digital life insurance product design · through ux research. plan increments based on product...

Digital Life Insurance

Product Design

Nkenge Blue, FSA, MAAAAugust 2, 2019

What (I Hope) You’ll Learn1) How the current state of the life insurance industry provides an opportunity for insurtech companies

2) Ways modern software development, specifically agile, drive innovation within insurtech

3) How actuaries manage to work, price, and design new products within an agile environment

Let’s Set the Scene

https://www.insurancebusinessmag.com/us/news/marine/one-in-four-insurance-agents-will-be-gone-by-2018-17943.aspx

Individual life insurance ownership is at a historical low, and the average age of an agent is 59 Years Old

Insurance is sold, not bought...

right?

1 in 4Agents will Retire in the

Next 18 Months

3-4 New Agents Needed to Replace Each

Let’s Set the SceneChanging consumer behavior continues to drive new entrants into markets across industries

https://www.imd.org/research-knowledge/articles/why-you-will-probably-live-longer-than-most-big-companies/

Shift Towards Digital and Self-Directed Buying Experiences

Average Lifespan of an S&P 500 Company

18(down from 61 in 1958)

Average Age of a Top Life Insurance Company

100

Why is it hard for new life insurers to

start?

https://www.businessinsider.com/insurtech-insurance-technology-report

What We Mean by Insurtech

Includes: Smartphone Apps, Consumer Activity Wearables, Claims Acceleration Tools, Individual Consumer Risk Development Systems, Online Policy Handling, Actuarial Innovation, and More!

Proliferation of new technology that can: drive growth, open new markets, and re-engage customers

AgileDescription:● Small, incremental builds● Iterative process focused on adaptability● Scope is variable, cost and time are fixed

Pros:● Rapidly develops working functionality● Adapts quickly as environment changes

Cons:● Highly dependent on customer interaction● Little documentation

Software Development Life Cycles (SDLC)

WaterfallDescription:● First SDLC model● Linear, sequential flow● Scope is fixed, cost and time are variable

Pros:● Simple and easy to understand● Strong documentation and control

Cons:● No working software until late in the

SDLC● Cannot accommodate changing

requirements

What is an MVP?

https://www.sportingnews.com/us/nba/news/michael-jordan-lebron-james-how-to-properly-approach-goat-debate/y9j3m6jeta331l78l9e4b0wb2

Traditional New Product DevelopmentA Waterfall Approach

BuildNeeds and

Market Forces

Final Product

ExhaustiveRequirements

Determine customer needs through advisor input and react to changing market.

Gather input from Legal, Actuarial, and IT to determine feasibility of project and necessary requirements.

Work to deliver finished, full-featured, marketready product.

0 to 3 months 3 to 6 months 6 to 12 months

DailyMeetings

6 to 12 months

Visionfor

Experience

Minimally Viable ProductUtilizing Agile

Product Backlog

Increment Backlog

Increment

2 week work block called a

“Sprint”

Work to deliver first increment of working software in 2 weeks.

Determine vision for customer and advisor experience through UX research.

Plan increments based on product backlog and priorities, which will evolve as you learn from prior increments.

Gather input from Legal, Actuarial, UX, Development, and Product to determine product backlog.

3 to 6 months 0 to 2 months

Learn. Repeat. Delivering further increments of software with enhancements

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Shivraj Singhhttps://dribbble.com/Expert-UI-Designer

Vision for Experience: Wireframes■ Log In

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Imagine we have built a tool that renders application questions. We can instantly get all applications questions on the internet, in front of our customers, in any order, with minimal configuration.

Great right?

Yes and no. Tools that render automatically also have constraints.Let’s talk about the difference between the two boxes on the right. What if your rendering tool only provides one type?

Software Automation Limits Innovation

An Actuary’s Role in Agile

How can an actuary...

1. Design2. Price3. File4. Obtain 50 state approval and,5. Implement

a new insurance product in one sprint?

An Actuary’s Role in Agile

How can an actuary...

3. File4. Obtain 50 state approval and,

a new insurance product in one sprint?

If you could do these 2, you’ve likely bought

out the regulators...

An Actuary’s Role in Agile

How can an actuary...

3. File4. Obtain 50 state approval and,

a new insurance product in one sprint?

If you could do these 2, you’ve likely bought

out the regulators...

...working in agile ishard…

Short Answer is...

Accounting Dependencies

...working in agile ishard…

Short Answer is...

DiscriminationIssues

RiskManagement

Product Filingsand Approvals

Agency Salesforce

Reserving Requirements

State Insurance Departments

Agency Salesforce

...working in agile ishard…

Short Answer is...

...but not impossible!

It’s All About Mindset and Environment Working in a true agile framework is difficult as an actuary, but working with an agile mindset is possible

The Actuary1. File EVERYTHING!

a. Helps prepare for changing environment

2. Start with MVPa. Don’t be everything for everyone

3. Data-driven, iterative approach to products

a. Fail fast (you will fail!)b. Learnc. Adapt

4. Remain flexible to consumer feedback

The Company1. Buy-in from other areas

a. IT, Legal, and Filing

2. Management’s openness to failure a. Not every product will be successful

3. Enterprise-wide ability to react quicklya. Modify products to adaptb. Scale back scopec. Pull products when necessary

Questions?