Tackling the Unique Digital Transformation Challenges in Insurance

Jul 8, 2021 3:00 pm4:00 PM EST

Summary

During our virtual events, we encourage senior professionals to share & network with like-minded industry peers. Each session is moderated by a BWG Connect professional to ensure that our conversations remain on topic and answer critical questions that the audience truly cares about.

All audience members will have the ability to ask live questions and will have access to introductions to any of the attendees following the event. We're always open to making connections to others within our network as well. Come join the BWG Community!

BWG Connect & Socotra invite you to participate in an interactive discussion with your peers discussing the digital transformation divide in the insurance industry.

As always, there will be no sales pitches and there is no cost to join.

Discussion Topics

  • Reaching the modern consumer (tools, technology, and approaches)
  • Distribution & Business challenges
  • True Cloud & APIs
  • Vision for the future of businesses

Event Partners

Guest Speaker

Ken Holmes

VP of Sales at Socotra

Ken Holmes is the Vice President of Sales at Socotra, a core platform for insurance companies designed to develop and distribute insurance products that better serve customers. Ken has had a vast career in executive leadership, working for technology and software companies. Before joining Socotra, Ken was the SVP of Sales at Tubular Labs and the VP of International Sales and Global Alliances at NetBase Solutions, Inc.

Matt Hamilton

Matt Hamilton

Director of Product at Socotra

Matt Hamilton is the Director of Product Management at Socotra. He has over two decades of experience in product design and management and has an MBA in Business and Technology from Stanford. Before joining Socotra, Matt was the Director of Product Management at Guidewire Software and the Program Officer of Technology Investment at Omidyar Network.

Event Moderator

Greg Irwin

COO at BWG Strategy LLC

BWG Strategy is a research platform that provides market intelligence through Event Services, Business Development initiatives, and Market Research services. BWG hosts over 1,800 interactive executive strategy sessions (conference calls and in-person forums) annually that allow senior industry professionals across all sectors to debate fundamental business topics with peers, build brand awareness, gather market intelligence, network with customers/suppliers/partners, and pursue business development opportunities.

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Event Information

Jul 8, 2021 3:00 pm - 4:00 PM EST

Event format

Roundtable Layout
Featuring 20+ executives, where everyone can contribute, ask questions and learn from peers
On-Topic Discussions
Q&A format, moderated by BWG Connect with group interaction throughout
Make Connections
Opportunities to network before and after

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Key Discussion Takeaways

The world has been moving into a digital age for years. However, in the insurance industry, they might just be getting started. Many agencies haven’t uncovered the benefits of digital transformation and struggle with navigating these foreign waters. That’s why Ken Holmes and Matt Hamilton are here to help.

Ken Holmes is the Vice President of Sales and Matt Hamilton is the Director of Product Management at Socotra, a core platform for insurance companies designed to develop and distribute insurance products that better serve customers. They are leading the way for digital transformation in the insurance industry and are here to tell you all about it.

In this virtual event hosted by Greg Irwin, Ken Holmes, Vice President of Sales, and Matt Hamilton, Director of Product Marketing, of Socotra discuss tackling digital transformation in the insurance industry. They talk about the various definitions of digital growth, balancing priorities between digital channels, improving customer reach and experience, and much more.

Here’s a glimpse of what you’ll learn:

  • Ken Holmes and Matt Hamilton discuss Socotra’s role in digital transformation in the insurance industry
  • Ken shares a case study of how digital transformation impacted a company in terms of growth and customer experience
  • Why insurance agencies have different definitions of digital growth
  • How to navigate the relationship between agencies and brokers in the digital space
  • Tips for successfully balancing priorities through multiple digital channels
  • How digital transformation allows for a wider customer reach
  • Can you be digitally innovative in a traditional corporate company?
  • Matt explains how to test out different technology and digital strategies before completely launching
  • How to implement AI/ML while insuring against bias
  • Transitioning from paper to online transactions and customer interactions

Discussion Transcription

Greg Irwin 0:18

So let's start here with our co-hosts, Ken Holmes and Matt Hamilton. Do me a favor. Ken, why don't you start us off without doing the sales pitch? Give the intro of Socotra please.

Ken Holmes 0:32

Okay, great. Thanks, Greg. Yeah, no, no sales pitch, I'll try to give a background or if you will, maybe Socotra's, core technology, think policy administration system. So billing claims reporting, right underwriting rating, and core policy administration itself. So where it started was the founder as a technologist, not someone from the insurance industry and recognized an opportunity to modernize, if you will, or insurance being one of the laggard spaces where people are talking about digital transformation, but hadn't made great inroads, at least on the back end, back end systems, there's a lot on the front end, if you will, from modernization of the customer experience, but the back end core policy administration system less from a true cloud-based API, microservices approach, so the company's eight years old, now a little probably more than eight years old. Now. The first five or six years, we're all about building this policy administration. core system, there's no faking it, you either can do it or you cannot. So didn't require a lot of customers or really try to go to market until it was ready. But last couple years, got product market fit with some of the early, early customers that were on swing the last two years, it's been about adding, adding customers and go into market and really trying to grow the company. We do both.

Greg Irwin 1:59

Hey, Ken, I'm gonna go to some real basics. Yeah. How many employees? How many? How many customers do you have?

Ken Holmes 2:07

25 customers or so.

Greg Irwin 2:11

Are they tier ones? Are they tier fours? Or what's what's the mix?

Ken Holmes 2:14

Tier ones to insure tech startups.

Greg Irwin 2:17

All the way across the board?

Ken Holmes 2:19

Probably some of each.

Greg Irwin 2:21

Is it commercial lines, personal lines, life, auto, what's, what are people using?

