Track 7: Achieving data transparency

Insurance customers increasingly understand that their personal data has value, and are only willing to open more of it up to insurers for commensurate return on that value. Insurers must be transparent about their use of and security around customer data in order to get buy-in. This panel will discuss how to achieve that trust. 

Key Takeaways:

• Customized offers and compelling discounts • Real-time dynamic pricing based on the presence of risk, rather

than on fixed contract terms

• Access to digital concierge and life

style services via insurer-led

ecosystems

• Protection management instead of policies, with a portfolio of

coverages that change based on life events

Transcript :

Matt Donofrio (00:10):

All right. Test one, two. Awesome. Alright. Hey everybody. So we're here to talk about data transparency, so we'll roll quickly into some intros. Cade, you want to start us off?

Cade Cherry (00:21):

Good afternoon everyday everybody. My name's Cade Cherry. I work for Pacific Life. I'm responsible for digital distribution and partnerships.

Michael Maunder (00:30):

My name is Michael Maunder and I actually work at Munich, based in Toronto, but with a North American mandate. So I'm really happy to be here to talk about what we do and what we're focused on achieving. Data transparency is very high on our list, so looking forward to diving into this topic.

Matt Donofrio (00:46):

Awesome. And then my name's Matt Donofrio, head of partnerships for a seed stage in InsureTech called Marble, like a digital wallet super app for all things insurance. Trying to bring that kind of Fintech model over to insurance for the first time. So data sits at the center of all of that and we've got some great partners in folks like Munich, folks like PacLife, and in doing so, looking forward to diving in if you guys here. But Mike, you want to kick us off and summarize a couple things we're going to be talking about today.

Michael Maunder (01:12):

Going to tee things up a little bit. So achieving data to transparency. Why is that important? What does that even mean? You've heard this a million times, you've heard it in the keynote, you've heard it in all of the sessions today. You've heard it probably in your day-to-day data is the foundation of the insurance industry and that goes for every single product. Travel insurance, where are you traveling to home and auto? What kind of car do you have? Where do you live, life and health? Do you smoke? What do you do on the weekends? What kind of family history do you have? So data, using these data points for risk assessment helps us get the right product at the right price to the consumers. It's been the case since the first insurance policies were sold and underwritten, going back 16 hundreds, you're the first underwriters in coffee shops in London.

(02:09)

They're looking at cargo ships, they're seeing what's in that ship and is it going to make it across the Atlantic. So they had two data points. Imagine they had a cell phone with weather apps, with apple air tags where they could actually use that data to assess the risk of that shipment. Obviously talking to an underwriter in the 16 hundreds, I don't think they would know what an iPhone is, but we are gathering data on a daily basis through everything that we do. We are generating data and the insurance industry has a unique opportunity to start using data in a lot of creative ways. Quick show of hands, who wants to start paying for Google Maps? Apple Maps. Maybe you use Apple Maps. No one's raising their hands. No one wants to pay for this stuff. In reality, we do pay for this, we pay with our data and in return we get something of value.

(03:03)

We get directions to where we want to go. We get traffic alerts, we get shopping recommendations whether we need them or not. So in exchange for our data, Google is giving us a free service, which is really cool. That's the good side of data. But we also know that there are some companies that have used our data in ways that we are not super excited about. There have been some scandals with Facebook. I won't go into the details, but what happens when you hear Facebook's using your data in a funny way, you delete your account. Does that really hurt Facebook At the end of the day, not really. They make money a million different ways, but imagine an insurance company uses data in a way that is not perceived very well by the consumer. They're going to cancel their insurance policy and they're never coming back.

(03:51)

So we lose that customer. We have an opportunity, so new in the data space for the insurance industry where we can actually put data transparency at the front of the conversation, get consumers comfortable with how we're using data, the benefits of us getting more access to data, better pricing that's obvious, but also building better products for the future, whether that's life and health, whether that's PNC, whatever. So if there's any takeaway at the end of today, we want to start putting data transparency at the front of the conversation. Let's be proactive about it. Let's make sure that when you're meeting with your product teams, your senior leadership, that you are focusing on data transparency. So we're going to talk about the importance of that for the industry and give you a couple of talking points, a couple of examples of where we fit from an InsureTech, a carrier, and a reinsurance perspective.

