Modern distribution for the modern insurer

Our conversation with Security Benefit's COO Jackie Morales at ITC Vegas 2022

ITC 2022 Slide

To stay competitive and meet clients where and how they want to be met, the most successful insurers are laser-focused on creating a modern, consumer-centric experience. Many carriers have shifted their focus to implementing technology that meets the rapidly growing appetite for simplicity, automation, and convenience, including digitalizing across all distribution channels.

In this session from InsurTech Connect Vegas 2022, Kelly Maheu, Vertafore’s VP of Industry Solutions, hosts an “Ask Me Anything” session with industry veteran and Security Benefit COO, Jackie Morales. Watch their conversation, or read the transcript for insights on what it takes for the modern insurer to keep up with ever-evolving customer demands in a digital world.

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Kelly Maheu: Good afternoon. My name is Kelly Maheu. I am the vice president of Industry Solutions at Vertafore. I focus primarily on the carrier and MGA Solutions at Vertafore, and that is across our life and health annuities and P&C products. Our vision quite simply is insurance distribution that's simpler, smarter and more human. So that's why I'm so excited to be here today to talk about modern distribution for the modern insurer.

My guest today is Jackie Morales. She is COO of Security Benefit Life, and she has gamely agreed to answer your questions and ask her anything today. I want to give a little background about Jackie first before we get started. Throughout her more than 30-year career, Jackie has held leadership roles and helped chart growth strategies, most recently at an insurer tech startup in New York, where she served as chief insurance officer responsible for insurance carrier, reinsurer and banking setup and strategic planning and the formation of TPPA activities for the business.

Prior to that, Jackie was with Bristow in Dallas, where she was Chief Insurance Officer and board director. Previous leadership positions include CEO and Board Director for Legal and General America and several different head of operations positions during her ten years at AXA Equitable. In these various roles, she was responsible for establishing scalable infrastructure internally leading digital transformation initiatives, implementing new tools to create operational efficiency and overseeing M&A activity. Jackie is a licensed insurance agent, has served on numerous committees for industry trade groups and is often cited by the media as an expert in life insurance and annuities. Jackie, did I miss anything?

Jackie Morales: No. But I want her to follow me around wherever I go and talk about me. No, thank you so much. That was really awesome.

Kelly: Let's get started firing away with some questions. This is a this is a good one: Does carrier digital transformation create roadblocks and conflict internally?

Jackie: You know, I think it's very interesting, having been at both an insurer tech and at several insurance companies. I think the challenge that is internal for carriers is not the knowledge and the need that they have to do something digital. It's akin to changing the wing on a plane while it's in the air.

So you have all of these priorities. You have all of these things you need to do, but you also need to evolve with the needs of the distribution partners that you have and the clients that you have, the customers, the policyholders.

The truth is: most carriers have been around. Most of the carriers I've worked for have been around well over 100 years. So there are no original employees that I know of, and it's hard for them to grasp the fact that they're on mainframes and everybody else is here. And so how does a carrier get from batch processing to real time? How do they build what the InsurTechs have mastered, which is the ability to communicate with immediacy through API integrations and how do they find their way there?

I think that the carriers all know it in their heads, and those that have adopted it in their hearts are making the evolution. Fortunately, I've had the great opportunity to join a company like Security Benefit Life who is making that transition. So it kind of allows me to take the best of what I know from the insurance space, the carrier space, what I've learned in the InsurTech space, merge them together and help drive that forward.

Kelly: Great! So related: what are the biggest tech hurdles that once solved will make the adoption of digital distribution for life insurance the industry norm?

Jackie: The greatest tech hurdle is going to sound really weird. It's getting yourself off paper. It's breaking the paper chain? And it gets even more complicated than that because solutions that are coming toward the distribution partners and the carriers out there are quite fragmented. And it's really interesting because direct-to-consumer was where the insurtech started, right? We're just going to go directly to the client and we can bypass all the distribution.

But the truth is in this business, this is a once or twice in a lifetime purchase for someone. That makes the role of the agent and the advisor in that trusted relationship so critical. And so how do you empower and equip the adviser with the right tooling to communicate effectively with their twenty-first century client? How do you create the capability to transition fully away from paper? So I think the biggest tech hurdle is getting off of the paper and into the digital, into the phone, the iPad, or the computer.

