Episode 11 with Richard DeSousa, SVP, Strategic Partnerships at SCOR – Staying Relevant and Embracing Technology

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Beyond the Challenge is a podcast where executives in the insurance and financial services industry share their insights and experiences. Hosts Kevin and Sandy Dougherty talk with today’s top business leaders about what keeps them up at night and the biggest opportunity organizations can capitalize on today. We encourage you to listen, share, and subscribe to our program.

Kevin and Sandy Dougherty each have over 20 years of experience in insurance and financial services, corporate leadership, and executive search. They’re the owners of Global Corporate Solutions and Global Corporate Leaders. Global Corporate Solutions partners with organizations to gain efficiencies and contain costs. Global Corporate Leaders partners with organizations to enhance and evaluate talent.

Beyond the Challenge podcast is sponsored by Exactuals, perfecting payments and the data driving them.

Welcome to Beyond the Challenge. Here are your hosts, Kevin and Sandy.

(interview)

Kevin: Today, we’re talking with Richard DeSousa, Senior Vice President, Strategic Partnerships at SCOR. Richard, can you tell us a little bit about yourself and how you got into the insurance industry?

Richard: Well, thank you, Kevin. Thanks for having me. Well, I’m born and raised in Canada, I’m in Montreal, and I started actually in an entrepreneurial situation where we founded a company back in the early 2000s and that migrated us into financial services and, through that, I got to meet a division of SCOR’s, which is called ReMark, which I ended up joining back in 2008 and so joined there and then have been working with the group for nearly — a little bit over 13 years and lived in four different countries and ended up in the role that I’m on today so not necessarily planned but that’s how I ended up here.

Sandy: Richard, all sectors face challenges, but in the insurance industry, the list seems especially long. Many carriers seem to be struggling to stay relevant while others are embracing new technology to help scale and cut costs. What do you see is the main barriers to innovation?

Richard: Well, definitely, I would say two: infrastructure and mindset. And so a lot of carriers, one of the reasons that they’re having trouble, it’s not necessarily for lack of one, it’s — if you look at the systems that they’ve had, the amount of investment that they’ve made in those systems, the fact that those systems were designed for non-digital distribution years back, the fact that it was really still very paper based, the fact that the world has digitized and many of these carriers would need to spend hundreds of millions of dollars in updating their infrastructure to really get there and that’s a big challenge and, you know, at times, you know, it’s difficult for them to really justify some of that investment. And the other one is mindset, you know, having the right people in place who really want to embrace that change, moving things forward, being comfortable getting out of their comfort zone, not sitting on their balance sheet and believing that’s just gonna carry them.

Sandy: Thank you. So, how difficult is it to change your traditional company to an insurer of the future?

Richard: It is difficult. I mean, it is difficult, it’s challenging. It’s not impossible and I am seeing companies who are doing it, who are emerging, I won’t, you know, given that we’re a reinsurer who works with many partners in the industry, I won’t name names, but we are seeing companies who either they decided consciously to create a different brand and have that company kind of planned for the future, either they’ve invested quite a bit themselves and they’ve reshaped what they’re doing, either they’ve spun off certain assets so it’s not easy but companies are doing it and they need to do it if they’re going to remain relevant.

Sandy: Thank you. From your experience, how can insurance carriers embrace innovation and transformation to improve performance and drive their long-term growth?

Richard: Again, it’s, you know, I think it comes really back to how open is the team that’s running the carrier to really look the challenge in the eye over the next five-year horizon and think what does it take for us to remain relevant from a distribution perspective? What does it take for us to remain relevant from a product perspective? From a servicing perspective? From how our products are accessed or for our branding and what role do we wanna play in that space? So, really, just being very conscious about what’s coming and start enabling people to make the changes to be ready for the next couple of years out.

Kevin: How can a reinsurer like SCOR help carriers shape the product and distribution landscape?

Richard: Appreciate that question because that’s pretty much we, my team, spends their time so I lead a team of very talented people who — actuaries, underwriters, operational folks who actually spend — we spend our time doing product development, working with distribution, working with carriers jointly on a tripartite relationship bringing new products to market. As a reinsurer, we have the vantage point of really seeing how the whole market’s performing, of what are some of the trends of investing and some of the data sources, of having the engines that can support some of that automation so really having all of the assets to be able to take underwriting knowledge, pricing knowledge, an aggregate view of the market, looking at distribution, combining all of that together and creating something that I would say is relevant and special. There are many products that are in the market but many of them look alike so if you’re just going to recreate something that’s already there, well, what’s so special in that? So if you’re going to bring something new, what we’ve found is that it’s not so much just the product itself, because the products still look very similar, it’s the process and the underwriting journey that accompanies that product and the relevant pricing that really makes a difference. 

Kevin: What is your opinion about the future of distribution as we know it today?

Richard: Yes. So, twofold. Number one, I think what we call traditional distribution, so face-to-face agent, career agents, you know, like the hometown distributor who knows everyone and is selling them insurance and they’re the trusted advisor, unfortunately, I do think that that’s going to continue going down and we’ve known it’s continued going down for years and not enough entrants are coming into the marketplace. Then you have groups that have tied career agents and they’re actually bringing in some younger folks but some of the more independent financial adviser model, I think, is going to continue having strain. However, where I do think that there’s some emergence is with all of the digital platforms that are available, with all of the direct-to-consumer platforms that are coming out, with the reality that we’re seeing that, unfortunately, even if there is a direct-to-consumer platform there, that if a consumer doesn’t know they need insurance to begin with, well, you’re not gonna get as much traction. You’re getting some traction but, you know, there’s still a delta there. But it also allows for what we can call digital distributors so literally folks who are part-time agents who are using these platforms, who could have their own business but can also make supplementary income as an agent the same way that they might make supplementary income driving an Uber on the weekends. And so that could be a way to start getting back into the, call it the small town distribution, but not necessarily using an independent financial adviser who only does that on a full-time basis.

