LGA CTO on the Firm’s Innovative Horizon Digital Platform

Raju Seetharaman, SVP and CTO, LGA, talks about how Horizon built on the success from Legal & General’s digital innovation in the U.K. and preceded Covid-driven digital innovation by American life insurance carriers.

(Raju Seetharaman, SVP and Chief Technology Officer, Legal & General America. Source: LGA.)

Covid forced the life insurance to rapidly embrace digital transformation, but Legal & General America (LGA), the U.S.-based branch of Britain’s Legal & General, boasts that it was ahead of the curve with the creation of its Horizon digital life insurance purchasing experience, introduced in 2019, to ease the application process for agents and consumers. At its five-year anniversary, Horizon sees 36 percent of applications get an instant decision on a policy, and it is able to process 74 percent of applications with no additional labs. We talked about Horizon with Raju Seetharaman, SVP and Chief Technology Officer, about Horizon’s antecedents in digital innovations on both sides of the Atlantic at Legal & General. Seetharaman, who has been a guest on Insurance Innovation Reporter’s Life Accelerated podcast, came to LGA in 2018, following CEO Mark Holweger’s arrival from the U.K., at a time when the British firm saw a U.S. market ripe for disruption.

Insurance Innovation Reporter: Horizon has several components, but what would you call it in the simplest terms?

Raju Seetharaman, SVP, CTO, LGA: Horizon is a digital way of doing business. That’s the simplest way I can put it.It’s a digital process, a digital platform, and a digital operating model.

IIR: And how would you explain its main components and how it works of LGA, agents and consumers?

RS: As a carrier, we want to be easy to do business with—we want our agencies and agents to feel that it’s easy to do business with LGA. And most critically for me, I’m focused always on P&L. So, for me, Horizon has to have an impact on their bottom line and top line. What does it mean? I want them to get more commission, so there’s more revenue, and they get the commission sooner as well, so they balance the book better as an agency.

Legal & General Group logo.

Most critically, we want to reduce their bottom-line expenses so that they can make profit. We know that in term business, many agents who sell policies below 1 million make less profit, and we want them to make more profit and they don’t need to only focus on above 1 million to make a profit. So that’s a foundational goal for that stakeholder, which is because we have two stakeholders.

I always say there are three stakeholders for this Horizon concept or with digital platform, if you call that as one is the applicant is applying for life insurance. The second is the agencies and agents. The third is our own internal underwriters and administrators. It’s one platform, but it operates differently for the three different communities. For the agencies, as I said, the focus is efficiency so that there’s a better top line, bottom line.

For the applicant, it’s about self-service and an element of “I can buy life insurance with confidence.” For the internal staff, I don’t want to touch this application. The concept is “Why am I touching this? I should be touching it for a reason, and the reason has to be an exception.” That’s the way we looked at Horizon, and that’s the way Horizon works.

IIR: Horizon debuted shortly before the era of Covid-driven digital transformation, but it actually has much deeper roots. In fact its related to the digital transformation work that resulted in your being recruited for the U.S. operation.

RS: Yes, Horizon is the U.S. version of an initiative we did in the U.K. called OLPC—for Online Protection Connect. To give some background, in September 2000, I joined Legal & General as a part of a small team who was tasked to figure out how we could move away from telephone, paper, and mainframe green screens to an e-commerce model. The fundamental goal was to move from back office to front office. Everything was oriented to the back office, starting after receiving a phone call or a paper. There were tons and tons of people moving papers and filing papers and medical evidence. So, the goal we started in 2000 was, how to move from back office to front office, and how to reduce the cycle time.

The cycle time was measured in how much time it took from receiving an application on paper to issuing a policy. The question was how we could shrink that and shift it to the front office so the agent can control the application can control.

After beginning in 2000, we refined it every two years. So, if you look at the eight-year window from 2000 to 2008, we launched four versions.

IIR: Was this just a gradual evolution or did 2008 represent a watershed moment?

RS: It represented a completion, because it took us eight years to really master the problem. For example, receiving and processing medical evidence automatically. The underwriter typically has to look at four different sets of information.They have to remember the underwriting manual, they have to look at the self-declared application form, which the applicant has declared their medical condition. Then they have to go and look at what is the medical evidence that has been available, be it labs or APS, they need to read that. And then the fourth piece is their own expertise.  They have their own expertise of judgment calls, comorbidities and things like that.

So, it was a matter of moving away from a human being looking at tons and tons of information to not looking all of it and letting the machine is look at it for you, telling you everything based on rule-based assessment, not random assessment. And you approve it using the one in the four, which is the manual and your knowledge still is relevant there, but the two pieces are automated.

IIR: So, this got done and resulted in lower cycle times and other benefits?

RS: Yes, we were very successful between 2008 and 2018,

IIR: How does this lead us to Horizon in the U.S.?