Matt Donofrio (04:49):

Awesome. Yes. So I think Mike teed it up well, it's, we've got some diverse perspectives on the stage today. I think from the distribution perspective, I'll start out right, InsureTech distribution perspective. We've heard a couple great examples in the industry where we've had some great implementations of this transparency use of the data. John Hancock with Vitality, we all know that example. It's been fantastically successful. Of course, we're always going to be working out the kinks and figuring that stuff out. Credit Karma is doing a cool job with what they're calling Karma Drive to help insurance companies target a little bit of that cream of the crop type risk with drivers through their platform. And to shift it a little bit to what we're doing at Marble, we're really trying to bring that sort of model, again, that FinTech type. Let's get to know the customer first and sell to them later.

(05:42)

We're trying to bring that to the forefront in insurance. And we're kind of trying to do that from two different ways. You have the customer view and then you have the carrier view, and then you have the platform sitting in the middle aggregating the data and then saying, okay, what can we do with this? So quite literally, we are, to Mike's point of how are we going to drive value back to these customers? We've gone ahead and created the first rewards program for insurance. So physically compensating users for sharing that data with us. And then what are we going to do with it? We're centralizing it, validating it, putting into a central platform. And then on the other side, we're going to go to these carriers and say, listen, we've got a place for you to target the type of customers you want, the risk that you want in a central place.

(06:30)

And I think that's becoming more and more important in this day and age of rate shopping, customers churning on every single rate cycle, making sure they're getting the lowest rate. So that's something we're really focused on today. Loyalty is obviously a big piece. The more transparent we can be with data, the more that we can understand about a customer, the more we can tell when are they likely to churn and how can we potentially keep them from churning, right? Sharing those insights back with carriers and distributors alike, of course, underwriting, what can we do to allow customers, allow carriers to target those specific customers? Maybe a specific geography, a type of house. I think there's ways that we can mitigate for what we're seeing happening in California right now with State Farm, for example, pulling out of the state. What if we have a world where instead we can allow carriers to not have to spend so much upfront to get that data to understand everything about that home, which gets expensive, everything about that car, spend the money on an MVR and instead understand a little bit more about how they could start to target that risk ahead of time.

(07:39)

But I am interested to toss it over to Cade here from the carrier perspective. I think there's a lot of what you guys are starting to look at to work on in more of that digital space. A carrier like PacLife, what are you guys doing in digital and why are you spending the time to do it.

Cade Cherry (07:56):

Yeah, insurance companies have lots of data and we've probably got some of the most valuable data when you think about the kind of data the life insurance company has. And so from a strategic perspective, we guard that. Just nobody touches it. It's the policy holders data. We've got lots of standards around that stuff as you would expect. And we never share it because as Michael pointed out, if you have a breach there, you probably certainly lose the customer. You might even lose the advisor who brought you all that business. And it just doesn't align with our values to share any of that data with anybody for anything on the digital side, where we're really focused as a carrier, and I think this is the right place, is just how do we get more electronic with the data that we have? And so one of the platforms I'm responsible for is a digital term solution.

(08:47)

And we work with Marble and we try to share data so we don't have to re-key things. The customer doesn't have to re-key things. I mean that's a small thing, but that's where data, where we're really focused is the exchange of data and how do you improve that customer experience because it doesn't do any good for the customer to enter all their information in Marble and then to come to our platform and have to enter information again. And I think that's something all of us struggle with is these disjointed digital experiences that have been concocted between InsureTechs and carriers and maybe even reinsurers. And I think over the next few years you're going to see those come together and see more integrated data sharing between all of us to make the customer experience better.

Matt Donofrio (09:31):

Mike, what about from the reinsurer's perspective?