Ken Holmes 2:27

Yeah, all PNC lines, and life insurance, and life.

Greg Irwin 2:30

And life. Got it. And now, as we You and I have spoken, I typically think categorically about people deploying these apps for Billings policy claims. Is there one primary function that you're being used for?

Ken Holmes 2:50

That's a great question. I'd say, you know, I'd say policy administration. Each of we have some opportunities where customers are thinking about, maybe I keep my core pass itself, and use you for the API and flexibility to hook things to it. But we don't have any customers in production like that. So I'd say each of our production customers uses our pasts. They might use third party claims, they might use an external rater, you know, or use a co tra, but the core commonality probably is the core pass itself.

Greg Irwin 3:19

Okay. Great intro. Great way to get started. Alright, let's bring that in. Matt, do us a favor, give a quick intro to the group?

Matt Hamilton 3:27

Sure. I'll make it real quick. Matt Hamilton, I'm the Head of Product here at Socotra. I've been kicking around in Silicon Valley for a few decades, almost exclusively in product management. And now I guess it's more than half of that is Yeah, product management for insurance core system. So my biggest relevant experience before this was 10 years at Guidewire. I was a fairly early employee, I joined about the time that Guidewire was the size that circuitry is today. My initial mandate was to research whether guidewire should build a billing system we concluded Yes, I was then put in charge of designing and implementing that product it's called billing center and lead that through four major release cycles and in that old on premise world a release cycle means 18 to 24 months so that was a that was a fairly long time also plenty of exposure to claims and and and in policy had been underwriting analyst and some other things. Came to Socotra because I like what they're doing the way they're doing it, but we should make no mistake Guidewire is a company with 1000s of employees. They've got a lot of great stuff. I'm very proud of what we did there. Socotra is much smaller, but honestly, I think we got a better mousetrap. So so I'm excited about being here and see where it leads.

Greg Irwin 4:52

Alright folks. Let's get into the topic. And Matt, I'm gonna ask you if you can guide us there to get started. You know, I like customer stories. So I'm going to ask you for that in the context of digital transformation. Can you explain for us in somewhat practical terms? What digital transformation means for one of your customers?

Matt Hamilton 5:18

Yeah, and Ken I think you were gonna jump in on this initial little bit, but then I can I can take it from there.

Greg Irwin 5:24

Sounds good Ken. Yeah.

Ken Holmes 5:26

Yeah, I'm happy to give an overview all all speak to. I'll speak to Hippo, we can talk about their name publicly. And we'll talk much about their lines of business, that kind of thing, but we can talk to them publicly. So digital transformation for them, they they homegrown built their existing business that they became a unicorn on with their 3 million or 4 million or whatever they're doing in their core piece. Now, they sought to take on new lines of business outside of just homeowners adjacent spaces around homeowners, and did a survey the market to try to find a partner that was Yeah, SaaS flexible, could move at the speed of Hippo, these are their words. And frankly, we asked along the way, who else you're competing with, they said ah, we'll either keep building, if there's nothing else out there that can move as fast as so for them digital transformation, they, they focus greatly on individualizing, the customer experience, that front end, minimal questions that are really hard hitting to define if the customer is the right type of customer for them or not, and what the rating and the price should be, they want to make the back more of a utility that it it works, they can do it themselves. It's quick and nimble, they don't have to spend 10s of millions and many years getting it ready, that kind of thing. So digital transformation for them, they're attacking new lines of business, and they're trying to release every six months, they got their first product out with us in three and a half months. They're already working on their third. So for them, it's, that's what that means to them is that speed of doing something brand new, certainly leveraging, you know, copy and paste what they can over and get some synergy in a whole system. They didn't want modules or disparate systems bundled together so that they could move faster. But they also didn't keep maintaining the developer level to that on their own.

Greg Irwin 7:22

I like hanging on that. The idea of faster releases, but not so much in terms of a product was not so much in terms of technology release in terms of Alliance off. Right. That's, that's that sounds like a pretty fair definition. Can you you know, launch personal lines in Texas in six months. With with the full stack at scale. But that's the definition there.

Ken Holmes 7:54

That's right. That's that's at the speed that they want to go. Yeah.

Greg Irwin 7:56

Yeah. Let's broaden it. I want you guys to be in the middle of the conversation. But I do want to give it a broad conversation. So I'm going to ask Lisa, if she would be so kind as to go next. And by the way, you don't have to turn cameras on. But it would be great if you did if you're able to. So not just for you and Lisa but for everybody if you're able to turn on your cameras if you're in a spot and yeah, and you have had the ability to focus. That would be cool. But understood. Alright, Lisa, let's go to it. Great to speak with you again, do us a favor. Quick, quick intro.

Lisa 8:35

I'm Lisa, Enterprise Architect, which is quazee government organization that deals solely with auto insurance, both personal and commercial lines. So we are mandatory insurance for basic and optional for comprehensive collision optional insurance. And recently, just recently, like two months ago, moved to our what we're calling enhanced care with this, which is a type of no fault. And that was able to like significantly significantly up to $7 million in health coverage for our customers and took our premiums down by 20%. So a massive project was a almost two years in the making. But things are working so far, and we were even able to give people back a refund on their or their last term. So, we were really happy.

Greg Irwin 9:41

That's awesome. Lisa, my core question, what how do you define digital transformation or in practical terms like?