Kevin: What type of strategic partnerships do you see working the best for carriers?

Richard: First of all, I’ve seen a lot more partnerships in the last two or three years than probably the prior, you know, five to ten years before that. So I think carriers and reinsurers who were very used to a model of “I’ll just build it myself because I don’t want someone else to own an asset,” I think people have really shifted from that viewpoint. So there’s a lot more openness on actually partnering. And then in terms of the partnerships, I think where carriers and reinsurers are basically looking at what’s my core capability, pricing, underwriting, maybe some technology but that’s really it and how do I partner with better distribution, with better tech companies that might enable distribution and my products to be accessed, with vendors or third-party data aggregation platforms who really know how to get and refine data, with AI companies that can basically refine what that data means, so really looking across the value chain and partnering smartly rather than trying to bring everything in house.

Kevin: Do you see outsourcing becoming more prevalent and carriers keeping more in house?

Richard: So, in terms of some carrier activity, I’m not seeing as much outsourcing of like the administration or the platform, I think that’s still, you know, for the ones who are doing it, I feel they’re going to continue doing it. I’ve actually seen more insourcing happening where carriers that said, “To be more agile on what I’m doing, I wanna bring this back in rather than keeping it externally,” so there are some instances of that in the market. Maybe more partnerships and pure outsourcing, per se, so I’m a little bit mixed on that one.

Kevin: What do you see as the biggest opportunity for the insurance industry over the next three to five years?

Richard: Definitely, I’m a huge fan, as I know both of you are, of distribution and, you know, kind of the evolving distribution landscape. I really feel the rethinking distribution period is the biggest opportunity. I mean, the protection gap is getting bigger, there’s a lot more digital solutions, there are less agents entering the workforce so how do you look at all of those then that you rethink how you access distribution and use these digital platforms to reengage, I would say, a salesforce that today might not be very interested? And I think by giving them much better tools, by making it much easier, by removing some of that, you know, most knocking door to door to have to sell, I’m hoping that we can revive what that means. Because if we don’t, that means that a lot more families are not going to get adequate coverage and we just went and we’re hopefully on the tail end and emerging out of a pandemic where we saw hundreds of thousands of lives and many of them did not have adequate coverage and weren’t well protected.

Sandy: So, speaking of COVID-19, how have you seen COVID change the digital strategy for carriers?

Richard: It was an absolute acceleration. What it did is — and, you know, I’ve mentioned this a few times in certain conferences or speaking engagements in the last year, March 2020, when the labs and all of the pyramids were basically frozen, stopped, like no one really knew, like everyone worked from home and that happened in a matter of two, three weeks and so the entire nation went from a work-from-home, no lab access, it was really difficult, no one wanted to go to hospitals, and that really forced carriers who didn’t have an automated underwriting platform, who weren’t doing anything aside from pyramids to create a digital platform, sometimes in a matter of weeks, and so the demand just skyrocketed. The amount of electronic health records being used in underwriting skyrocketed. The industry had been talking about it for years and saying, “Oh, eventually, we will get to a space where that’s what the future will look like,” but in an instant, the future fast forwarded to like right now, you know? If you don’t have a system that allows you to write new business, well, then, your doors are pretty much shut from a new business perspective for the foreseeable future. No one knew how long it was going to continue, whether it was a matter of months or a matter of years. It opened up quicker than I think people expected so there was a little bit of a slowdown but once you start down a path, you can’t really go back so I think it was an unfortunate situation but it was a tremendous accelerator for the industry.

Sandy: Thank you. What is the best decision you made that had a positive impact on your career?

Richard: The best decision I made, I would say, for me, personally, as difficult as it was, the relocations that, you know, my family and I have made, my wife and children have made over the years, have been phenomenal when I look back. I mean, I lived in four different countries, I got to see a lot of different ways of how groups operated in different cultures, how business is done in different parts of the world, I have a better understanding of — it’s one thing to assist the meeting every once in a while and see that it works different, it’s another thing to live, work, breathe in that kind of environment. So, definitely, for anyone who has the opportunity, who has the interest, that is something I highly recommend.

Sandy: What advice would you give to somebody looking to get into the financial services or insurance industry?

Richard: My advice to someone coming into the field is really look at what the industry’s purpose is, and it took me years before I actually started to really enjoy the insurance industry and now I really, really am passionate about, like genuinely I’m fascinated by everything that we do in the industry, about how life insurance is also about healthcare, it’s also about new technologies, it’s about underwriting risk, it’s about assessment, and when people come in, and I remember years ago, “Oh, insurance, it doesn’t sound like something super fun that people really wanna talk about,” but when you really understand the purpose of what it is, about giving financial protection and resiliency and, you know, one story that really touched me, I saw on LinkedIn probably about a year ago and it wasn’t even related to COVID, basically, a young mother with twins lost her husband while they were at Disney and she was on LinkedIn basically trying to accelerate her job search because she had lost her spouse and I just thought, you know, if they even had like an adequate level of protection, she wouldn’t need to do that. It’s bad enough, from memory, four-year-old twins, and she wouldn’t need to do that and that’s the kind of protection that the insurance industry is able to provide and so, for someone coming in, maybe a long-winded answer this time but someone coming in to the industry is really look at the purpose and really connect with that and if that attracts people and they really feel like they’re contributing, well, then you’re in the right place. If it doesn’t feel like it’s something that you’re passionate about, then it’s probably not the right place for you.

Kevin: Richard, thank you for your time today. It’s been great to hear about your insights on how carriers can stay relevant and the opportunities you see for the industry in the next few years.

Richard: Thank you both.

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