Michael Maunder (09:34):

Well, carriers will come to us and say, we want to build cool products, can you help us? Data sounds like a fun place to start. Let's start using data, but we're not going to give you our data. So go find some other data sources. And that's fair. Part of my role is to figure out the InsureTechs, the various data sources in the ecosystem, how do we partner with these types of companies to get access to new types of data to improve our risk assessment and then connect that to the carriers dataset. We're looking at different tools like anonymization, OCR technology to digitize data. We're looking at all that type of stuff, bring that to the carrier, bring those services to the carrier so that we can align the InsureTechs and the vendors, the carrier and the policy holders, and then the reinsurer on the backend who we do hold the bag of risk at the end of the day. But we're also trying to add value to our carriers and we're really excited for the InsureTech partnerships and to bring basically the future of insurance to the industry into the consumer at the end of the day. So a lot of validating of data sources, a lot of resources, a lot of brainstorming sessions that we go through. At the end of the day, we want to get access to data, build better products and ultimately really improve the consumer experience.

Matt Donofrio (10:58):

Great. So I think we're talking high level. Here's the importance of it. We all know what can be built with it, but getting down to brass tax a little bit more, it's been tough and insurance is five, 10 years behind banking and a lot of this stuff and there's a long way to go. Maybe let's talk about some of those hurdles, some of the gaps that we've seen. Maybe we'll start with you on this one. You have a unique perspective between US and Canada comparing two markets, how they approach things. Regulation is different. Maybe let's dive into that a little bit.

Michael Maunder (11:30):

So on one hand I have the carrier saying, let's use data, let's build really cool products. And on the other hand, I have lawyers that say, don't do that. So that's a fun balance. It's a balance between let's get creative and let's use the existing infrastructure to build new products, but let's have a forward lens and let's try and get creative with the lawyers to make sure that obviously we're operating with the bounds that we're supposed to be. If I ask you for your data, we can only use it for specific purposes. Let's expand that a little bit. Let's throw some r and d into the wording when you're signing up for an application, let's sign up. Let's add a few bells and whistles to the consent language to really broaden the ability for us to use data now. And I have a foot in Canada and a foot in the US and for a long time the US you could buy data sets, you could do whatever you wanted with data, you could build really cool analytics tools.

(12:29)

And I think that's starting to change a little bit. Different states that are looking at getting a little bit more strict with how data's being used. Consumer consent comes first. So if I give you my data, I'm expecting to get something in return for it, usually as an insurance policy. I'm not expecting you to follow me for the rest of my life and send me targeted ads unless that's been communicated to me very clearly. So working on that communication in Canada, it's been the opposite. Don't do anything with data. Don't even say the word data or you're in big trouble. And now we're starting to try to expand what we can do with data. Again, it's at the front end, speaking with the advisors and the consumers, making sure that they know what we're doing, what we want to do. Today, it's pricing, but tomorrow it's what kind of really cool products can we build?

(13:20)

What kind of bells and whistles can we add to these products to really add value? So that I made the Google Maps analogy, you want to get from point A to point B, but it also helps between those points. I'm getting, Hey, that's a cool restaurant, that's a great coffee shop for insurance, for life insurance specifically, I want an insurance policy in case something bad happens. But along the way, tell me about my health. What can I do to improve my health? If you live longer, that's obviously going to benefit the insurance companies, but it's also a social good as well. So it's not that it, it's nice to stand up on that. So a few hurdles that we're working through lots of time with lawyers, which is a whole different ball game that we won't get into. But I think again, we have that opportunity to be at the forefront of let's advocate for data transparency. How are we going to use it? What are the benefits? And really put that in front of the consumer to build really cool products in the future.

Matt Donofrio (14:19):

And I think one thing we've talked a lot about is the more that we can understand the consumer, the better we can build journeys for them and take them along in these relevant customized experiences. Cade, I think that's something you probably have a lot of thoughts on with what you're working on at Pack Life. I know we've, we've certainly had some of those discussions. What are some of the challenges that you've seen as you've tried to bring these things to market?

