Tim Schaefer is EVP of client and digital experience for Northwestern Mutual. The former CIO of the life insurance company talked to INN about the differences between digital and traditional IT.
INN: What’s behind the shift in your role from traditional CIO to the one you’re in now?
Tim Schaefer: It’s the recognition that digital is very different than what we consider IT or tech traditionally. What I told my team is that tech represents the tools in the toolbox. What we do today with digital is start with the value equation in mind first. It’s the recognition the real goal is to elevate the client experience.
INN: How does this reflect in the changing shape of the organization?
TS: The model we’re operating in and starting to spread across the whole organization looks more like a software company. We’ve been aggressive in moving to Agile across the board, devops and continuous delivery. It’s structuring a culture and way of working that mimics what you see in tech firms.
INN: How is the emergence of the insurtech community pushing the industry at large in this direction?
TS: I think we’ve come through a period of time in the past two to three years, while we’ve seen the rapid ramp-up in the number of investment dollars that are flowing into insurtech pure-plays, we’re also at a point now the incumbents are aware of what’s going on. Lots were sitting back and watching to see what’s emerging. What we’re seeing now and where the push is is that a lot of activity around creating convenience in financial services – that simplified front-end. But for us it’s how to you move from convenience to the fundamental challenges that people have in their financial lives. How do you build confidence in this digital world?
INN: You seem to be focusing on building more of your digital experience in house than some other insurers. How do you see digital impacting Northwestern Mutual’s life insurance strategy from a macro standpoint?
TS: If you’re going to create differentiation, there are key strategic elements and platforms you need to put in place on your own. We still go out and buy some things, but we’re focused internally on engineering skill sets. We want to elevate the level of engagement that people have around their finances. Research continues to show that financial topics are things that people are reluctant to talk about with friends and family. How do you start to create safe spaces for people around the topic and get them engaged in a more step-by-step experience? Ultimately, we recognize that today people are looking for a sense of their own proficiency in handling their finances. We also see some crossover with the health technology and wearables. How does that help people, and how do you leverage that platform and delivery approach to engage in smaller ways?
INN: How does this kind of connection with the insured change the role of advisors, who have traditionally been more transactional in their approach?
TS: I do think the future points to needing to build long-term relationships. That’s where digital has a huge opportunity to stay connected, to flag things that happen in their [clients’] lives. The transactional part that has to happen, that’s where the convenience factor from new technology should play. But while it might be easy to do a basic transaction, it’s not building confidence, It’s not fitting into a bigger picture. As you move out of this transactional realm, clients have to be planning. People have a very strong sense that they are not in the place they want to be, their ability on their own to figure out that path. That requires people to reward advisors for the long-term relationship, because it has to be about the service that follows.
