3 life, annuity digital strategies from Amazon, Netflix, Uber
Over the past eight years, Sureify has partnered with life and annuity carriers and their distributors to build digital solutions that address three industry-wide technical challenges.
Access to data buried in legacy systems Large centralized systems blocking new digital projectsBuilding real-time multi-step digital experiences across a complex environment
Along the way, we noticed that these challenges were also a few of the biggest investment categories by Amazon, Netflix, and Uber. Let’s take a closer look at three proven strategies for overcoming these challenges that your organization can start to adapt today:
1. Focus on data needs versus core system replacement
You’ve decided to replace one or more of your core systems to support your future business plans. Don’t let that work delay your digital transformation progress. We see this time and time again, and it’s not necessary. The complexity of accessing data and processing transactions across legacy systems is often a key motivation behind core system replacement projects. But the truth is that a shiny new system typically isn’t enough to solve your data problems.
Legacy system issues aren’t unique to life and annuity insurers. In an Amazon Science article on creating their new inventory system, launched in 2020, Yan Xia, an Amazon inventory scientist, commented on the complexity of their environment. “We began to realize how every component in the system had multiple dependencies. For example, the buying platforms were tightly integrated with older legacy systems, we now had to factor these dependencies into our solutions.” Sound familiar?
So, Amazon focused on accessing the data they needed to produce exceptional seller and customer experiences for products supported by those legacy system environments. From 2019 to 2020, they built and deployed the Amazon Selling Partner Application Programming Interface (API) to move critical data from legacy systems into standardized data structures (edge data structures) to support innovations such as the same-day product delivery commitments they introduced over the past few years. In other words, Amazon didn’t need to replace those back-end legacy systems. Instead, they focused on what they needed to delight customers and distributors.
Takeaway: Like Amazon, focus on bringing data from core systems to the edge so that you can build world-class digital experiences for (and with) your distributors and customers. Don’t limit your progress based on core system replacement. Yes, you may still want to replace those core systems, but that shouldn’t be the end of the story. Like Amazon, with their Selling Partner API strategy, start by solving for easy data access.
2. Embrace API-first to deploy new digital solutions rapidly
Bringing data out of your core systems and transforming it for easy access is just the first step. A bigger obstacle to success comes from how life and annuity insurers think about meeting extensive lists of interrelated business needs inside large, centralized, monolithic systems. At one time, this way of thinking was considered best practice. It no longer is.
A far more effective approach is to architect systems as a collection of small reusable components that can be combined to compose new digital solutions. The industry term for this is API first. Over a decade ago, Netflix realized API-first would be a key factor in managing their highly complex business. See if any of these features of their business environment sound familiar:
Netflix sells its products to people with diverse needs and tastesTheir products typically require complex licensing agreements with third parties They face a highly regulated business environment with high levels of regional variation
Netflix, like Amazon, recognized the importance of bringing copies of their data close to the customer early on. But, with API-first, they approached every business need by evaluating how they might “compose” the solution using APIs. This meant they could create new digital experiences without being shackled to large monolithic systems.
Netflix was able to channel the creativity of their employees and vendors by empowering teams to work on features independently. For example, it supported the personalization of user experiences by building a growing library of machine learning (ML) models that power the Netflix recommendations framework. They did all this while supporting an explosion in the variety of desktop, mobile, and gaming devices their members can use.
Takeaway: Follow Netflix’s example and take an API-first approach to creating digital experiences. Moving data to the edge is a first step. But with API-first, your internal employees, agents, vendors, and customers can quickly and easily build new solutions on top of those data structures.
3. Build fault-tolerant real-time workflows
Your customers and agents describe a long list of problems when interacting digitally with life and annuity insurers – outdated and confusing interfaces, call centers and email instead of digital self-service options, lack of personalization, disparate and siloed systems, lack of real-time updates, and no “institutional memory.” Sound familiar?
Dealing with all these systems without some form of orchestration is complicated. We can think of software microservices that support your digital experiences like musicians in an orchestra (e.g., a payment gateway). Your APIs are the scores that ensure communication between the musicians. But surprisingly, many software applications don’t pay enough attention to the role of the conductor. The conductor makes sure that the musicians perform the full score successfully. In digital experiences, we call this workflow. Workflow software decides when APIs are called, in what order, and what to do if an API call fails. Used skillfully, these workflow conductors can solve the problems we recapped above.
Maxim Fateev and Samar Abbas worked for AWS in 2009 when they created the first version of Amazon’s Simple Workflow (SWF) service. Then, in 2015, they came together at Uber to build a new open-source workflow platform called Cadence. This software handles all the various steps that must happen in a “fault-tolerant” manner from the instant you open your Uber app through when your trip is completed. This involves potentially hundreds of services – geolocation, routing, matching, communication, payment, and several machine learning models – almost as much complexity as the average e-app! Then, in 2019, they decided to leave Uber and launch a company called Temporal to create a more powerful version of Cadence.
Takeaway: Learn from Uber and other digital innovators using Temporal’s workflow engine (in full disclosure, that includes Sureify). You can deploy solutions that delight agents and customers while successfully navigating the complexities of your back-end systems.
These ideas have shaped our digital experience products for the life and annuity industry. They operate as a set of three mutually supportive digital transformation strategies. Together, they can engage customers, attract distributors, and ultimately slash tens of billions of dollars from industry-wide budgets tied to legacy processes you’ll no longer need.
