Cory Crosland is Co-Founder and CEO of PolicyFly, Inc., a digital policy management platform that brings agents, brokers and underwriters into a seamless policy management experience. Cory was interviewed by Andrew Daniels, Founder and a Managing Director of InsurTech Ohio.
Cory, what misconceptions about digital transformation do you see plaguing agencies and insurers?
“I think there's a notion for incumbent insurers that any change means a full transformation of your business. That's kind of scary, right? It’s been working really well for a long time in this industry so to put that kind of pressure on transformation it becomes a non-starter to the conversation around innovation.
On the flip side, for insurtechs, I think there's this tendency because they're valued on these ‘tech multiples’ that they need to create everything. They approach every facet of operations as if they can't have anything off-the-shelf, so they instead go about attempting to automate everything. But building tech for the sake of building tech can be devastating. True innovation comes from building an expertise and working toward transformation, one step at a time.
So I think that’s where the similarities and pitfalls coincide between these two competing ends of the insurance industry spectrum. Insurtechs all too often setting the trend that you have to boil the ocean and incumbents thinking they have to in order to keep up. There's a lot of getting out over your skis as opposed to taking a more pragmatic step-by-step approach. Insurance has thousands of touch points and processes. That complexity demands that you focus on one workflow, one process, one line of business, and so-on at a time.”
Is there a right way to think about digital transformation? What are some of the right ways to do that?
“At PolicyFly we stress to our clients that digital transformation is a multi-year, multi-step journey. Each step toward deploying new digital capabilities and tooling should take weeks or a few months, but you can’t expect to take every step all at once.
In order to get the ball rolling we start with a thorough and honest self-assessment of how the client is performing within a competitive peer review.
Once you’ve established where you’re at, we like to map your baseline on a digital transformation scale of 1 through 10. A zero represents that everything runs manually. An email comes in with a submission, you manually rate it up, you put in the quote details and you type everything up in Word. This is a worthy place to start and a very smart initial approach for establishing a proof of concept, but as soon as you start ramping up your policy count, then you need to get off of a zero. On the opposite side would be a 10. This is where agents can self-service, are never asked a question that 3rd-party data could answer for them, quote options and approval are all immediately available, even on mobile. But the misconception is all-too-often that you have to be a 10.
Instead, this is a journey where you should be asking yourself, if I’m a 1 or a 2, how do I become a 3 or a 4? We want to establish a velocity for innovation over extended periods of time. This isn’t about turning on a light switch.
In fact, if you start by manually quoting and assembling policies, you'll learn everything you need to know to start automating these pieces. And if you're going direct-to-insured, maybe you start off with automating rate-quote-bind. Everything else like the self-service portals, downstream activities or claims could be run behind the scenes. This should be seen as a smart approach to building a successful business, not a failure.
When you think about insurance, it's quickly easy to get ahead of yourself on what you need to do, and that's just going to slow you down. If you look at a startup, the number one reason it fails is their timing. If you spend 2 years trying to automate everything before you get your product into widespread distribution, you’re going to miss the market opportunity. Cut the corners that you can live with cutting so long as you're in compliance with the rules and regulations.”
How do you help clients negotiate the conversation around digital transformation between management and those who handle the day-to-day operations?
“Management is always going to be immediately concerned with their return-on-investment and the big picture, so the greatest challenge is for the folks that are on the front lines to define the cost of each manual process. At the sametime, it’s very hard for day-to-day operations to pick their head up and invest the effort to properly package a presentation that management can understand and relate to.
I think that from a management perspective you have a responsibility to encourage your team to be thinking big picture and to help teach them how to outline their perspective in a way that can be equated to dollars and cents. For the day-to-day folks, it's really about approaching management with an interest in growing the business and connecting across departments to build a more thorough perspective on how digitization will help. That's where there's such a disconnect, but also an opportunity for the two sides to work better together. It's been incredibly frustrating to actually see great ideas at large companies not get the consideration they deserve because an executive summary or key stat is left unpolished. This is where management and ops burn time talking past each other and waste incremental opportunities to digitally transform.”
What have you seen from the innovation strategy perspective that can be a warning for others?
“The larger and longer the initiative is, the more scared you should be. If you’re talking about transformations that will require 6 months or more to experience and test the results it’s a red flag. You should always be hunting for incremental change and improving performance, so if you’re not even having the conversation you’re in even worse shape. In this industry if you’re not constantly reevaluating how to drive efficiency and value, your competition is and the market is only going to transform at an even faster clip moving forward.”