying experiences that unlock a massive consumer market. Companies of every size — from startups to public companies — leverage our software to sell life insurance and improve efficiency and profitability by managing the business online....
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Author: Lena Chukhno, reading time: 5 minutes

Life Insurance Carriers Have a Growth Problem — Ways They Can Solve It

Slow growth in the U.S. Life Insurance industry is not a new problem, but it is a problem that now has a new solution. Except for the COVID-related boost in 2020-21, the industry growth remained anemic over the past decade to a large extent due to the customer experiences that lag behind other financial products.Insurtech companies are starting to address the need for new-era life insurance experiences and capitalize on growth opportunities among new customers. However, true industry transformation — and reversing decades-long declining sales — I believe will require carriers to embrace new business methods.Carriers want to grow by modernizing their products and offering streamlined customer experiences to serve the next generation of life insurance buyers. They also have the capital to fund innovation. A key challenge is that life insurers’ technology stack is limiting growth. Legacy systems can prevent carriers from digitizing, which in turn prevents insurers from resonating with a new generation of customers. Additionally, outdated technology and labor-intensive processes substantially drag carriers’ profitability. A recent McKinsey report states, “Life insurance is one of the very few industries—within and outside financial services—that have seen cost ratios increase over the past 20 years.”Since I have been in conversations with several leading carriers looking for tech solutions, I hear that industry leaders know it’s time to innovate, rapidly. Here’s how life insurers can make the shift.

Catering to Customer Expectations

So what are the experiences that a modern-day consumer expects from a financial product? From my conversations, I’ve seen two categories of customer expectations becoming increasingly prominent.

Freedom to buy through the channel the consumer prefers

While many customers will continue to need an experienced professional to guide them through the life insurance purchasing process, the segment of self-guided customers is growing. These customers bank through mobile apps, get their loans and credit cards online, invest digitally, and generally are very comfortable completing financial transactions online. A way to cater to these two very different customer personas is to offer both agent-led and digital enrollment - preferably, connected through an omnichannel experience.

Ease of purchase

The proliferation of fintech and efficiency-oriented sales models reset the bar on what a delightful purchase experience looks like in financial services. Irrespective of a sales channel, customers now expect  that getting a financial product should take minutes, not weeks. If one can buy a car or refinance a large loan in 10-15 minutes, why should the purchase experience be different for insurance products? If the experience isn’t fast and easy, the customer is more likely to procrastinate and not purchase the protection they need.The barriers to redefining customer experience that we see across channels are lengthy application forms, medical exams and multi-week wait times for UW decisions. These barriers not only discourage consumers — they can make agents not want to sell life insurance and focus on retirement or investment products instead, reduce the digital funnel conversion rates and create an inflated cost load for carriers..

Getting Life Insurance in Minutes, Not Weeks

Providing life insurance in minutes requires a net-new life insurance product, streamlined enrollment and primarily fluidless underwriting. Every aspect of the end-to-end experience must be designed to speak to each other and yield the desired risk, pricing and bind rates your business wants.

Design transactional products

If you want to offer a product that customers can buy self-directed online or through an agent-assisted sale in 10 minutes, it helps to remove non-essential choices. Transactional products generally have a simpler design, with fewer riders and complex features and shorter application forms. Most importantly, it requires stepping away from the required medical exam for every customer. With a streamlined enrollment experience, consumers are only asked essential application questions, while the majority of the information required for underwriting is coming from data sources. This helps reduce burdening the customer and the agent with endless questions. Most importantly, the ability to collect the necessary health information without requiring a medical exam for the majority of customers (70%+) removes the biggest friction point in the life insurance sales funnel, boosting growth and reducing UW and case management costs.Fluidless underwriting for the majority of customers doesn’t mean a transition to simplified underwriting. Carriers need to support multiple UW methods, balancing eligibility, mortality, customer experience and carrier’s operational costs. Instant (automated) underwriting is the gold standard for its convenience and efficiency for all parties - powered by the use of industry-leading data sources and algorithmic decision-making, it results in strong mortality results for the majority of customers. For the remaining customers, ability to support refer-to-underwriter allows to balance mortality and eligibility outcomes.

Embrace a Platform Mindset

Typically, carriers are working with dozens of vendors to bring their products to market.This leads to a patchwork of integrations that have to be executed by the carrier. These integrations are costly and take a long time to implement, which delays technology transformation and results in millions of dollars in expenses and often dismal results. Duct-taping systems from multiple vendors together also limits the ability to implement future product or distribution innovations.To successfully implement new systems or data sets, carrier technology must have a platform that supports real-time, event-driven APIs. Due to historical systems and mainframe technology, many insurers are unable to do this successfully. This approach can make it difficult to build a seamless customer experience since each vendor will have their own unique experience. And this is new territory for insurers, who haven’t traditionally had to invest in user experience design. With a platform mindset, however, businesses build technology solutions that support end-to-end data exchanges where you can add, turn on, or turn off systems seamlessly. A platform is not siloed and enables constant testing and iteration. It is also extendable and scalable so it can service various areas of a carrier’s business — leveraging whichever platform features or data vendors are needed for success. While a platform mindset is newer to life insurance, this is a trend across most tech-forward industries. Platform approaches win as companies look to consolidate vendors and strive to minimize the number of integrations and disjointed experiences.

Engage the Right Partners

While embracing a platform mindset is key to digital transformation, there is an inherent challenge for life carriers: it’s incredibly difficult to execute successfully. Countless carriers we have spoken with have spent years and millions of dollars investing in efforts that haven’t achieved the desired business objectives. And they’re not alone. Boston Consulting Group research found that 70% of internal digital transformation efforts fail or fall short of expectations. And according to McKinsey, “For most insurers, building these capabilities on their own will be difficult and require significant bandwidth—taking focus away from their core business. This will create an impetus for the next generation of technology service providers to offer a more modern, customer-centric, integrated, end-to-end solution to serve both open and closed blocks.”Leaning on existing market-tested, end-to-end tech solutions can dramatically reduce the risks that come with internal efforts to build from the ground up. With the right digital partner, life insurers can double down on their strengths, which are product innovation, distribution engagement, and balance sheet optimization.+++Lena Chukhno is Bestow’s Chief Revenue Officer, overseeing the growth of the company’s Enterprise SaaS and Advisor businesses.  

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