Q&A: Genworth’s IT Backbone Supports Speedy, Accurate Life Insurance Processes

Genworth life insurance CIO Mike Shadler and operations SVP Chris Olson talk about IT’s central role in the business, the company’s use of e-signature, e-application and automated underwriting, and how Genworth sees competitive advantage in data management, now and in the future.

Earlier this quarter, Genworth Financial (Richmond, Va.; total 2012 revenue of about $10 billion) announced the release of Foundation Builder Index IUL, the second of its index universal life products, which the company says are unique for their availability on a comprehensive, front-to-back electronic platform that significantly shortens the application and fulfillment cycle. In the wake of the announcement, Insurance Innovation Reporter spoke with Genworth’s U.S. Life Insurance Division’s Mike Shadler, CIO, and Chris Olson, SVP, operations, to talk about the division’s overall technology strategy in the wake of the financial crisis of 2008, and its use of a variety of key technologies, including e-signature, e-application, automated underwriting and data and analytics more broadly.

Mike Shadler, CIO, Genworth’s U.S. Life Insurance Division.

Mike Shadler, CIO, Genworth’s U.S. Life Insurance Division.

Insurance Innovation Reporter: Tell us about the role technology plays at Genworth, and in the company’s life insurance distribution strategy in particular.

Mike Shadler, CIO, U.S. Life Insurance, Genworth: We have explicitly stated in that technology platforms are the backbone of financial management, product, sales and service capabilities and potential. And that’s how we treat technology across Genworth. When you have that point of view, it doesn’t mean that you lead with technology, but that everything you’re trying to do as a competitor relies on an underpinning of technology. The philosophy has led us to focus on reliable and consistent system performance and to address technology obsolescence aggressively. We know that we need a solid foundation to build on. I would contrast our view to others. For example, you can look at technology as a necessary expense, or, alternatively you can believe that everything in the business is built around technology. We see ourselves as taking a position in between.

Chris Olson, SVP, Operations, U.S. Life Insurance, Genworth: That view is a critical component in realizing our business goals: we never design or build new processes without having the technology team with us. Both parties are at the table, so that design alternatives and requirements are evaluated and decided together.

Chris Olson, SVP, Operations, Genworth.

Chris Olson, SVP, Operations, Genworth.

IIR: How has Genworth’s overall business strategy shifted in the wake of the financial crisis, and how has that informed the company’s technology strategy?

MS: Earlier I referenced financial management, product, and sales and service. We’ve always been very competitive with product and sales and service. Leading up to the financial crisis, we invested the majority of our resources in those areas. Afterwards, we did a great deal of build around financial management capabilities, which includes actuarial and risk management, in order to put those capabilities on equal footing with the other two areas.

IIR: And how did that shift in emphasis shape your role?

MS: All those categories – financial, actuarial, risk – represent separate viewpoints of our business. As the CIO, it’s imperative to look across functions and ensure we are investing and building the right corresponding capabilities. This is one of the ways that we have the opportunity as IT leaders to bridge functions for the greater good of the business. These capabilities need good data and processes to support quality decision-making. It’s important to use a consistent source of data to have a common framework and enable similar conversations in a defined context. Often those are disjointed or separate conversations. We need to bring those together and enable consistent decisions to be made quickly and robustly – especially in the wake of the financial crisis.

IIR: Are you referring to a single source of the truth to drive greater consistency and transparency in business decision making?

MS: Yes. Some things may suitably be done on an ad hoc basis, but others should be a core competency across the business. One of our objectives is to create a core competency in those financial management capabilities, and that requires a very strong background of technology capabilities.

Regarding a “single source of the truth,” our goal is to use common data stores and, granular data elements for all we do, ensuring that they’re consistent and usable across all uses. It’s important that users are not questioning the reliability of their data and the results of their analysis.

IIR: What would you say differentiates Genworth’s technology platforms from those of competitors?

MS: To shift a moment from financial management – which is a work-in-progress relative to this question – we’ve been very focused in recent years on a discrete data element level. We’re 13 years into operating a life insurance platform that collects every part of what comes through on a life insurance application – such as lab values. We created a platform that allows us to process from a data element level, rather than from forms. It has provided a solid foundation for us to build capabilities using things like electronic applications or e-signature.

CO: That data element capture is an important competitive distinction for us – every time I talk to our suppliers of lab information, for example, we’re the only ones who want the data in addition to the image. That tells me we’re among the few companies using data at the element level. And the reason we do that is that you can automate data; you can’t automate an image.

MS: Yes, when you start from data element, you can automate from there and do analytics. Wemade notable investments in this approach a number of years ago and we continue to reap the benefits.

