During this session you will hear how the right digital offerings have:
- Transformed an insurance company into a cognitive enterprise using AI-driven intelligent workflows and big-data
- Reduced real time claim management response time with AI-solutions
- Enhanced policy holder experiences with risk-concierge and new platforms
- Optimized financial closings quarter on quarter
Mark McLaughlin: (
Thank you, Nate. Thank you all for joining us on the last session of the day. Always a challenge, right? So, what we're gonna talk about over the next half hour is digital transformation. What we are seeing across our client base now, IBM of course does business with pretty much every insurance company in the world. 99 of the top 100 last time I looked so we've got at least, some knowledge to share about what we see insurers doing in the digital transformation space. And we usually talk about big three big themes. When we talk about what insurers are doing, right. What happened here? There we go sensitive button. One of them is digital orchestration. One of them is core productivity and one of them is hybrid cloud. So given that this is the digital insurance conference, which one do you think we're gonna talk about?
Mark McLaughlin: (
Right. So we know, so digital orchestration, what do we seeing by that? What do we mean by that? We did a study, which I recommend to you, and I'll give you a link at the end of this, discussion called the risk concierge study. And it looked at the diversification of products across the insurance space and how Insurers are expanding almost the very definition of insurance and how they are partnering with insure tech. Many of whom are out here, right? To really sort of reinvent the risk value proposition, It's a great study. I recommend it. And when we did that study, it actually surprised us a little bit. We asked insurers, what roles should the industry be taking on? Do you want to be risk preventers? Do you wanna move into healthcare? Do you wanna move into risk consulting? Do you want to provide value added service and advice around risk?
Mark McLaughlin: (
Do you want to be a financial provider of investment services and looking across the world, looking at all the insurance executives we talked about, well over half, think all of these things are pretty important and they're looking to expand. But when you think about sort of the, product style, a lot of these products are smaller products. They're micro products. The idea is we will implement a small product and that'll suck some people into our relationship kind of, kind of world, and we'll start upselling and cross-selling, and building out that, portfolio. And to that point, we figured a few insurers that we had seen, were well along in that journey. What surprised us is that almost 80% of our insurance respondents said they're offering more than half of the products that we surveyed them on about.
Mark McLaughlin: (
And you can see some of the examples here. So the ecosystem is expanding whether you see it at your company or not, whether we see it at our particular client or not right across the world, they're doing a lot more of this, this product and ecosystem expansion. And the implication of that is that what do insurers need to be doing? They need to be thinking about how to expand their ecosystem. How do they participate in other industry value chains? How do they partner more effectively with Insure techs to build joint offerings? How do they make profitable investments and connections across that space? How do I turn my products from risk reaction to risk management and risk prevention? How do I become almost your partner in risk as an end insured, whether that be personal or commercial, and how does digital play into that digital is being used to make those connections it's being used to automate.
Mark McLaughlin: (
It's even being used in some cases, as a digital platform where these sorts of things are deployed at scale. And I'll tell you about couple of the clients that we've seen there. Really, when you think about how do you do this as an insurer, we believe there are some organizing principles. And the key thing is to think about how do you architect, how do you connect? How do you build your, it capabilities, your business skills, your process capabilities across the digital layer to build interactions with firms like this, your core layer to build in the automation and the expense control and the efficiency to make those systems profitable and modernized. And how do I connect to the infrastructure layer to make sure that I'm not locked into any one core that I'm not locked into any one cloud, because to truly assemble these digital capabilities, you may pull from cloud X, you may pull from cloud, Y you may pull from some of your on-prem systems.
Mark McLaughlin: (
You may have systems locked up in a 40 year old, data locked up in a 40 year old Cobal system that you need to bring to the table. All of that needs to connect together seamlessly. All of that needs to be able to be built quickly. All of that needs to be secured and monitored and managed. And so there's some architectural principles behind that. And, we can talk about more about those another time. How is this taking place at clients? We've done automation in the European market for quite some time. We have an input management platform that automates paper coming in. And, we have been able to achieve 60 to 70% automation of that process. Now that doesn't sound like that much until you think about all the paper that comes into an insurance company, right. I get a medical report that was scribbled by hand on a piece of paper, right?
