Creating a Digital Insurance Company

(intro)

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; Techficient, transforming the protection journey with intelligent data and machine learning to drive better outcomes; and JourneyGuide, improving your clients’ retirement outcomes through interactive planning software.

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

(interview)

Sandy: Today, we’re talking with Jeremy Bill, Chief Insurance Officer at Bestow, about the trends, challenges, and opportunities he sees for the insurance industry. Jeremy is responsible for all aspects of operations, claims, actuary, and underwriting at Bestow and has over 20 years of experience in the insurance and financial services marketplace. Jeremy, can you tell us a little bit about yourself and how you got into the financial services and insurance industry?

Jeremy: Sure, happy to, Sandy, and first of all, thanks for having me today. Appreciate the invitation, appreciate the chance to be with you guys today. Yeah, so just a little bit background, I actually started in insurance right out of school. I actually had an internship in the actuarial department and was pretty sure I wanted to be an actuary and had an opportunity to work for a great company, worked for Sammons Financial Group for over 20 years and had a lot of opportunity there to kind of grow in the actuarial world and expand my opportunities as we went. So, only been in the insurance industry in my whole career.

Kevin: Jeremy, as a leader in a newer digital insurance company, how do you see the compliance regulation landscape changing over the next few years?

Jeremy: Yeah, Kevin, I think that the COVID pandemic has really had an impact on how regulators viewed doing things electronically. So, from a positive perspective, we’ve actually seen some pretty good progress in the recent years about being able to do things more digitally, etc., so I think there are some real positives there. People realized that doing things via paper and faxes is probably not the wave of the future. But there are also some challenges and I think some obstacles that we’re going to face as we go forward, and with that really comes the way that underwriting is done, the way that you utilize data, and really how companies really are taking their responsibilities seriously to protect information that belongs to the consumers. And so one of the things that’s obviously been in the news a lot recently, at least the insurance news, is really around proxy discrimination, making sure that the things that we’re using in underwriting unfairly discriminate against customers and I think there’ll be continued emphasis on that in the industry as we go forward. I think there’ll be a lot more states, Colorado is one, New York is another that you’ve seen some regulation around that, and so I definitely think that’s an area that we’ll want to keep an eye on as an insurance industry, but also especially as we look at the digital world and how we do things faster and more customer centric.

Kevin: What do you see as the future of distribution for the industry?

Jeremy: Great question and I wish I knew the answer with complete certainty because I would know where to put my chips. But I actually think that there’s a lot of opportunity for growth in digital distribution, people using, self-directing their approach on the internet and through their phone. I actually had a former coworker that used to use the analogy of a freeway and he used to talk about how there’s on-ramps and off-ramps on the freeway and I thought that was a pretty good analogy of how people will utilize digital means in the future. There are some people that are going to get on at the very beginning of their digital journey and they’re just going to stay on that freeway. They’re going to stay on it all the way through, they’re going to do their research digitally, they’re going to choose their product digitally, they’re going to complete their application digitally. All of it is going to be done digital and they’re going to stay digital all the way through. And then there’s going to be some people that are probably going to get on that on-ramp and do some research and get to a certain point and say, “You know what, I need some help,” and they’re going to take an off-ramp and there’s going to be a human there. Now, that human can be on the phone, it could be on a chat, it could be in person, and then they may actually choose to take another on-ramp back onto the freeway to complete their application and then maybe another off-ramp as they go and they need to service their contract. And so I actually think that that digital freeway, that idea of like on-ramps and off-ramps, is actually very helpful and recognizing just different consumers are going to have different points of entry and points of exit. I think that also reinforces, though, the idea that there is still going to be a role for the human agent that’s going to play. I think it’s going to be focused more on those more complex needs, places where people are going to need a little bit more hand holding as they go forward, maybe in determining which product to use, how to fund it, whatever it may be. I think that’s always going to play a role in the distribution of life insurance.

Sandy: Jeremy, what do you see as the main barriers to growth and innovation for the traditional insurance company?

Jeremy: Yeah, at least my experience in the industry has been that technology can be a pretty big barrier. You know, if you think about it as an industry, we’ve been selling policies for decades, in some places centuries needed. We’ve got technology that, in some cases, is 50-plus years old. And it’s hard to be innovative when you’re using technology that is mainframe based and very old and not a lot of people can program it. So I think technology is one of the big barriers. The other piece that I see a barrier is just, by nature, the insurance industry is risk averse, right? Like we have sustained ourselves for hundreds of years because we’re a little bit hesitant to take risk and we want to make sure that, if we are taking risks, we’re getting compensated for it. And so there’s a little bit of this tension, if you will, to be innovative means that you have to be willing to take maybe a little bit more risk than what the industry has been focused on. So those are probably the two biggest barriers that I’ve seen as it relates to innovation.