IIR: What’s Genworth’s approach to leveraging “big data” and analytics?

MS: That is a near future opportunity for us across various areas. We’re currently building foundational components and exploring technologies such as Hadoop. We’re looking at using analytics for things such as underwriting, marketing, brand awareness and more granular customer segmentation. It’s very much in the “toe in the water” stage now. I think that in the industry generally, you’ll hear conversations about big data, but it’s very much potential rather than reality at this point.

IIR: What are some of the challenges and opportunities Genworth is currently seeing with regard to life insurance and annuities distribution?

CO: I think that’s a good segue from our discussion about data: one of the biggest challenges the industry faces is getting information quickly and accurately in what has typically been a paper-driven environment. We use technology and process improvement to drive better accuracy, greater speed and thereby improve the distributor and customer experience. Our Life Quick Request capability delivers a median cycle time of nine days from receipt of application to policy issue. Half of them come in under that. That is the opportunity: the more we can shift to electronic solutions, the more we can bring the industry forward in terms of better cycle times and accuracy and ultimately, a better experience.

IIR: To what extent is Genworth using e-application and e-signature?

CO: We use e-apps and e-signature – including voice signature – for almost all of our products, including universal life insurance, term insurance and long-term care insurance,– and we’re working on annuities. Again, we believe that improving accuracy and speed will yield a better  customer experience.

IIR: How does that apply with regard to Genworth’s new Foundation Builder index UL (IUL) product?

CO: Well, it’s an example of how we’re working toward those goals. In creating an end-to-end electronic process, we were careful to integrate agency and producer workflows that already exist in our industry. In life insurance, the vast majority of our quotes are run in WinFlex today. So rather than finding another one-off solution, we made the choice to integrate with that platform. When a set of illustrations go out from an agency to a producer, there’s now a button to get a Genworth  e-ticket option. That triggers automated data processes on the back end, followed by e-policy delivery – which we have implemented for all of our life insurance products.

By the way, we’re seeing the same shortened cycle on the back end of the process as the front end. We’ve taken a 30-day settlement process from the time the policy is issued to being put in force, and we’ve brought that down to nine days as well.

IIR: Is WinFlex Genworth’s platform across lines of business?

MS: Index UL is on [eBix’s] WinFlex which is a multi-carrier illustration system.  It is one of many tools, both multi-carrier and proprietary, that we use.  The bottom line is that we have to be flexible and, as Chris stated, be willing to integrate with existing producer workflows to create a truly great customer experience.;

IIR: To what extent is Genworth using automated underwriting?

CO: We’ve taken an approach of automating where it makes sense and focusing on a high-touch approach otherwise.

MS: There was a time when many carriers thought fully automated underwriting was the way to go: put a rules engine in place, fully automate and limit the need for any person to look at an application. We think that the most powerful approach is to have the right experience at the time of underwriting, including the right touch. We believe the right human touch when partnered with great technology is a powerful combination.

CO: We are evaluating the next generation of underwriting technology, but in the short run one of the keys to our strategy is to make the complex seem easy. We have taken savings we’ve gained from automation and reinvested it in high-touch service. Previously, we focused on underwriting effectively, making offers and having limited contact with the field. In the case of IUL, we invested in a very high touch model. When an application arrives, we call the agency to talk about the case and to ensure alignment at the very beginning and throughout the process as opposed to simply shooting out an email at the end saying, “Here’s what the offer is.” This kind of high touch may not make sense for a $100,000 term life policy, but we use it where it makes sense. And we use automation to reinvest into the high-touch model.

IIR: What enhancements can we expect to see to Genworth’s platform during 2014?

MS: I would answer that by summarizing the topics we’ve already talked about. During this year we expect to have the majority our financial management capabilities built out. We’ll be making hard decisions about obsolescence and moving to modern platforms. We’ll also be upgrading from legacy web infrastructure, enabling it for current and future needs. We’re putting in more modern infrastructure to more easily operate across online channels, including mobile. Another initiative we’re working to complete is the multi-year  implementation of a new document management platform to create, manage and deliver electronic and printed customer documents. When finished, it will completely modernize our document generation capabilities. We’re using a third-party tool called HP Exstream and building customized templates to meet our needs. We’re also working to be generic or agnostic on vendor selection for printing, making it as simple as hitting a print button. Print is a very complicated legacy-based process for many people in our organization, and this will move us forward to manage production very robustly and be able to send just about any format, whether PDF, electronic, etc. This will all come together in a common platform handling all our printing.

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 [email protected] or (503) 936-2803.

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