Cade Cherry (14:41):

One of the things I touched on earlier, we have lots of data and the people I work for, they're extremely busy people and they just know we have lots of data and it's risky and they're not going to invest the time in understanding any nuances or anything cool that you want to do with it because to them it just screams, it just blinks red. And so what I try to do is try to get ahead of that and make sure I've answered that up front and work with my peers and risk management or compliance to get that on the table early and to get those allies inside early because it's pretty easy for somebody who's the flick of the risk say they're not going to do it because they don't like the data security and they might not even understand what it means. And so for those of you out there in cares, build your alliances early.

(15:28)

Specific to what Matt mentioned, the platform that we offer, again, it's digital term insurance. You can increase the face amount of the coverage without going through underwriting again based on life events. And so what our goal is start people small as good things happen in life, they get married, they buy a house, they have children, you can increase your life life insurance without any underwriting. And working with marbles really provides a really cool opportunity to maybe do that a little more proactively. In the old world, we'd have to wait for the person to be like, yeah, I just had a kid, I should probably increase my life insurance. Let me write my insurance company or find their form or call my agent. Whereas now we can maybe know that ahead of time based on the other data that Marvel has and proactively reach out to them and says, 'Hey, remember you increase your face amount, click on a button, increase your policy,' and we're good. And I think that's where the industry needs to go a lot of, we're always waiting for the consumer to reach out to us and tell us what's going on in their lives, but there's places where we can gently stay involved and make their life easier and in a way that I think we all feel good about.

Matt Donofrio (16:37):

Awesome now. And I'll sort of draw that back from the platform angle that the InsureTech angle, some of what we're doing around how do we actually get that data into the platform. And I think if we look at it from the two perspectives, we've got the first party data, which is crucial to us. If we can get a customer to actually tell us what's going on in their life, that's huge. And of course we've got the third party data. So we've approached this from two angles that I think we're starting to bring to the industry as something a little bit new. So on one side we've got this digital wallet and that's how we nudge into the customer relationship. That's our hook we'll say. So we'll give you a couple rewards points or what have you in addition to the utility of using this digital wallet, centralizing your policies.

(17:24)

And what's enabled us to do that is some great technology advancement going on in the industry, what all calls plaid for insurance. So we're all familiar with logging into a bank account via our favorite FinTech app over the past couple years that has started to proliferate into insurance. So we've got great folks out there like Canopy Connect, Trellis, FIs, if you've heard the names. They allow you to log right into your insurance account and pull all that data through deck pages, ID cards. What you, so we're piggybacking building the customer layer on top of that. So you'll come into marble, we'll give you 500 marbles for adding your home insurance policy, then your auto, your life, so on. And then that'll build a great picture for us around what you have today. And then let's say fast forward, what do we do with them for the next year if we're not selling them an insurance policy or doing something else, we'll give them some more rewards for telling us about a life event, sharing some more first party data.

(18:17)

And that allows us to really build that 360 degree view of the customer because you can get a lot of data through the deck pages, through the policies, and then you can ask them a lot more about what's going on in their life. Then we'll take that through and we can share that with the carriers. We can understand how can we better service this client? Can we give 'em a jewelry insurance policy on top of their homeowner's coverage? Because a lot of the embedded coverage that you get through a homeowner's policy might not be sufficient. Can we put an umbrella on top of that? Can we sell a life insurance policy to cover the balance of the mortgage on their house, which we're able to get through their home insurance policy. So there's all these great insights that we can glean from a real, call it a 32nd interaction with the customer, acquiring that deck page and then maybe a couple additional data points thereafter.

(19:03)

But an interesting approach I think we're taking from the tech perspective, we'll say to address that hurdle of, okay, how do we actually get access to this data? And if you think about it, it's pretty cheap. At the end of the day, if we're paying maybe five to $10 in rewards to acquire this customer, that's pretty efficient. Versus we've got some customer acquisition costs and life insurance around what, 300, 400, $500 K, right? Yeah. And then we'll switch into another hurdle that we get into is the regulation piece, which Mike touched on a little bit too. And I think that's somewhere where we can all come together as an industry and say, how can we start to structure these journeys, structure these products to help people live healthier lives, protect their homes better? And I think there's a couple great things happening right now, right?