Mark McLaughlin: (
I get forms that have nothing to do with any of my processes. I get checks and payment methods from all over the place, right? Getting to that level of automation with old technology was pretty good, but we are now getting to the point where we can do higher order automation, intelligent workflows. We can actually have workflows that adapt based on what the AI is seeing. And we're starting to deploy those sorts of engagements. We are seeing productivity increases above what you're seeing with this plain, sort of RPA style process automation. We are able to deploy pilots at speed and generally took some of this some of this work and is now deploying out on an international basis across, across their worldwide enterprise. We can do some things very quickly. So we have built some work with code objects around their, around insurers who are responding to catastrophes.
Mark McLaughlin: (
And obviously there's a big spike in call center demand. There's a big spike in claim adjuster demand at that time. Are there ways we can deploy AI into that, that make it much more, scalable, much more automated. And we have built a system with code objects to start handling some of that inbound traffic. After a loss event, they actually did it in the teeth of an incoming loss event. They wanted to get something done in a couple of weeks, and we were able to deploy something that materially did impact their call center wait times, and did in fact, reduce their overall call center times. And when you do that, you can save, a minute at a dollar, a minute savings in terms of time saved by not having those people on the phone, right? Those savings can rack up to be pretty substantial.
Mark McLaughlin: (
And we are seeing across the insurance space, this emergence of platforms, I mentioned input management, we've done some fairly well publicized work with firms like MetLife. We've done work where Argo and Agon in Europe, we are about to announce another one of these shortly. And the idea is let's take the traditional model of, what I'll loosely call mess for less pull in the policy administration pull in some of the manual labor behind that. And then let's apply some of these digital tools. Let's apply some of the automation, and we see clients starting to reduce their, overall maintenance and TCO costs. They are starting to automate some of the highly manual processes. They're starting to achieve what I think of as level two savings it's beyond. We've just got cheaper labor than what you've got today.
Mark McLaughlin: (
And it's starting to get to, we are making the processes themselves more efficient, so you just don't need as much labor in the first place. And you can free up that labor to go work on higher value tasks. So those are some examples of what we're seeing in the automation space, in the digital space, in the digital interaction space. But if you take those digital interactions and you use them to build connections and ecosystems with some of these firms here at dig in that creates entirely new opportunities for new business models. And to talk about that, I have a guest that's gonna come up with me and answer a few questions his name is Squire Aschinger. He is the director of product for Root Insurance. Please join me in welcoming him.
Mark McLaughlin: (
All right, so Squire, thanks for making the trip out to, join us here and Dig In. I'm sure many of our, audience are familiar with root, but tell us a little bit about root just for those of us who are not familiar.
Squire Aschinger: (
Absolutely, Root is a technology company that's really set out to rev revolutionize how people are thinking about consuming personal insurance, we are heavily focused on delivering a modern mobile based, auto solution to consumers. And our focus from a pricing perspective is really around fairness. And what drives that on our end is the use of telematic ensuring that we're appropriate segmenting risk by how people drive. we are founded in 2015, we've since grown, to just over 1200 employees and we iPod in 2020.
Mark McLaughlin: (
Okay. Thank you, so Root is one of the firms that sort of made the embedded insurance model work and is actually done some of the digital take advantage of a lot of the digital capable beliefs that we talked about earlier, for what does embedded insurance mean to, you?
Squire Aschinger: (
When we look at embedded insurance, what really excites us is it's our opportunity to really revolutionize how people think about buying insurance, I've heard this over and over again in multiple presentations today, but we believe in it as well. It's truly meeting customers where they are, but in addition to that, it's meeting them when they need, insurance the most. And it's also delivering a magical experience at those points in time. And when we combine those three things, there's really only a few ways to execute upon that. The first is ensuring that you're delivering a innovative tech stack, that's flexible and can meet their needs. Two is leveraging data to actually understand what are those key moments of truth for customers and in the last is being hyper focused on your customer and making sure that everything that you design from a technical perspective is meeting their needs and ultimately driving progress for them.
Mark McLaughlin: (
So It's fair to say you would disagree with the idea that insurance is, sold and not bought. And it's more, it sounds like it's more about being at the point of risk being there with the right offer, being there with, something that makes sense in that context.