Lisa 9:51

That's a good question in practical terms is really the key to that question because the more articles you read digital transformation means a whole bunch of things. Typically what people refer to is self serve. Yeah, okay. Well, you know, I just want to do it myself. But I think there's a lot of other things surrounding digital transformation. It's not just about sort of opening that front door for something that really needs to start at the back end at the whole way that you are run your process, thinking about it in that digital service perspective. And this is where we're struggling, because when we're talking to the business, and we're asking them for a digital strategy, where do you want the business to be? How do you want to show up for the customer in this digital world? They're really struggling to get around those concepts. So usually, what we hear back from them is a laundry list of services that they want. And they typically have a hard time understanding like, how do you want to actually interact? What does the customer experience going to be? Totally? from soup to nuts? So how are we going to identify that person when they come to our front door? How are we going to support them? How are we going to give them the right information at the right time? How are we going to tell them that, hey, I see something, you know, from my data analytics, machine learning, you're in this position of life, you know, here's some, here's a product that might be suitable for you, you know, I see you've got a 15 year old, here's some new driving facts for that student. Those types of things. And that's just not on the business radar, right? yet. They were looking at very siloed services. And that's how they're kind of being developed because the requirements are very siloed. And we're struggling with that. So we're trying to push take a look at it a little bit more from an IT perspective and helping the business take a broader view. One of the things I noticed in the meeting, title here is said unique digital transformation challenges and insurance, thinking, I was just sharing this one thing. So what's unique about insurance in terms of digital, and I just share, one thing that we're struggling with right now is we're we've got online claims, we have online policy estimating we're working on right now where for online renewals, through the Policy Center framework and their portal piece by customer engage. But from an insurance perspective, the thing that's been quite a bit of a struggle is the broker community. So our brokers don't work directly for us, we partner with the brokers as the as the channel. But we do have an a contract with them, that we will use them as our service channel, meaning they still expect to be involved and get a commission. So that means in the digital process, even when the customers do it themselves, the broker still needs to be involved. So they're still going to have this review process to essentially confirm that the customer hasn't done damage to themselves and put them in a risk position. And that will allow the broker to earn their commission. And so we had all sorts of questions about well, when does this review happen? Does the customer have to wait until that review process is done? What if they have an issue then how do they connect with the customer? Do we hold their commission? a whole load of weird questions that we ended up with but that's something that we're still working through?

Greg Irwin 13:36

Are you permitted to sell directly to the consumer? Or are you required to sell through brokers?

Lisa 13:42

I don't know. Like, like from a legislators point. perspective, I don't think that there's anything holding us back. It's really around this contract that we have with the broker community. And we've we've made a commitment to them that we will use them as our, our sales channel right now. I think they're very fearful of that they were gonna take their business away. So yeah, we're, we're, that's why we're trading down this road. Who knows what's gonna happen in the future though.

Greg Irwin 14:10

Please, I want to jump into it. It's a huge point. And I think we should all talk about it. But But I think there are current theories, and the most obvious being Tesla, who's basically come out and said, you know, the dealership model is not necessarily it is. It's a structure, it's important, but it's not always the best. And so they've gone direct consumer. Or, you know, you see lemonade, or in some of the others are doing direct consumer. There is certainly an opportunity, these innovators or perceived innovators, I think, in many cases, what they're doing is they're just going direct consumer in some of these some of these cases. I'd love to hear across this group, anybody who's tackled that form of transformation, maybe embracing the channel, or impact or in parallel with the channel. Does anyone want to Gavin? Let's do it, man.

Gavin 15:25

Yeah, so I think what's interesting and I agree with Lisa about sort of what's unique about it is when you talk about that dynamic between direct to the customer, we consider our customer, anybody who buys our policy, but also any agents or brokers or anyone else who sells the product, as a company who has to really cater to all three of those different groups in very different ways. It's sometimes it's a hard balancing act to be able to do that effectively, across What are really three different viewpoints of consumption of a single product. Right. So it's, it's something you always have to think about, like your, your sort of digital storefront has to encompass people who work for you, customers who are buying your product, and then someone who is selling the product your product to them, but they have absolutely nothing to do with you. They just sell insurance products, to three totally different viewpoints. And you have to service them all equally.

Greg Irwin 16:29

It's so funny, I just saw an episode of The Office where Dwight was trying to beat the computer. And they were all like in the office, like rooting them on and trying to compare and competing against other computer doing on direct sales. Yeah. Sorry, for the aside. But yes, having to embrace like the channel because and it's probably organizationally really challenging because your sales team may not be so keen on that transformation strategy. So it really has to start at a very senior level to to get everybody aligned that yes, we're doing this. Yes, we're cognizant of the impacts. And this is how we're addressing it.

Gavin 17:19

It's definitely a balancing act of priorities. When you talk about that we want to introduce you to product to the market, you have to think of the impact it has on all three very different categories in that space. Are we alienating our brokers? Are we alienating our agents? Are we alienating our customers, like making sure you have a good front face to all three of those is extremely important.

Ken Holmes 17:42

And that'll cost you revenue opportunities, but also the cost of service and maintain when you know, you have multiple ways to deal with your customer. And the costs of service underneath? Can't get out of hand. So yeah.

Gavin 17:55

And I would say to your earlier question, Greg about like the digital transformation, it really means like reaching our customers. And like I said, that's, that's agents, it's brokers, that's direct people, you know, who buy our product, it's really when and how they want in the form that fits to them. And so it can be like, it could be the phone, right, which people utilize all the time. But it could be texts, it could be chatbots, it could be video, online, offline, you need to have all of those capabilities available. Because all of your customers are coming to you in different ways from people who want to do it all themselves to the people who need their hands held through the entire process.

Lisa 18:35

Right? It's even it's a worse it's a blend of those things. So as they're trying to do an online transaction, they get stuck. How can that transaction then seamlessly blend over to an agent either on the phone or in person?

Gavin 18:49

That's fine. And you certainly can't tell them? Well, let's start over. Right? Okay, get you to know where you were. Right, exactly.