(19:53)

Rebate law is, it's a tough one for us to navigate, especially as we're trying to share back rewards or value to folks. We obviously want to stay compliant and make sure we're sharing back that value in the right ways. But there's a couple cool things going on around the NAIC passing some model laws around specific carve outs for life and health incentivization or giving someone a wearable similar to the John Hancock program or giving someone a security system embedded into a home insurance policy. So it's starting to come along and I think the industry's getting to a better place, but we could see continued adoption of that. I think three or four states have adopted at this point, and hopefully we see that coming along a little bit more. But now I think let's switch back to, okay, some of the hurdles we see how we're addressing them. Let's go over to what's the goal here? Let's stitch it all. Do we? I think as the three main participants in the industry and our peers come together to build towards that ultimate vision of true data transparency. Michael, I'll start with you there. What, first of all, what is the goal? And then how can we get there?

Michael Maunder (21:05):

The goal is we get in a room, we build a product that every single person in North America wants to buy. That's the goal. Are we going to do that tomorrow? Probably not. But step one, let's make sure that we are putting that data conversation at the beginning of the product build and the regulations are important. We need to advocate for the industry a little bit using, aligning the InsureTechs and the data sources and the really cool products that people want that have nothing to do with insurance. And then selling insurance as an additional benefit or as the primary vessel into the consumer life would be great. But I want the three of us to get in a room and make sure that we are using data properly, targeting the consumer, offering them a product that they need, identifying those magic moments that you were referring to, making sure everyone's adequately covered and actually wants to buy insurance instead of having to sit down with someone and spend 30 minutes going through very invasive questions and then wondering when they're going to get their policy down the road. It's not a great system right now. So imagine buying insurance in 30 seconds instead of 30 days, 60 days, et cetera. So that's the ultimate goal. What about you, Cade?

Cade Cherry (22:34):

Yeah, I mean, I would agree. It's partnership. It's aligning the interest between distribution, the carriers, reinsurers, the regulators. I mean, we all want the same thing. I mean, life insurance is a worthy cause. It's something I feel proud to be associated with, but there's a lot of things that make it hard to make it cool. There's a lot of things that get in our way of doing that, and it's, I've been in this industry 20 years and the last three or four years, things have really moved. And I think if we can keep that going up in terms of dialogue, even the tenor conversation, even just coming to events like this and saying all the talent that are interested in insurance, whereas 10 years ago that wasn't the case. And that's all helping us move forward to build these products that Michael talks about, that actually the people understand and they want to own, and that it doesn't require a detailed or lengthy sales process. And people understand the benefits of the product they're buying, and it's easy and we can deliver it in an experience that's consistent with how they buy everything else. And I think we'll get there. Yeah, we're a lot closer to it than we were.

Matt Donofrio (23:41):

Yeah, no, I completely agree. I think the more that we can start to use this data and build experiences and products around it, I think the less important price becomes as the exclusive factor that people shop for insurance on. I think that's important. Obviously that's always going to be a factor, but the more we can integrate into the things that they're touching in their daily lives, the Apple watches, the wearables, the cars, right? Through telematics programs, geospatial data, all that sort of stuff to make it easy to not only help them buy insurance, but then once they buy it, right, better service, that policy decrease risk for the carriers. Obviously the reinsurers care about that. And ultimately, I think K, you summed it up well is align those incentives and I think data is probably the best way for us to do that. And yeah, I think that's about it. We've got about five minutes left or four minutes left. If anybody has questions in the audience, it means we covered everything.

Michael Maunder (24:48):

One step closer to wind down.

Matt Donofrio (24:50):

Over here in the front.

Audience 1 (24:59):

Yeah, I was just curious, what resources would you recommend to people who are looking at more engaged in the topic?

Michael Maunder (25:07):

Come talk to your favorite local reinsurance partner. There you go. No, no. Oh man.