Squire Aschinger: (
I mean, absolutely. I think when you look at how insurance, especially in the personal auto space has evolved over time, direct really has innovated over the past 20 years to be more internet led and really accessible on the, on, the web next has really been mobile. And then I think what we're gonna see here next is embedded. And we're gonna continue to see this scale out over the next 10 to 15 years with something, whatever's next I don't know yet, but I'm really focused on embedded at this point in time.
Mark McLaughlin: (
Well, and it's really interesting, you reminded me of a study that I have quoted for a long time from one of the analysts that, covers the industry about, picking up when the end insured is confronted with a new product or a new mode of purchase or a new model, if they're at least a little bit familiar with the product, or they're a little bit familiar with the channel, they're much more likely to kind of engage and you're right. You mentioned sort of the emergence of mobile, the emergence of direct. Now everybody's a little more used to that model. It opens up some new possibilities.
Squire Aschinger: (
So, yeah, absolutely.
Mark McLaughlin: (
So, you recently announced a new partnership with Carvana. That's sort of bringing that embedded, pro proposition to life. Tell us a little bit about
Squire Aschinger: (
That. Yeah, so we've actually been partners with Carvana for, well over a year at this point. And that partnership initially started off really as a lead gen partnership and over, a period of probably six to eight months prior to our most recent announcement, what we learned about Carvana their organization and their business was there's a very close alignment about how we think about our customers, how we're culturally structured as a company, and then also how we believe technology can better serve our customers. And through that learning process, conversations really evolved over time and said, can we deepen this partnership? Does it make sense for us to do something a little bit more than lead gen? And that's where this concept of embedded really started floating around. And, we wanted to be one of the first partnerships that truly delivered an embedded, fully bindable experience at the time of purchase when it comes to car purchasing.
Squire Aschinger: (
After all the lawyers got involved and what not, we delivered, this partnership and Carvana believed in it so much that they ultimately, did make a large investment in us as a part of the deal as well, and what we've been focused on here over the past, I guess, six months or so is actually delivering upon that and introducing this truly embedded experience and what that looks like right now is as a Carvana consumer, I go through, I buy my car, I schedule the delivery. And within that purchase flow, we are actually embedding our buy flow via APIs and SDKs, directly into the customer experience. So it's one seamless experience as customers are purchasing their car, which, we are super excited about this partnership, cuz we are there at the point of sale. We're transforming this experience through a fully integrated, vertically integrated experience. And we've seen a ton of success so far and we're gonna continue to iterate upon it and we're excited where it's going.
Mark McLaughlin: (
So just to be clear, it is root insurance being offered within Carvana's value chain, not Carvana white label insurance,
Squire Aschinger: (
Exactly the way that we're positioning it is really leveraging the trust that the customer's already had in the Carvana brand name, as they go through and purchase their vehicle. And we're introducing this in conjunction with Carvana and what it looks like to a consumer is it's, Carvana insurance powered by route.
Mark McLaughlin: (
Got it. Okay. So, somewhat similar to the travel embedded insurance that shows up when we all purchased an airline tickets to come down here. Right. And pretty much all the major airlines have done some sort of in embed where I know American, pesters me every single time. I now act to actually affirmatively say, I do not want the insurance where before it was just kind of offered along the side. So it's been gradually getting more and more integrated it seems like.
Squire Aschinger: (
Yeah. And I hope, we delivered an experience a little bit better than that.
Mark McLaughlin: (
Well, how, how in, how much has the process changed when you, when you went through this journey with Carvana and saying, okay, we want to take root insurance and embed that in. Were there aspects of, Carvana's data or Carvana's buying process where that offered the opportunity to maybe shortcut some things or change some things about the insurance purchase process?
Squire Aschinger: (
Yeah. I think one of the biggest keys to success for us when we think about embedded and we think about our next partners and we think about our current partners is how do we leverage the synergies from a data perspective to really provide a unique experience. So when we look at the Carvana experience, particularly for you to buy a car, you're providing a lot of information, and you're providing a lot of information that is actually needed to consume an insurance policy. So what we're able to do is rather than collect that at multiple different points in time it's collected during the car purchase. And, after the proper consents are provided and what not, we're actually able to source that data via the APIs that we've developed and use that as, pre-filled information into our quoting logic.