Kelly: I like this next one. How would you characterize the dynamic between today's modern carriers and the insurer tech startups they compete with? Do you classify the dynamic as a competition?

Jackie: It’s been interesting to watch because at the very beginning InsurTech said “A carrier, stupid, they're old. They don't know what to do. They're not relevant. They don't understand the future client.” And the carriers went, “Oh, those InsurTechs, they're really cute. They should go over there and have some fun and they might do some interesting things.” But, you know, I think what they've both realized is the carriers have something to bring to the table and the InsurTechs also have something to bring to the table.

Why do I say that? Having been at both, what the InsurTech realized is carriers had things like depth, depth of resources, depth of knowledge, and they brought an understanding of an extremely complex regulatory environment. So you're in a space where the barrier to entry for insurance is 51 jurisdictions, and that's just on the insurance space. Imagine if you have a regulated product by the SEC, now you've got FINRA. And so that was a big barrier to entry. What InsurTechs brought forward was they broke the ice on going completely digital, on getting rid of the paper, being able to really say it is possible and here's how.

And the thing that made the InsurTechs actually prove themselves out was a little thing we call COVID. I was working at an InsurTech when COVID happened. I was talking to distribution partners and trying to convince them to come on board and give us the opportunity. They had dealt primarily with carriers and overnight they couldn't do business. They couldn’t get in front of somebody to get a signature, you can’t go to someone's house. Nobody could get in there to do an exam.

And so overnight, COVID helped prove the relevance and the need for what the InsurTech brought forward. And now the carriers are able to take what that learning is. There was a lot of of learnings from each other. And I would say now that there are InsurTechs and carriers that are looking to partner for the future and they're trying to figure out how to share what they each one of them do best to grow together.

Kelly: So customer needs are certainly evolving—can't argue with that. What are some of the challenges they are facing and how are insurance carriers responding?

Jackie: It's very interesting because the customer is evolving probably faster than we as an industry can. And why is that? Well, I keep holding up this crazy iPhone, right? These smartphones. They're super smart and they move faster than we do. It used to be when you were a carrier or an agent and you were out in the field, you were being compared to other carriers and other agents that were out there. That doesn't exist anymore.

From a service standpoint, consumers want you where they want you to be when they want you to be there. For instance, they may want to self-service—until they don't. They may want to do business in the middle of the night when they have 5 minutes and the kids have gone to bed. What is happening is the consumer is driving the need for you to be where they want you to be when they want you to be there. Leave them alone when they want to be left alone, but be there for help when they do.

No longer are you compared again only to the other insurance companies. You're compared to their bank. You're compared to their credit card company. You're compared to their online shopping experience. So, you know, Amazon, thank you so much. One click and you're done. Right? And so we're living in a world where the consumers are driving how we need to evolve. And I think it's going to continue to happen that way.

Kelly: Right. And the acceleration over the last couple of years of that very thing.

Jackie: Yeah, it is like the speed of light.

Kelly: Absolutely. As carriers emphasize a customer-first culture, what impact are you seeing in terms of customer response and adoption of these new capabilities?

Jackie: The customer is waiting for us to come to them in a way that they want us to be. All carriers and distributors are at different levels. Some have much more adapted to the growing and changing world that we're in. Others are going to need to make that evolution.

The one thing I would say about distributors: you have to realize that agents, advisors, distributors are at different spectrums. You have changing demographics within the distribution, space, age, gender—those things are evolving. And so you have to also respect that it isn't a one size fits all. You need to meet distributors and consumers where they're at. That creates a bit of challenge for us because now, it isn't just a piece of paper and a phone call. It's a piece of paper, it's a phone call, it's a digital application, an email, a chat—it's all those things. And we have to be equipped and ready for that. Because consumers are waiting for us.

Kelly: Okay, so try to get a good one here. What does the digital native large-market broker look like? What's the role of the human versus the technology?

Jackie: The one thing I can say with great conviction is this will always be a people business. This is a business where we do not sell widgets or produce widgets. We are helping people solve problems, calm their fears, give them peace of mind. If you're if you're in P&C, you're trying to protect something you own. If you're in health, you're trying to protect against catastrophic loss. If something happens, if you're in life insurance, you're trying to protect the people and things that you love should something terrible happen to you. And in the annuity business, which I can refer to often as the happiest insurance, which is you're going to give me your money and I promise to give you back more and give you dignity and retirement. It really is a business about people.