Matt Donofrio (25:15):

I'll give a tactical shout out to, I think one of the best industry publications. They do a great job as ger. If you don't read Ger today, I think they put some fantastic content out there around this specific topic. They've got a repository of partnerships that are going on, especially in the data space. They've got a repository of carriers that are using APIs and building that APIs. Harold API, also a great company. They have an awesome repository of who's more API enabled, what products they're building, all those sorts of things. Anything else before we wrap up? Awesome. Cool. Well, thank you everybody for coming.

Audience 1 (26:04):

How do you measure success on this topic, right? What would you look and say, well, I did it. Is it in top mind? Is it in efficiency? Is it reduced risk? The three levers we get to pull, which one do you measure success here?

Matt Donofrio (26:23):

Yeah, I mean, I think it's going to be probably a different answer for each of us, but I'll take a stab at that.

Cade Cherry (26:28):

First, I'll give you an answer that maybe you don't expect, and I could be wrong, and if I'm wrong, please let me know. But if you can get the data, you remove the friction, and if you remove the friction, generally you remove expenses and litigation and things like that. So I mean, that's ultimately going to increased profits. And if you remove friction, your CX scores go up, which should drive top line. But I kind of review it as if you get this right, everything else kind of becomes easier and that just makes you more efficient. So I dunno if you find that provocative or if anybody disagrees with me, let me know. But that's kind of how I look at it as a reinsurer.

Michael Maunder (27:07):

I agree with that from the carrier perspective. So definitely I can't even add anything if I wanted to. Wow. So I mean, that's where we want to go.

Matt Donofrio (27:19):

But I mean, I think that from the alignment of incentives perspective, from the broker perspective, I do actually agree with that as well. I mean, if I look at what from Marble's perspective, I think if we as a company can focus on limiting the amount of time it takes from somebody to get from quote to bind, that's I think my success criteria is if I can get that down to seconds by saying, I'm going to collect all this data upfront to know the customer so that I don't have to ask them to re-input it six times into six different forms. But it takes a village because I can control that aspect of it. I can control the data, I can get the customer to where they need to be, but then Cade and Mike have to come to the table to build out the bind APIs to be able to ingest that data, get put it into the underwriting model, and actually sell that policy.

(28:09)

Of course, I can't control that. So I think that's in our carrier partnerships, we basically say, okay, we'll bring you that everything you need to get to the rate, call two or three, and then we want you to come to the table and try to give us that bindable rate. And of course, that's the pie in the sky idea. But I think that's the gold standard is saying, let's make it 30 seconds to swipe here and bind your policy, you know, could save this much money or improve your apples to apples coverage by X amount.

Michael Maunder (28:37):

I also think, just to add one last thing, is that getting more people comfortable, ticking the box that says, yes, share my data with the InsureTechs, share my data with the carrier, share my data with the reinsurance companies so that they can do cool things with the data, assess the risk better, give you a better price offer, interesting products. It's getting that message out there that we're not doing anything bad with the data. I don't think many people love the thought of buying insurance. They don't like insurance companies. It's not the most attractive product to buy, no matter what kind of insurance product you're buying. So getting them to just tick a box to be a little bit more open with sharing their data, I think that's how we start measuring it. And then the partnerships and the cool products that we build down the road will be the ultimate goal.

Cade Cherry (29:23):

I'll say one thing, there's a fellow who works for me, he's in his early thirties, and he's given up on all hopes of privacy in his life. He's just one of those people. He is just, I've just given up on privacy, and whereas a 60 year old customers probably haven't. And I think it's going to be interesting to see how that evolves over the next few years with there are generations of people who are coming into our markets that they don't really have an expectation of privacy. And there might be some of those barriers might dissolve a little bit because there's more of a consumer push, I don't want to go through underwriting. You already know everything about me. Why can't you just give me a policy.

Matt Donofrio (30:02):

Take my Apple Health Data.

Cade Cherry (30:03):

Yeah, exactly. Yeah, that's good. Yeah, you might see some generational shifts there in the next decade just because expectations have changed.

Matt Donofrio (30:11):

Awesome. Well, Cade, Mike, always pleasure speaking with you both. Thanks for the time everybody. Thank you.