Mark McLaughlin: (
Well, and that's a great point because people are used to, when I buy a car, I am going to have to provide some level of information. When I buy insurance, I'm going to have to provide some level of information. It probably just seems a lot easier when they say, Hey, we can give you insurance right now. Right. I mean is that part of the value process, I guess?
Squire Aschinger: (
Absolutely. When we look at it, it's truly, how do we deliver something that's seamless? How do we make it? So it's as effortless as possible for the consumers and how do we make it just feel like it's generally a part of the purchase of the vehicle itself or whatever partner we're ultimately embedding with.
Mark McLaughlin: (
Okay, and how, does root show up sort of later on in the process I've bought my car, I've got my insurance. Do they have to go back to Carvana or is that, is that relationship separated out? How does, how is that structured?
Squire Aschinger: (
Yeah, so one, we continue to iterate with Carvana, on that experience, one of the things that's really helped us move quickly in the embedded space is we've integrated upon our product. And we've looked at how we develop our embedded offerings as a, not to use the word iterate again, but in a very iterative fashion. So, what we initially started off with was what looked like just a general ad placement within their purchase flow. And if a customer were to click on that, what would ultimately happen is we would source the data that's needed to prefill the quote flow. And then we'd send 'em over into a white labeled experience. That is those ultimately hosted by us as we started to learn from that understood our market, product fit and got a ton of feedback from users. That's when we started moving closer and closer into the fully embedded experience that we're currently, delivering now.
Mark McLaughlin: (
Okay, so as you think about sort of the next Carvana or the next embed opportunity, right? You're gonna go to, another provider, maybe similar maybe in a slightly different value chain, a slightly different industry. What, what sort of changes about the root based experience or the root based product and what ends up getting changed as you go from embed to embed to embed?
Squire Aschinger: (
Yeah. So at the end of the day, our APIs and our SDKs, ultimately our goal is, as I said earlier, we wanna make them as flexible as possible. When we think about scaling out our embedded offering, the last thing that we want to do is go to consumer or excuse me, retailer X, or OEM Y or financial institution C and have to custom develop everything. One it's expensive for us to do that. And then two it's expensive also for, our potential partner to do that. So we're really focused on making it lightweight for us to introduce an onboard new partners, both on our end and their end. Now there's different value props that various embedded partners can potentially bring. And we're constantly looking at those, value props and how can we ultimately leverage those to provide a better customer experience? What's really interesting about the Carvan experience is when you buy a car, it's a high intent point in time of someone wanting to buy or needing new insurance.
Squire Aschinger: (
So, we didn't need to necessarily do a ton of customization on how and when we're presenting the product, because it was fairly straightforward. Now, when we embed with partners where you have less intent, users we are constantly looking at how can we integrate and leverage our APIs to source data and provide data to our partners to say, Hey, these types of these part types of users at this specific points in time are most likely to ultimately be interested in our product. So let's position it at that point in time and through our APIs, we're able to actually generate that information and, connect with our partners.
Mark McLaughlin: (
Okay, would you say, maybe I'm thinking about this the wrong way, right. But I I've had retailers and some other entities kind of come to me in my position over the years and say, we'd love to get some of that insurance data. And I always think of insurance insurance as a very data intensive industry. We know a lot about our customers, has there been relative sort of data parody, I guess, between you all and Carvana, or is Kiva seeing some data out of the, process that they might not see otherwise obviously, with full disclosure, right? Yeah. Not, we're not trying to do anything, under the table, but I mean is that an opportunity for embed where insurers can bring more data to the table instead of instead of consuming?
Squire Aschinger: (
Absolutely. I think one, we're very sensitive with data. I wanna make that very clear, two, we're not gonna be passing a lot of the more granular data back to any of our partners that it's just not necessary. It's not the best way for us to serve our users. And it's not helpful ultimately to a lot of our partners, that being said, what we can do is we can, in more of an aggregate form, we can help inform and educate our customers and ultimately, or excuse me, our partners, and help them drive the right experiences in conjunction with us. So there is an element of us educating our partners on how to better ultimately leverage this embedded offering that we're giving them. And then in conjunction, they're also helping us and giving them us more broad, generic information about their users. Okay. And, at the end of the day, a partnership is best optimized when we're both, have aligned goals and with aligned goals, we're sharing the right information.
