End-to-End Life Insurance Digital Transformation Best Achieved through Modular API Approach

When completed, carriers get a 360-degree view of their customers–understanding what their customers want, when they want it, and how they want to access it.

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The road to end-to-end digital transformation in life insurance is well known. Across the industry, carriers have recognized the importance of investing in such transformation to unlock quote-to-claim enhancements and subsequently reach more consumers and provide greater financial protection to individuals and their families. And in turn, technology providers are aiming to provide platforms to carriers that help them achieve their digital evolution goals more quickly and effectively.

However, even the best laid plans have unexpected detours, and achieving true digital transformation is a challenge for both new and legacy carriers alike. For newer carriers, modern tech solutions powering today’s transformations are not built with system integration as their central focus. For legacy carriers who make up the majority of the industry, legacy tech debt and older systems can hinder meaningful progress toward an end-to-end solution.

That said, the digital journey is too important for the industry to do a collective U-turn. Rather, we must recognize the challenges and start considering a new approach–moving away from an all-at-once mindset to one that leverages the power of modular API integrations.

Many Bites of the Digital Transformation Apple 

To be clear, end-to-end transformation is always our goal. But, based on real-world experience working with both established insurers and newer financial services organizations, we now know that for most carriers, end-to-end is not a one-time upgrade but rather an ongoing evolution.

Specifically, true digital transformation is an end-state that is best achieved through modular API integrations. Think of it as an insurance puzzle, where each piece is implemented, iterated on and improved at its own pace. When completed, carriers get a 360-degree view of their customers–understanding what their customers want, when they want it, and how they want to access it.

What’s shifted our perspective, and why do we think the rest of the industry should follow suit? It comes down to three key benefits for insurers, each of which is achieved through a modular, API integration approach.

  • Access to best-in-class solutions across their ecosystem. Every business has its sweet spot, and InsurTechs are no different. With a modular approach powered by APIs, insurers have flexibility to pick the best of the (vendor) best on a product-by-product level, allowing them the flexibility to select what part of a platform they want to use.
  • Low(er) risk. Managing risk is an inherent part of the insurance business, and that same philosophy should be applied to how we approach the transformation of legacy systems. Through a modular API-powered approach, carriers can test and prove technology in smaller, more manageable ways that lowers risk, provides optionality and allows for better prioritization.
  • Faster time to value. A complete end-to-end transformation takes time–and time is money. With a modular, API powered approach, carriers can start implementing efforts piecemeal. Consider the advantage of realizing the initial benefits of pre-built, standard integrations with third-party data sources in an API powered underwriting platform while continuing to iterate on what’s needed to optimize an updated policy admin platform.

A Standard Approach  

While a modular API-powered approach is the best route for transformation, hurdles remain. Namely, the industry does not yet have established API integration standards. While ACORD offers guidelines, innovation in the industry means next generation standards are still evolving and subject to interpretation by carriers, vendors or distributors.

Consider, for example, that more life insurance carriers are moving to fluidless or light touch underwriting. Integration standards on how to distinguish applicant underwriting types aren’t yet a perfect match. Additionally, many files being used to support these efforts were not originally created for life insurance purposes. Rather, they are being adapted from other financial services industries and retrofitted for use for life insurance products. Compounding the challenge for carriers and InsurTech alike is that, beyond retrofitting file types, each distributor may have their own file requirements. In turn, an InsurTech may have to support individual variations of the files based on distributors specific requirements–a maintenance challenge.

When integrations are standardized, the results are powerful. Take the work we did for one life insurance company, where we were able to power migrations from an outdated and expensive to maintain policy admin system to a more modern platform. Without leveraging API integrations, we migrated over 300,000 policies across 18 product codes and 3 legacy admin systems, resulting in over 20 percent in cost savings. That’s an impressive feat in and of itself (if we do say so). Now, as we add in the power of standardized APIs–we’re scaling that migration work without the need to disrupt any front-end servicing components. That means no disruption to customers or advisors.

Imagine what else the industry can accomplish when we standardize integrations across the insurance ecosystem.

Walking the Digital Transformation Talk

All the talk to-date about end-to-end digital transformation hasn’t been wasted effort. It’s helped garner buy-in from carrier executives, powered demand from consumers and even helped usher in innovation around the edges of the industry.

Ultimately, end-to-end digital transformation is a misnomer–for most, it is not something that can be completed all at once. Rather, it is an end-state that is often best achieved through a modular API-powered approach. The time to start progressing is now.

(Editor’s Note: All statistics based on one Haven Technologies client experience. Actual experiences may vary.)

Using High Tech to Scale High-Touch: Jeff Donaldson, SEVP, Mutual of America


Todd Rodgers // Todd Rodgers is the Chief Technology Officer at Haven Technologies (New York), a SaaS InsurTech focused on building flexible and customer-centric technologies to help life insurance companies unlock access to insurance. Prior to launching Haven Technologies, Rodgers was CTO at Haven Life (New York), a digital life insurance agency that takes a customer-centric, digital approach to improving the life insurance buying experience. In this role, he oversaw development teams to ensure delivery of a next generation customer experience in the life insurance industry. Rodgers has extensive leadership experience in defining and delivering large-scale strategic technology platforms in financial companies. Prior to joining Haven Life, he was at Citi Private Bank where he managed global development teams that worked to address complex financial needs of high-value clients.

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