And those folks that are the distributors and those that are much more digital-native, they're not carrying the weight or the chains that I say sometimes weigh us down. They're ready and they're there to evolve. They're ready to move forward. They're going to be nimble. They're going to be flexible. But we have to respect that as the as the business changes, it's not a flip the switch and it's done. You've got to help those who aren't natives get there as well.

Kelly: How are insurance carriers going about digitizing their operations? And does that extend through the whole buyer journey?

Jackie: It does. And it's great that we all recognize that. Like I said, the good companies realize they need to make the change. The great companies are actually doing that. What you have to make sure you're doing too as an insurance company, whether you do your own operations or you work with trusted partners, you have to partner with people who have like minds, who share that vision for the future.

And again, it's shifting. There are no radical moves. You have to take people on a journey. You have to make sure that you're evolving to the right technology and making sure that you're going there in unison with your IT partners. Because in many carriers you're talking certainly hundreds of thousands of customers, and potentially millions of customers, that you need to evolve without disrupting anything that's already in place.

Kelly: So do we need underwriters in digital insurance? And why aren't actuaries enough?

Jackie: There's room for everybody at the table. Here's what I think about underwriters. Underwriters were kind of like distribution when InsurTech started. They said, “We don't need underwriters!” The truth is, you do need underwriters because somebody's got to make the rules and make sure the rules are right. I think the role of an underwriter is really to look at the complicated stuff—they need to reassess these rules and engines that are built. The rules are put in place by people who have the knowledge.

So underwriters are always going to have a role in making sure the rules are sound. They're going to work with the actuaries and the data scientists. You need to be able to set the rules. You need to be able to see them in action. You need to be able to examine them and tell you tell you what the data is telling you. You need to make sure that the actuaries are in agreement that what they expected to happen did. And then you have to be able to adjust, constantly adjusting. And that's people looking at data to make sound decisions.

Kelly: All right. Something I know you're passionate about and I'm passionate about as well. As a woman executive, is change happening in the insurance industry and are there viable career opportunities for women to consider?

Jackie: Yes, yes, yes to all of that. I am very passionate about women and insurance. And I think that this is a tremendous career for women. I was so fortunate at a very young age to realize that this was a business about people. I liked working with people. I liked managing people. And I also got to see the importance of insurance policies in action.

The first insurance company I ever worked for was called America Life, and it was a medium sized company. And one of the first reasons that I realized I loved the industry so much was I was a VP at 28. So that was awesome—until somebody asked me a hard question. We had a customer who contacted us questioning the calculation of a universal life policy because he felt it was inaccurate. He and his wife came into my office and sat down and we went through it. And he was correct. He was one of the first carrier customers on this particular product, and it wasn't calculating properly.

We were able to acknowledge that. We had the actuaries look at it and we were able to make the adjustments and correct his policy. And I felt good about solving his problem and working with him. And two years later, I got a call from him and he said, “Do you remember me?” And I said, “Oh, of course, I remember you.” And he said, “Well, I need your help with something else.” And I thought, what happened to the policy now? And he said, “My wife has passed away and I don't know what to do.”

It was the realization at a very young age that this business isn't about applications or pieces of paper or transactions. This is a business about people. And I was able to help him through maybe the most difficult thing in his whole life: the loss of his wife of more than 50 years. For me, it created an opportunity for me to understand the importance of what we do each day and not take it for granted.

More than 90% of the population of people in customer service are women. And about 60% of distribution is populated with women. But it's a very low number as you continue to go up. Senior executives, it's a very low number and it's one of those things where there's a lack of women in the industry, but there's also a lack of women purchasing insurance. So it's just a vast opportunity to encourage women to seek a career in insurance because it is fulfilling and it is meaningful. It's the opportunity for us to help women gain insurance.

I think one of the interesting statistics that we found was that as you look at women at different stages, whether they've never been married, whether they're married, whether they're divorced, there is a lack of understanding of financial security. There's a lack of the ability to know that they feel safe and secure in what they know. For me, bringing women through, mentoring women through and I'm involved with some women in the insurance industry who are focused on trying to bring more women in, mentor more women create. Wellness in the space of women as leaders. Sometimes people think they have to sacrifice it all. The fact is, you can have it all and be a woman executive. And so I want to find those people. I want to help mentor young, young women and men to find a fulfilling career. And it's all possible here.