Greg Irwin 18:58

So let's get let's go to a story. Gavin, Gavin, if you want to try one, or I'll open it up to anybody, I'd love to hear on as many people actively involved as we can. So if somebody has a story of successes or challenges, trying to deploy that self service model that I'd love to hear. Gavin, you have a an anecdote of success or challenge in this regard?

Gavin 19:24

Yeah, I mean, I think everything we do is a learning experience in that area. We've tried doing some like simple product type of things and rolled them out to see what the market was related to it and took them away. When we realized like it wasn't working out, I think, but you know, I worked so I didn't introduce myself, but I'm a senior architect for Liberty Mutual. So we're sizable company. We sell a fair amount, especially within the United States of both commercial and personal lines. And so one of the things early on, was that discussion around can we release As products, and then cancel them without affecting our brand image, right? That was a big sticking point like, Can you try stuff out and fail as a company of size, where people know your name. And so it becomes a little bit harder as an over 100 year old company to try out new things knowing they could fail. And insurance people don't really like to take that kind of risk. especially early on. I think that was a pretty big shift in the leadership here to start embracing experimental things that we knew some of them would fail.

Greg Irwin 20:44

Great stuff, Gavin, stay involved. Let's, let's stir the pot a little bit. I'd like to invite in Chris over at Citizens. Nice, nice to meet you. I'm not gonna take a shot at the last name. I'm gonna ask you to introduce himself if you wouldn't mind.

Chris 21:04

Absolutely. Chris. It's not exactly pronounced as it sounds there. I need to buy a vowel. I'm the director of enterprise architecture at Citizens happy to be here today. And yeah, for us.

Greg Irwin 21:17

The basics. Tell us about Citizens.

Chris 21:19

Yeah. So yeah, Citizens is the insurer of last resort for property insurance in the state of Florida. So we don't get any of our funds from the government. But we were put into place through regulation to be the backstop for insurance. And right now, the market for property insurance in Florida is not very good. So we're growing. We're growing at a pretty heavy rate. When I joined Citizens, about 12 years ago, we were at 1.4 million policies, then we went down to like 450,000, we're going to approach 800,000, again this year. So because of the health of the market right now, we are getting pretty big. Yeah, we do. We do write our policies through agents. But we have board members that turnover every two years. And we get new ones. And so we have new board members asking the question, right, should we be looking at a direct model? And or should we be continuing to embrace the agent? So the question you're asking about this is certainly very relevant, probably for a lot of companies and for Citizens as well.

Greg Irwin 22:24

You. So tell us about a project. Now, it doesn't have to be the reinvention of doesn't have to be open heart surgery. But, you know, tell us about something that's, that's keeping you busy.

Chris 22:38

Oh, keeping us busy. So we are working on our cloud transformation efforts. So we have our own data center right now in a leased facility. And we are working on getting all of our applications and infrastructure into the cloud. And certainly, we prefer SaaS applications as we buy new things and replace existing applications. But for those that aren't scheduled to be replaced to SaaS applications, we're working on moving infrastructure over into the cloud. So that's a big one. I'd also like to mention that we have wrestled with the definition of digital transformation as well at Citizens, for us. And to me transformation means we're actually doing something different with our business model. And right now, we're not doing that. But we have had this kind of debate within IT leadership that I was in the center of, nevertheless, what we've defined digital transformation. As for us as those self service initiatives, I think Lisa mentioned it self service initiatives, electronic documents, electronic signatures, customer facing portals, things like that. So a variety of initiatives that we've got in the hopper that are related to digital, that that's how we've defined the transformation. I suppose if we decide to go direct, certainly, that would be a digital transformation, because that would be a transformation of our business model. But we have not made that decision as of now.

Greg Irwin 24:04

I got it. Awesome. Chris, do you have any? Do you? Do you have a question for the group that you'd like to hear about? I'm going to keep going. But I'd love to carry other people's questions as opposed to my own. So what would you like to hear about as I continue around our group?

Chris 24:18

I think this is terrific. So I think how, yeah, no, I think the other companies are defining digital transformation in their companies, because we've even wrestled with the definition, like I've said, and this is what we settled on for us for now. Because I was arguing just about everything we do is digital, you know, every project that we do, we're we're automating manual activities. It's more digital optimization, perhaps unless we're changing our business model. But we've decided digital transformation for us. It's just those self service on electronic document type of things I mentioned, but even even debating on what it is, I think is an interesting topic.

Greg Irwin 24:57

Got it. Alright, great stuff, Chris. Thank you very much. stay involved, folks. The chat is getting lonely. So please show it a little love. Let's go over to Matt. Matt, nice to speak with you. Let's first check, see if you're on the line with us.

Matt 25:16

Yeah, just got unmuted. Thank you.

Greg Irwin 25:18

Cool. Do us a favor, give us give us a real quick intro on Pacific Life and maybe your focus in Pacific Life?

Matt 25:25

Yeah. So I'm Matt, I run corporate strategy here. We are, you know, we have some global businesses, but we're predominantly at our core life insurance and annuity provider. Definitely, as the industry is, we're very focused on various aspects of digital transformation, including how we distribute our products. We are 100% sold through advisors of various different stripes and colors. So that, that and the nature of our products, very much shapes, kind of what our optionality is, and what are you know, what levers we have to pull around digital transformation. So maybe with that, that backdrop, I'll turn it back to you for any specific questions. And I'm going to if you don't mind, I've injured myself this week, and I'm spending much of my week on the floor. That's kind of back injury. So I'm not going to turn my camera on for this one. But I'm here with you in spirit, no worries, hope you're okay. Yeah, no, I'm good. I'm just waiting for the spasm to go away.