Sandy: Great. So what is Bestow doing to stay relevant?

Jeremy: Yeah, so, just as a little bit of background, if you’re not familiar, Bestow is basically a relatively new organization, we’re about five or six years old. So, our technology is very modern. We actually built our own technology for selling, underwriting, administering life insurance policies. And so we had the advantage of not having that legacy technology that we have to deal with, all of our technology is basically new, and so that actually has allowed us to do two things. One, it’s allowed us to be a little bit more innovative ourselves. We were one of the first companies that really offered that instant decision underwriting approach where you literally got a response back in a matter of seconds or minutes as opposed to days or weeks or even months so it allowed us to be innovative there. But what we’re doing now, which is really exciting from my perspective, is we’re leveraging that technology to support traditional insurance carriers. And so we recognize that there’s going to be a limit to how much we can reach consumers, how much of a difference we can make just on our own, but if we can harness the power of the industry, the huge balance sheets that insurance carriers have, and really enable them to do more with our technology, that’s a great opportunity for us to not only fulfill our mission, which is providing financial security to everyone, but also to utilize the great work that the insurance industry is doing as well.

Kevin: What type of strategic partnerships do you see as the most important?

Jeremy: Well, I would be remiss if I didn’t start with technology since we’re a technology company. I actually do think, though, that’s a huge opportunity for the industry. The insurance industry is great at managing balance sheets, managing risks, etc., but because of the legacy technology, it’s a lot harder to really build brand new technology and leverage that new technology. It’s also difficult to recruit, right? Like insurance isn’t quite as exciting of an industry as going and working for one of the big tech companies like Facebook or Apple or Netflix or Google. Those companies just have a little bit more appeal to younger programmers, engineers that are going looking for it. So I think technology is a huge opportunity to leverage partnerships. I do also think, though, that distribution partnerships are going to continue to be really important. We talked a little bit earlier about how distribution is always going to involve humans and I think having those relationships with distributors that are really out there seeking to serve the needs of customers is going to continue to be extremely important for carriers.

Kevin: What do you see as the biggest opportunity for the retirement and insurance industry over the next three to five years and how do you lead your team to continue to innovate and overcome challenges to make the most of this opportunity?

Jeremy: Yeah. I mean, I keep coming back to technology because I think it’s such a huge part of where we’re at as an insurance industry. We came through COVID and realized that the old way of doing things probably just wasn’t going to be sustainable going forward, that the customer expectations have changed, that the way people are interacting has changed, and so I think that’s actually a big positive. It opens up a lot of opportunities to think differently and also to reach more people that maybe weren’t necessarily reached in the past. One of the interesting things I think is what COVID did for us is that it actually expanded the universe, if you will, of people that were comfortable with technology. I think of not just my parents but my grandparents and the way that they leveraged Zoom or FaceTime or whatever technology that they utilized and they probably wouldn’t have necessarily done that without being forced to but it opens up new opportunities for how we can interact with people and what people are comfortable with in terms of the technology that they’re interacting with us as an industry. Now, as an industry, that puts some responsibility on us that we actually have to provide some of those tools to move forward beyond what we’ve had in the past. And so I really do think that’s a huge opportunity. For us at Bestow, we’re leveraging a lot of that already. Most of our people actually that apply using our platform use their mobile device and so being able to interact with people in the way that they’re used to as opposed to having to sit down on a laptop and, quite honestly, a lot of the younger generation, I’ve been surprised when people start at Bestow and many of them have never owned a laptop before and that just seems so like foreign to me but it’s like it’s because they’ve done everything on their phone, right? And if you haven’t needed a laptop, why would you go spend money on a laptop? So, anyway, it gives us an opportunity for us as a technology company to really leverage that change that we had, quite honestly, with COVID and gives us an opportunity, not just ourselves but as I mentioned earlier, leveraging it with our insurance carrier partners.

Sandy: Thank you. So, how do you see the potential entrance of Amazon into the insurance marketplace affecting the overall industry?