Kelly: That is exciting. I think especially some of the younger professionals in the audience would be happy to hear that because that's an ongoing challenge.

Jackie: Yeah, and by the way, insurance is cool! I was standing in line to check in at the hotel, and the woman next to me was talking to the person, checking her in, and she said, “Well, what do you here for?” And she's like, “I'm doing this and that.” And he said, “Oh, I thought maybe you were here with all these insurance agents. They're having a big conference.” She said, “Do I look that boring?”

And I looked over and I was like, we not boring. I tell people all the time that this is the most exciting time to be in insurance. The digital transformation that's coming, what data is going to mean, how we're going to look as we move forward and how we're going to create relevance for the future—it just makes this a thrilling time.

Kelly: Absolutely. All right. We've gotten four or five more questions. Jackie has served as CEO, but she's also built companies from the ground up. What resonates with agents when getting them to be open to new tech?

Jackie: I think it's about what's in it for them. One of the hardest things to do is to convince someone to make this kind of purchase, especially in life insurance. If people have money to invest and put into an annuity or something like that, that makes sense. Or if you're setting up teachers with 403Bs or individuals with 401Ks, it's a little bit easier to understand. If you have to insure your car and you need health insurance….

But when you're talking about life insurance, it can take months and possibly even years to convince people to make those purchases. So it really is about creating the kind of environment that gives an advisor ease of doing business. It's about creating creative products, but that are easy to understand. It's about creating tools and technologies that enable that people business. It's about offering them opportunities to learn and evolve and creating the ability for them to say, “I can make that journey. I can take that the trip with you and you're not going to lose me” to that very valuable client that I'm trying to help.

Kelly: I think this would be a good one to wrap it up. How do you set expectations with customers about cross selling products with intimate knowledge you already have? Can you avoid the creepy factor?

Jackie: I think that's where I think it's important to have good marketing people because they help you figure out how to not be creepy, right? They're going to help you frame things in a way that’s not “I know everything about you” or like when you're on Facebook and they suggest something to you that you're like, “How did they know that?”

I think it is about creating the opportunities to look for their moments of truth. They purchase their first house, they get married, they have their first child. They have an event happen in their life, like they get a promotion. And that creates the need for greater security and more coverage. Because some of these purchases are things that require thought, time to step away, think about it again and come back.

I when I was researching many years ago to buy my life insurance policy, I'd gone through a divorce and I knew I needed coverage. And I ended up purchasing through a certain carrier because it was like an effortless thing. But another insurance company, I was getting notes for five years, and it was it was really bizarre that I was still getting these emails saying, “Are you interested in life insurance?” So don't be that. Don't be that creepy, because that was that's creepy. It's finding moments of truth and being there in a way that makes them go, “Oh, they know me, they want to help me.”

Kelly: And they're paying attention to when they are sharing that information. You are paying attention to what they're telling you and acting on it.

Jackie: Yeah. And I also think it's knowing that every department brings relevance and importance and that it isn't just about the actuaries and the underwriters and the operations people—it's also about the marketers and the salespeople and all the things that need to come together to really create that opportunity for solutions for clients and distributors.

Kelly: So we have two minutes left and I'd give you the opportunity if there's anything that we didn't cover. We covered a lot today. You answered a lot of questions. Is there anything else that you'd want to share with the group before we wrap up?

Jackie: I would just encourage everyone to help each other. What I love about this industry is it's a very generous industry. We tend to want to help each other, where you would think that carriers or distributors or other individuals or vendors would be extremely competitive. I have found this to be an incredibly generous, caring, concerned and really kind of fun industry. I've made some of my best friends here and I've had the opportunity to really help people grow.

So those that are new, seek those folks that know. Those of us that have been around, seek to mentor, create networks, introduce people. That's the most rewarding thing that I do, is send these virtual introduction emails that I do. Take care of one another because if we take care of each other, we can take care of our customers together, and there's plenty of them out there. There are so many underserved and under-insured people out there. And I think one of the mantras that both InsurTech and carriers bring forward is we know people need us, we have to find them and we have to make them feel safe to work with us and solve their problems.