Greg Irwin 26:24

All right, Matt. Matt, the question is, how do you innovate innovators dilemma, in a corporate strategy job, that's probably something you're familiar with? How do you not not not ruin the all the cash cow and the, you know, all the legacy business that generates, you know, that sustains you?

Matt 26:51

Yeah, there's a lot written, you know, the pundits, the consultants in our space, all, you know, draw inspiration from Amazon, and Apple, and, you know, we all know the companies and tell us, we should be more like them. And our pace of innovation is set, I believe, externally more than it's set by us. And our you know, we are 150 year old conservative life insurance company. But I've been a part in this role in in other roles with other companies, I've been a part of many efforts to really take take the leading me on the leading edge of innovation, and, you know, create products, create solutions, create digital experiences, that engage consumers in a new way and transform the way we go to market. And I've seen them fail for for many reasons. But, you know, to the extent that we're we're distributed through advisors, and the companies they work for, there have been many times that we've tried to go to market with solutions that allow them to be more digitally relevant, and they're just not ready, they're not ready for us to connect. And then I've been engaged in projects, which are more have more of a direct to consumer flavor to them. And the difference in our products, and you know, compulsory products, like if you want to buy a car, you better have auto insurance, if you want to take out a mortgage, you better get homeowners insurance, our products are not compulsory. And we we spent the first part of this year engaging with consumers, psychologists with venture capitalists, with a lot of really interesting people who are thinking deeply about how consumers act and what they want from our industry. And we concluded that people just aren't ready to wake up in the morning and go buy life insurance. They need a human to get them involved in the process and to get them over the line. So trying to put our products online, be the legacy products or be the more simplified transparent products with a nice experience. People just aren't going there at scale. And I always end those sentences with the words at scale, you know, you see huge growth numbers that that the digital upstarts in our industry have posted through the pandemic. There are some very small basis. I saw an article today, the research was a bit questionable, but it said that 75% of people, I think, 18 to 44 are questioning they bought life insurance during the pandemic or questioning their purchase, I'm going to expect a lapse in the methodology of that research, maybe leave something to be desired, but I think directionally, we're going to see that. So innovation in our space. It's it's not as obvious as the pundits would make you think so, you know, for us, I think it's not as much about the classic innovators dilemma. How do we innovate without destroying our core is how do we innovate in a way that is actually relevant for the value chain that we play? And it's hard. It's a non obvious outcome?

Greg Irwin 29:51

Well, I'll ask the same thing. What's one initiative you've got underway? Maybe it's just maybe it's enabling your channel? Maybe it's Yeah, no. Yeah, for us, you know, you know, what I would love is simplifying pricing life insurance, that would be an amazing, an amazing thing. There's lots of ways to do it, right?

Matt 30:14

Yeah. When, when we innovate. Or when we look for opportunities to digitally transform. And by the way, this is a very textbook definition. But we do follow that digital transformation is using, you know, technology to transform customer experiences, data and analytics and streamline processes. And when we look for ways to do that, or I always think of it, there's a strategic lens, and then a business case lens. And for something to pass both of those lenses it nine times out of 10 ends up being focused on our advisors on our channel versus on the consumer. And when it's a consumer effort, it's more around, where we can streamline experience and cut costs, far more so than where we the business case just hasn't bear out for where we can streamline experiences to the consumer, and grow revenue. So that leads us with a lot of streamlining of the new business process, you know, working, working with our advisors working through our channel to create better experiences. Obviously, underwriting is critical in life insurance right now and making that more digital, more streamlined, more automated. So we've seen a lot of, you know, I'm in corporate strategy, and a lot of this happens in the decisions. So I'm not the day to day expert here. But how do we move we've created for instance, a pizza tracker that lets advisors know where their application is in the process. We tried to cut time out of the process.

Greg Irwin 31:39

Man, I gotta say, I love that you call it the pizza tracker. Like, honestly, think about that. One business you think you could never innovate would be pizza delivery? Sure. It's pretty brilliant. Yeah, the pizza tracker. I love it.

Matt 31:59

Yeah, you got it. Thank you for that good, good affirmation of our imagery there. You know, moving more, more flow more of our service flow through chatbots things of that nature. Yeah, yeah. So you know, nothing, nothing revolutionary, nothing transformational. But for our industry, it really is progressing things. And like I said before, we have to move at the pace of distribution. And finally, through the pandemic, we've seen distribution, their use case and demand for use cases, this Finally, I think, accelerated to where we've wanted to try to better serve, though.

Greg Irwin 32:33

Cool. Awesome. Matt, thanks so much for taking some time. And you got it. Thank you. You got it. Cheers. Thanks. Matt Hamilton, I'd like to come back to you for a moment. There isn't a company on the line here that doesn't have a sizable investment in technology over the years. I'll ask a simple question difficult to answer. If they wanted to do a test, a six month test, how do they do that and still leverage the customer databases, the customer data, the the outreach channels, and all of the huge amount of text? I don't want to call it debt. But let's just call it huge amount of tech. That's already?