Jeremy: Yeah. So I see it in a couple of ways. If I think about Amazon, what do they do really well? Like they really do customers, they know customers, they make it super easy for customers, etc. They also give you a view of lots and lots of products, right? So if I think about how that could potentially apply to the insurance industry, I think the product one is pretty easy to see, like if they wanted to build a marketplace and have 20 insurance carriers on that marketplace so you can kind of see and compare and read ratings, I think there’s an opportunity there for customers to kind of see what’s out there and have a better idea of that. But if I also though think about the other side of it, like how do they focus in on the customer experience, they really can find those points in time where you might not realize it but you maybe should be thinking about life insurance. And I don’t know if you guys have had this experience where like I was just talking about that product to my wife two days ago and, all of a sudden, it showed up on my Amazon feed or my Facebook feed or whatever it is but like having those moments in time where maybe it’s you had a baby, maybe it’s you purchased your first house, maybe it’s you got a new job, and having those moments in time where, when you are thinking about life insurance, it’s there and it’s convenient. Now, part of that, though, with the insurance industry is risk selection, right? Like we have to make sure that — like part of our job as an insurance industry is to make sure we’re putting good risks on the books because we have to support that risk for years and years to come. And so how do we make sure that we’re utilizing as much information as possible to be able to make those offers when the time is right but also to make sure we’re not being selected against and making sure that the people that are coming to us are good risks as well? Now, Amazon, of course, has tons of data about people, having to make sure that if they could use it all, they probably would have a pretty good risk selection tool. There’s probably pieces of that that they maybe aren’t able to or wouldn’t be allowed from a legal and regulatory perspective to use a lot. So I think there’s some nuances there, I think there’s some opportunity, but, in my mind, one of the biggest opportunities that we have is to like really see how we can be customer centric in how we go about doing business.

Kevin: Thank you, Jeremy. Jeremy, what is one of the best decisions you made that had a positive impact on your career?

Jeremy: Yeah, that’s a great question. I would say one of the best decisions I made was to try and take advantage of opportunities that came in front of me. By background, I’m an actuary and so actuaries are typically pretty risk averse. Oftentimes, they’re pretty comfortable, likes the knowns, but one of the things I learned early on in my career is that if you only stick to what you’re good at and what you know, you’re not going to have the opportunity to grow and move and try additional things. And so, early on, I was encouraged to try to tackle a new opportunity and I learned a lot and grew, had another opportunity to grow and really just that aspect of really stretching yourself and trying new things. I actually thought I would be at the same company for my whole career and, about a year and a half ago, I got an opportunity to come to work at Bestow and I’ve definitely been stretched and challenged and have grown a lot through that experience. So, the biggest thing I would say is just really challenging yourself to kind of move out of your comfort zone, try something new, and really grow from that and look at it as a learning opportunity.

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

Jeremy: I would say it’s a great career path, it’s a great opportunity to really make a difference but also to grow personally. I think one of the things that we don’t always realize is the social good that we do as an industry. I’ve had the chance to be in a few industry meetings over the last couple of months and, Kevin, I know I met up with you at the Refocus Conference and Susan Neely was one of the speakers there and Susan’s the head of the ACLI and she just did a phenomenal job of talking about the good that the insurance industry does in the world, quite honestly, like it really steps up for people, especially life insurance, it steps up at a point in time where it’s kind of the worst moment that people are going through and it really provides that bridge of protection for them and really helps them navigate those really difficult waters. And so I think sometimes we forget in the midst of the day to day the good that we do and the impact that we have on families and businesses and communities through the work that we do as an insurance industry. So, I would say that’s one piece of it. And then I think the other piece that comes with the insurance industry is the opportunity, right? Like if I think about it from a technology perspective, we may have some challenges as an insurance industry but, boy, that’s an opportunity as well, an opportunity to make even bigger difference, to really help modernize an industry that is, quite honestly, 20, 30 years behind where some others are as well. And so one of the things that was kind of funny when I started at Bestow, I got a T-shirt in the mail, and the T-shirt had the Bestow logo on the sleeve and then on the front pocket, it said, “I work in insurance. It’s cooler than it sounds,” and I thought that was pretty funny for a tech industry, but it does kind of show us that there is something positive about what we’re doing and we do have a chance to make a difference going forward.

Sandy: Jeremy, thank you for your time today. It’s been great to hear your insights on how the insurance industry is becoming more digital and how technology is playing a part in filling the coverage gap for all Americans. Thank you for your time.

Jeremy: Thank you, Sandy. I appreciate you having me and, Kevin, thank you as well.

(outro)

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