Mark McLaughlin: (
So it's not, big brother tracking people through these multiple processes, but there is a ton of insight to be gained by looking collectively at the data and figuring out how are there more opportunities for both of us to do a better job of serving the end, the end buyer?
Squire Aschinger: (
Yes, we're very careful to roll everything up to the right level.
Mark McLaughlin: (
So, and to be clear, we are sponsoring a breakfast tomorrow morning on how insurance can do better and our responsibilities. So we absolutely agree that we are not looking to, do anything nefarious with the data, but there are opportunities to improve our value, to that point sort of when you go to a new potential new partner in some value chain, whether it's related to Carvana's or not, what's sort of the value proposition. what is root if you're walking into the pitch room and you say, all right, well, we would like to embed in your product and we, this is some of the advantages. What are some of the things you might wanna bring up?
Squire Aschinger: (
Yeah, I mean, first and foremost is user experience. The last thing that, any retailer OEM, whoever it might be wants to do is tarnish their brand name by partnering with a company that doesn't well represent their users nor does align with the needs of their users. So we are very clear on the, on how we think about our user experience, how we think about our flows and what not. So that's, number one, most important thing that we talk about the second is east implementation. I'm talking to quite a few partners on a fairly regular basis or potential partners, and we hear this over and over again, where they are talking to potentially another insurer and just due to time of implementation, and time to go live, it doesn't work for them. So that kind of ties back to how we think about our tech stack and how we think about our embedded product and the APIs and SEKs and the white label options that we offer. our goal is to create a product that can be embedded extremely easily, quickly, and isn't expensive ultimately for the customer or our partners.
Mark McLaughlin: (
Well, and that leads me to maybe my last question. I when you are thinking about, you mentioned ease of implementation, we think, and we hear from our insurance customers, that's hugely important, right. Speed to market. And I had someone last night talking about speed to market and they started out with 18 and I was expecting them to say weeks. And then they said months, and I said, okay, well, we got room to progress, right. But when you think about how you provide that ease of implementation, recognizing that your stack and your embed partner stack might be two different stacks, might be two different clouds, might have multiple systems all over the place, any thoughts or tricks on how to make that ease of implementation a reality?
Squire Aschinger: (
So, one I mean, the way that we think about our APIs is we try to make them absolutely agnostic to any cloud solutions, all that fun stuff same thing with SEKs. One thing to remember also is it's not only the tech stack that you're dealing with, but you're also dealing with, the competency of their potential engineering teams or, their capacity to take on additional work. So that's why, when we think about our, our offerings, it goes back to us building ultimately a suite where we might have some partners that are fully interested in a fully customized API solution that we can kind of hand off to them, or they might be a little bit more in the road where they want something more like an SEK, or you might have, partners that are interested in just that white labeled experience that we started off with Carvana, but by us developing this kind of suite of offerings, it's allowed us to kind of meet the needs for a wide group of competencies and capacities.
Mark McLaughlin: (
So you sort of get the, the advantages of some pre-built and pre-designed and flexible infrastructure and APIs and SEKs, but you have enough room to sort of do some of the tailoring of the product, to that particular embed partner, where they can have an experience that they feel like is unique and differentiated.
Squire Aschinger: (
Absolutely. We have our core set. And then when we look at the potential ways to optimize the partnership, we will do, custom APIs that are pretty simple, which is just, we might collect some data fields that we don't collect with our core APIs, but we do stick to our core set to initiate.
Mark McLaughlin: (
Okay. All right. Feels like we covered a lot of ground in a short period of time. Anything else, we wanna hit or are we good? I think we're good on my end. Okay, awesome. So, Hey I wanna thank you all for spending time with us, and I quoted a few statistics at the start of this, and I've got a lot more behind them, they're at our IBM Institute for business value, and you can download a lot of those studies to reading 'em yourself and, risk concierge. Again, I highly recommend, and that's not just cuz I wrote it, but maybe it is a little, It really is. There's some really good work that we've done with very big groups of international, insurers consumers of insurance, venture capitalists, their studies kind of cover gamut. It's worth your time. So you can, uh, very short, very short, uh, URL. You can write down there and, uh, take a look. So thank you again for your time. We appreciate it. And uh, on to the next speaker.