Matt Hamilton 33:20

Well, yeah, let me let me let me try to frame my response to that, because that's, that's pretty good in the discussion so far has been fantastic. And what's really struck me is the way that everyone is talking about these different slices. When we talk about innovation, or in talking about transformation. I mean, this, someone else means that and, and there's so many different ways in which you could potentially add value. And I think it's up to everyone in the room here to figure out their own path. When I was in Guidewire, one of the things in addition to the good work we're doing one of the things I scratched my head about was doesn't have to be so hard. And it seemed harder than it had to be. And I think I unpacked why that was. And my conclusion was that the the opinions about well, you should do it this way. Or you should do it that way. We're pushed too far down in the technology stack, like there were opinions baked in to the very core. And so if you want to innovate, and if you want to do something differently, now becomes very, very hard, because you have to unwind what's there or bypass around? Or do you know, do some sort of very strange machinations to get away from the intentions that existed at the very at the time this system was created, whether that was a Guidewire system or our customers with their legacy systems at the time, so that to answer your question, I think we've had a lot success with proof of concepts at Socotra are basically saying that not six months, 30 days, 60 days, let's try, let's try to do a little something and the way we structured, I don't want to toot our own horn too much. But when you are truly cloud first, and when you are truly API centric, and you don't have entanglement, then it's pretty simple to do some basic things set up the system that takes like five minutes, because it's instant on. And then with the rest API, sample integrations are very, very simple. So you're not going to, you know, you're not going to go to market necessarily in 60 days. But you can prove that, okay, there's something there, right, that this notion I have of what it means to innovate or transform, I can actually realize with this simple experiment, and then take it from there.

Greg Irwin 35:56

And I think at the end of that, let's say I do that test, I want to run one product, one state, one cohort, and I can stand it up quickly. And maybe I launch it in a matter of months. Yeah, let's say it's successful. Yeah, you have a problem, right? Have I just, you know, maybe I just, what does it grow a new tree? And now I have this new tree standing next to the old tree. Yeah, how I think about it? Or does that? You know, what becomes of that test?

Matt Hamilton 36:33

I think it, I think it varies, and there's going to be different approaches. And again, what one of the things that I learned early on, and one of the things I try to really avoid, is thinking that I'm omniscient, right, the idea that I'm sitting here, right, and because there's a pandemic, I'm sitting here, kind of All right, we'll be able to guess what's the right approach for in all these different cases is kind of ridiculous. But I can tell you that there are different patterns like property and casualty, you're renewing every six months every year. And so a migrate on renewal approach can work great. Not so great in life insurance, you kind of have to probably embed a lot of the data in sort of, like, you know, sort of generic representation that sits alongside unless you really do want to do like a month long effort in mapping fields and things, things like that. But, and and then along with all the different integrations, right, you're you had the old system, you're doing say account level billing, and you have to feed from the old system and the new system and get a combined statement that those sorts of things have to be thought through. But, but they tend to be tractable problems. And we've had, you know, a lot of interest in in doing just this. I think part of it is because the this psychiatry system that we've devised device so far is actually makes it fairly straightforward to do that. But the other is, I mean, what choice do you have? I mean, how long are you going to go in the old model where it's monolithic, and, and then kind of calcifying? In some ways, in a lot of cases, and I don't want to judge anybody's particular situation, right.

Lisa 38:25

I want to touch on what you're saying, though, from a digital transformation, so I'm agreeing more with what Chris said, from citizens in that, if you have a if you have a insurance platform in place, and you're looking to as the same guy, remember, he was saying, you know, to try it, try a new product, see if it's see if it works. Sorry, Gavin, that would you be willing to fail all that stuff. The actual throwing it out there in the mentality business mentality about, you know, just take a chance, see what works, see what the feedback is, I think of that as the digital doing things in a different way. But the platform is the platform that if I'm trying new products, or trying a different pricing structure, that's just it. That's just what we do. That's my opinion.

Matt Hamilton 39:24

One of the ways I look at it, and then Lisa, forgive me, I don't know if I'm exactly responding to your thought there. But one of the ways I look at it is that the platform at the very lowest levels is pretty wide. Right? There's it's a system of record. It's fairly generic data structures, you define them the way you want, you extend them the way you want, but the actual mechanics don't have strong opinions in the way I described before. And then and then so you can build on on top of that structure you can build on verticals, some of which are very experimental, like maybe you start out with only a very experimental or vertical structure. But as that grows into something that's more permanent, because we hey, we've succeeded, you can continue to build on other innovations in other verticals, all using the same platform, the same system of record. And so part of my job is to make sure that that that very lowest layer is is actually able to accommodate all these different types of scenarios.

Greg Irwin 40:36

All right, excellent. Let's, let's keep going. Thank you both. I want to invite in Arthur, board at CNA. Let's check Arthur, are you on the line with us?

Arthur 40:51

Oh, yes, sir. Can you hear me?

Greg Irwin 40:53

We got you. Yes, sir. Nice, nice to speak with you. If you have a minute, would you care to give a real quick intro to the group?

Arthur 41:03

Yeah, sure. I had an area called product services within CNAs commercial units. And we're responsible for basically making the products work and, you know, people processes and technology implications of that I'm on the business side, not, but I spend most of my time with the technologists trying to make that all all happen. And I've been involved in transformation work here. And in former lives. So I've been at this for longer than I care to admit. But yet, by it's been interesting to listen, you know, I don't manage the channel side of things here. It's more on the underwriting direct underwriting side. And a lot of our transformation has to do with things relating to underwriting decision support. And, you know, when I think of digital transformation, I think of the process of building a trusted advisor capability for my underwriters, so that they're, they're able to, you know, sort of fill in the gaps for their knowledge and the diversity of the types of risks that we face in the commercial space. Most of the stuff I'm dealing with is middle markets. And it's simply not possible for an underwriter to hold in their head, all of the nuance necessary to be successful. underwriting that book of business, they're constantly referring back to materials to, you know, ask the right questions, or do the right resource research into a risk. And we're just convinced that there's lots of ways to help them through that process that don't require them clicking on websites and going into, you know, necessarily relying on predictive analytics all the time and more AML types of approaches that are, you know, kind of being talked about now and how to best attack that in a way that would increase decision velocity for the underwriter.

Greg Irwin 43:06

You know, I'm gonna piggyback right here on your comments and Gavin's question. You want to implement AI/ML to accelerate the process. But how do you insure against bias?