RS: In 2017, we started investing heavily in the U.S. business. And in that case, we looked to bring in a vendor platform to do what OLPC was doing in the U.K. We spent close to $6 million in 18 months, and were looking to spend about the same amount as the system was growing bigger and more complex. However, it was not yielding results for any of the stakeholders.

I came in to the U.S. operation in July 2018, and said, “Guys, this is what our journey has been for 18 years to the team here and this is a way you can look at it.” So, Horizon as a concept was based on two things: success in the U.K. and failure in the U.S.

IIR: How did the Horizon initiative get rolling?

RS: In August and September, I gathered a group of 20 business experts who are very passionate about digitizing the U.S. business. I put them in what we called a Transformation Room, painted completely white. I put them in the room for six weeks and told them reimagine the business top to bottom. At LGA’s September board meeting I presented the concept, saying, “We know what good looks like. We have our scars from the last 18 months.”

IIR: What were the issues associated with translating a U.K. based concept to the U.S.?

RS: Obviously, the regulation is different, but we could transpose the architecture. The architecture was a matter of lift and shift, and there were other things we could transpose, for example, the underwriting rules engine. We could lift and shift automation, but we needed to tweak it and change it for what is suitable for the U.S.

IIR: So, this is really kicking off in 2018?

RS: Yes, and by the end of December 2018, both the group board and the local board approved the initiative and gave us a green light to move forward.

I created a business case for a two-year program with an investment of $10 million. We stood up cross-functional scrum teams and committed to deliver a major release every month. We also committed to a minimally viable product [MVP] launch in 20 weeks.

For 24 months, every month, we did a major release. We launched on May 1, 2019, and this May 1, 2024, we celebrated five years of Horizon success.

IIR: How was this new digital, highly automated platform received?

RS: When we took it to the number one stakeholder—the agents and agencies—there was a borderline antagonistic reception. Their biggest fear was disintermediation. Their feeling was, “We are the intermediaries, you are building the business and trying to directly go to the customer.”

We pitched the new approach on the basis of value. We asked, “How long does it take you to get a policy from a carrier?” And it could be anywhere from 30 days to 60 days. “In that 30 days,” we said, “What is the value you’re bringing?” They said, “We work closely with the applicant, we reassure them, we build relationship with them.” We said, “That’s great, but your value really is at the start, guiding the customer to say, what is the right face amount? What is the right term? What is the right price? Who is the right carrier? That’s where you’re really bringing your knowledge and value.”

IIR: How has Horizon changed the way that LGA processes applications?

RS: It used to be that the first touch to every application was by an underwriter—who is a very precious resource. Today, underwriter touches the case only after all the available information is there, which today is about 65 percent of the time. We want to constantly reduce that. But the number of touches has been reduced by 90 percent.

IIR: How did the launch go?

RS: As I said, we went live in May 2019 as an MVP launch, putting only 3 percent of our business through it. Every month we added more.

IIR: How much business goes through Horizon today?

RS: Today, close to around about 94 percent of our business goes through Horizon. There’s still 5 to 6 percent that doesn’t because New York State approval is pending.

IIR: LGA has characterized Horizon as helping the industry overall take a step forward in digital transformation since COVID. How would you defend that boast?

RS: As I said earlier, the number one metric is cycle time. The cycle times have come from 30 to 15. So suddenly, you’re freed up to do more as an agent, as a company, as an internal administrator, you’re freed up— 50 percent is gone, basically. So that’s a very, very powerful saving on the bottom line. cost of acquisition has come down for us.

the cost of acquisition for agents has come down significantly more than us. The benefit is even greater, because there’s less phone calls and related contact—that’s a very important metric. And that puts pressure on our competitors and our fellow carriers to say, how can I match that? I think it’s fair to say that drives innovation elsewhere.

I’m proud of that. And that I’m keen on talking about this, because I want to drive innovation in the entire ecosystem.

Again, I can go back and quote my experience in the U.K. In 2008, we were the first digital carrier, of course, the ecosystem smaller than the U.K. But by 2012, pretty much all of the carriers in the next four years became completely digital. And then the innovation kickstarted into the “buy it now” journey, right? Buy it now became possible in the U.K., because all carriers became digital. And that is where I see the innovation possibilities in the U.S. as well. It has helped LGA in the U.S. market, but I feel in the long run, it will help the entire U.S. life insurance industry, and of course the agents and agencies and the buying customer to do well.

Unlocking Faster and More Simplified Insurance: Legal & General America’s Transformation Journey.

Anthony R. O’Donnell // Anthony O'Donnell is Executive Editor of Insurance Innovation Reporter. For nearly two decades, he has been an observer and commentator on the use of information technology in the insurance industry, following industry trends and writing about the use of IT across all sectors of the insurance industry. He can be reached at AnthODonnell@IIReporter.com or (503) 936-2803.

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