Arthur 43:24

Yeah, so there's a lot of that we have to, you know, we're admitted in most of our products. So the states care about what we do pretty, they care about our decision matrices, and they want to make sure that we're living up to our filings and so on. So there's some real disclosure issues that we have to be able to satisfy and, and some of the challenges that we faced with the technology is that you know, that there's a certain black box feel to you know, some of what this is all about, but But honestly, you know, we're not asking for or looking for a straight through processing kind of model for our underwriters. So, you know, in the small business world, we think we can support that. But when it comes to sort of middle market, we think that there's kind of surgical support that call called surgical in terms of, it's really kind of targeted at certain things, go get me third party data that would validate and let the underwriter decide whether there's conflicts in the submission versus the third party data. Let me look at risk assessment. And can I push to the underwriter information that tells the current thinking, that risk in the marketplace, you know, there's, there's, there's lots of ways to sort of take away a lot of work from the underwriter using, using kind of the technology that's already there, without necessarily injecting a whole lot of that bias.

Greg Irwin 44:53

That's interesting. Basically, you're coming back to the point there are lots of different ways to end without necessarily, you know, changing the recording engine when a court process?

Arthur 45:07

Yeah, I mean, what I would say is that, you know, we certainly have API strategies and cloud strategies that we're working, and we really want to take on our billing system. And, you know, there are all sorts of touchy issues, but we work exclusively through the brokerage network in the middle market space, and, you know, we're not in a position or do I think any company is in our space to drive the market in a certain direction, the producers really still have to figure out their engagement model with the, with the insurance or with the insurers, you know, the in each of them seems have their own strategies. So just like, they're trying to manage the relationships with, you know, 30 or 40, different markets, we're trying to manage the relationships with 30 or 40, different producers, you know, major producers who all have a different digital strategy of their own. And so it does present some unique challenges that, you know, there's some folks that are still in the, you know, the cord, you know, kind of world, there are folks that are building their own interfaces, they want our API's, but they all want them in different sequence, right? They Some want the business submission, some on renewals, some on endorsements, which ones do we build? First, we can't build them all. And it depends on which one you're talking to, you know, as far as which one is the most important that day. So it does present a lot of those types of prioritization challenges for us to try to establish networks with all these different, different different producers.

Greg Irwin 46:43

I mean, yeah, you're I hear it loud and clear. you're obligated to the the interfaces and workflows that you're getting from your partners. which locks it in and makes the transformation of the core various.

Arthur 47:04

Yeah, we've been waiting for many years, just like they've been waiting for us to figure this all out. And it still seems to be up for debate. And in terms of chicken or egg of who's gonna be the one that's going to actually come up with the right solution, it feels like it will always be a mixture of solutions. So it does present, you know, some challenges, I mean, API strategies really do hold the promise of, of solving for a good part of this, but honestly, you know, again, folks are in different places in their own development. You know, it's not like there's a common internet that, you know, consumer internet that folks are pretty used to using. It's not necessarily true in the in the middle market space.

Chris 47:49

Right. Yeah, if I, if I could interject one of the things that we're doing just in terms of the models, and we're just talking about this right now, I had a meeting on it last week, getting our arms around what it is that's out there in the company, all the different Power BI dashboards that are springing up all the different models that are springing up, just it springing up quickly, you know, so getting our arms around it and cataloging those things. So think about an Excel spreadsheet and just having a row for each one of them. And then in each column, asking questions about each of those models. And getting a center of excellence looking at that, you know, validating do? Do we think these are reliable models? Where is it getting the data? So so we're talking about cataloging all that through a tool, getting multiple eyes on it through a center of excellence. And this is just kind of something that came up recently, as we're talking about governance with respect to advanced analytics. That's one of the things that that we're doing. And I think that kind of goes to the question that Gavin has, if that's helpful. Yeah.

Greg Irwin 48:54

All right. Excellent. Thank you guys. I'm going to try and bring two others into the call Jerin, and then Justin, then we'll turn back to artist code and try to to wrap this up. By the way, this can go a couple ways. We can kind of limp through the the rest of the call. We've got about eight minutes to go here, you can start multitasking and thinking about your next things to do. Or we can focus in on the group that we've got here. We can think through one or two closing comments or takeaways, and make full value and I'm voting for for the latter. So let's go at it. Jerin. Hey, Jerin, are you on one news?

Jerin 49:35

Yes, I am.

Greg Irwin 49:37

Awesome. Hey, nice to meet you. Real quick. Give an intro.

Jerin 49:41

Yeah, so I manage the digital delivery for MetLife Japan, mainly working on the bank assurance piece for Japan. The entire delivery for it to me.

Greg Irwin 49:55

I'm sorry, I didn't I didn't didn't hear that right. You're what What lines? What's the product?

Jerin 50:08

medical? America? Yeah, except medical. Right. So it is a, I get currently deal with the application development and delivery, or MetLife, Japan, working with them. And then at some point some portion of the Korea Development Team.

Greg Irwin 50:29

Thanks. Alright, Jerin what's what's one digital transformation initiative that you're able to share, maybe maybe give it a little broad, but something something, you know, over kind of a year or two kind of perspective that that you're looking to tackle.

Jerin 50:50

Yeah, to see, just take the Japan part in it. So if you wouldn't believe it, but then Japan is permitted for MetLife. Japan is the third largest country in terms of revenue. But up until a few years ago, the baby sell insurance was all paper based means that agents had to go in to the customer, have them fill out a form, and then take it back, create the code, go back to the customer, and then go decide if they have to go for the application or not. Now what I was tasked to do was to go in and then plan and strategize how we can change that back because again, MetLife was pushing for digital transformation. Now,

Greg Irwin 51:39

Jerin, do you sell through brokers in Japan as well, or is this Met Life? sales professionals?

Jerin 51:48

Yeah, so MetLife, it's all retail, it means that it it's all agents selling it directly to customers, there is no group where it's to the employers. Now, but then there are two kinds of sales there. One is through the banks, which is the biggest source of revenue for MetLife, where, where a customer walks into a bank, and then the bank agent sells and sells the insurance. Now the challenge there is you see these bank agents, they are tasked with selling insurance policies from multiple insurance companies. So they would they prefer to sell insurances to customers, or policies to customers, where it's where the task is easier. Right? So for the challenge for MetLife, was that because it was paper based. And then when other companies overtook MetLife, in the digital space, agents preferred to sell other insurance policies, then MetLife. So a few years back, MetLife decided now this is not the right way to go. So we have to make it digital. And so MetLife had a lot of catching up to do when it came to Japan. And then a couple of years back in 2019, was when we actually released our application for regional banks, regional banks being like the, the credit unions here. And then last year was when MetLife when we delivered the application for one of the biggest bank in which is called the mega bank, which is like the Bank of America. Right? It was a miserable back.

Greg Irwin 53:20

Interesting guy is this, I'm gonna pick up here on the comments. Is it an API based platform? How easy is it for you to develop and roll out the system?

Jerin 53:31

It is API based platform. Right? So I mean, when we do it, we go to a bank, right? We use the latest technologies, like all the the application itself is hosted online. I mean, on cloud Azir. We use Docker, and then now we are pushing to move to Cuban it is. And then I mean, no SQL databases. I mean, there are still legacy on on premise data systems that we connect to, when they are it's all API based.

Greg Irwin 53:59

Alright, excellent. Jerin congratulations. That's a huge talk about transformation. It's like going from from A to Z. That thanks so much for sharing. We're gonna go quickly here, Justin. Let's see if we can get you in. Any and all this ad ad for you? Is there any incremental story or question you've got from the group?

Justin 54:23

Well, I appreciate the conversation. We are in the middle of going together, right? So we're in one phase of gonna claim center and then policy centers are next phase. So listen, and all this sounds very familiar. We're also our agent focus, right? So we don't want to stay away from that. But we do want to automate all these processes, especially when it comes to claimed 40. Some integrations, different vendors, you know, things that are manually done now that we could make better and that's what we're trying to do in this first phase. And then I would say two things Arthur's point out one thing we're doing Policy Center is some of the complexity models. Ready here, right now, when our legacy system underwriters look at every policy, whether they're genuine routers or assistance, they look at every policy we say. And what we've been incorporating is a scoring rating system, right. So, you know, this customer looks pretty good, or on the high scale, let's just pass it through. And that's a big, I wouldn't call it a breakthrough for our company, but something for the underwriters to get over, that's a big time to let go of you mean, I'm not going to get to see it. You know, we're gonna sell it. And it's gonna be there. You know, we need a lot of reports a lot of things to make them confident that these algorithms are working to get the right customers in the door. I'm curious, just

Greg Irwin 55:47

Are you deploying guidewire? cloud? Are you going? No. Are you going on prem?

Justin 55:52

Or on prem for now, or they call it self managed? So we started probably three years ago, let the conversation so I don't think I know some of these measures are on going towards the cloud. But at that point, when we made these decisions, it wasn't as strong as it is now. But that's something we're definitely keeping our eyes on.

Greg Irwin 56:13

All right. Very good. Justin, appreciate it. Hey, we're gonna go let's wrap up here with Ken and Matt. And Matt. Guys, I'm going to I'm going to ask you, for level four, one first. Part of the reason that, that these guys do with us as awareness, they're a small company, they're not, they're not guidewire. If you want to talk about the ability to deploy, you know, a cloud, a cloud based system that basically will let you get up and running on things much faster. And are any projects for you or one of your colleagues, you think it'd be interesting? Of course, that's, that's what they're doing. They want to they want to find those opportunities. So of course, we would appreciate that. With that said, Let me turn back here and can can help us help us wrap up. Any any closing comments you have here for the room?

Ken Holmes 57:09

Yeah. And listen, appreciate the opportunity meeting you while we actually don't look at ourselves as competing with Guidewire. Today. Oftentimes, companies like Jerin just said, let you know, or just mentioned The Tideway or petition, the decisions made long time ago, it's 10s of millions of dollars, it takes a long time to get going. It's very robust. Oftentimes, where if you think of psychiatrists think of us as nimble and innovative. We have customers that use us on the side test and learn is it gonna work? Oh, it is. And we got it, right. Let's go implement it in our guidewire. So no one's no one's getting rid of their spine of guidewire today, and moving over Socotra. So that's, that's where we'll be upcoming, but just want to just want to try to call that out, I'd say, if we leave with anything in this call Socotra is the you know, flexible way to help you with your digital transformation strategy, if you want to have something that you can click on to in the future, and build on top of that's what we're trying to do. So.

Matt Hamilton 58:07

And let me just add that. Ken forgot to add the word yet. Five years from now I look again, and I think oh, well, I have a different story. And in all seriousness, I think, even though we do have, I think a fairly nimble system, and we intend to keep it we're gonna fight very hard to keep it that way. We we are working very hard to extend the capabilities of the product and fit in more and more and bigger and bigger situations. So so you know, to that extent, it's an opportunity we like growing with our customers. They can start small and grow and we can grow with them. And it's very symbiotic that way.

Greg Irwin 58:51

Guys, thank you very much. Let me thank you all for taking the time and joining and sharing and it's great to see so many of you face to face, wrap it up and I look forward to to speaking more on future sessions. With that. Good to see you all. Thank you. Thank you. Thank you. Thanks, everybody.

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