pioneering a culture of innovation at American Modern

Sudheendra Galgali, VP, Head of Innovation and Digital, American Modern

Ahead of Insurance Innovators USA in Nashville this summer, we’re catching up with some of our speakers to get their insights on key themes of the conference. For the second interview of the series, Insurance Innovators spoke to Sudheendra Galgali (SG), VP and Head of Innovation and Digital at American Modern. Over a video call, SG discussed how he’s worked to create a culture of innovation, creativity and freedom at American Modern, and the exciting projects and results this has produced. It was a delight to catch-up with SG and we can’t wait to hear more from him in June!

What does innovation look like on a day-to-day basis at American Modern?

SG So, innovation for us is really a multi-fold exercise. We do have a dedicated innovation team, which is my team – and when we talk about innovation, we talk about a “bottom-up innovation” or call it “incremental innovation” that helps change our processes with our customer experiences on a regular basis.

This is a focused and dedicated team, it’s a fairly small team, but it’s intentional. Because what we believe is that innovation is not just the responsibility of a small team and a few team members, it is the responsibility of the entire company. So, on a fairly regular basis we engage with the rest of the organisation – all departments all functions – to help drive that mindset, to help change that culture, to invite them over into our way, our processes. And then also in the process, helping them, coaching them to do things when they go back into their own department. So, we engage significantly with all departments and all functions on a regular basis to identify challenges and opportunities. But then this dedicated [innovation] team has that external view, that connection into the insurtech ecosystem, into the industry and you bring in innovative solutions, and new technologies into the clinic. So, our day-to-day activity is really a lot of collaboration with the entire organisation. When coupled with the freedom and the latitude leadership provides associates to drive change in the organisation, that collaboration forms the foundation of the company’s bottom-up innovation philosophy.

How do you encourage people and teams to think more innovatively?

SG It’s really trying to give others the freedom and latitude to do things and to make mistakes; and we [the innovation team] are essentially a model to them – when you come over to work with us, there really is no wrong thing. You can only do things and then learn from mistakes – and we encourage that. The other part is we also ask them to think in small steps. Many times, with projects and initiatives there are issues because people start to think too big, and people start to plan too far out. We essentially say, “nothing is too small” and nothing is off limits.

The other way our group is founded, and innovation is set up here, is that we’re part of the CEO’s strategy group. It is not part of any of the individual functions. So, we have an overarching view and tremendous support from our CEO, which provides us with that freedom and that latitude to do things. So, we really try to encourage, to drive, people to think differently.

And we also celebrate our successes and failures. When we celebrate our success, you know, success breeds success, right? So, people look at it and say, “oh, if they could do that, we could do this too”, kind of thing – it’s almost like a flywheel effect. And we have been doing this for about 4 and a half years now – but 4 and a half years ago, it was a very different kind of environment, people were not sure what the ‘Innovation Group’ was going to do.  

How do you create a culture of continuous innovation at American Modern, whilst also consolidating digital gains?

SG Historically, projects involved putting something together and then waiting for 18 months for a result to get something at the end. Most of the time, that [result] is not what you were expecting, so we’ve basically done away with that, and instead we go for an agile, interoperative approach. Now when we see such results come out, we deliver that to the market – whether it’s a digital experience, a prototype that we are running with an insurtech partner, or a small pilot – whatever it is, it’s the small things that are put out there for the ultimate customer to use.  

And we bring that learning and feedback in and see how we should improve that next iteration. What that does, is it means that everybody in the organisation, including our customers, as well as our stakeholders inside the company, are able to see and feel something on a regular basis – that helps to drive continuous engagement. It’s not like “set it and forget it”, it is “set it and continue to operate on it”. 

And then the other part, is when a pilot or a prototype is successful, we immediately put that thing into production on a scale basis. Now, that does take some work and it does require support from the entire organisation. But because we’ve already proven with the pilot or the prototype, it’s just a matter of scaling it and operationalizing it, so we form a digital gain perspective before getting the solution to an operational scale.  

The success of the pilot, or the prototype, is not just on the technology itself, but also the benefit that is going to drive to us – if both of those match – we bring that into operationalization, and that drives the gains.  

So, we try to do small things – and that’s what earlier I called incremental innovation. We basically look at things in a step-by-step way. Anything that we do, any new solution or new technology, it is only of value, if it is sustainable in the organisation. If something comes in and we move it into the operational phase and then it dies there, that’s a waste of an effort all around. So that’s how we do it – incrementally trying things out, learning about it, if it’s successful, operationalizing it and then running that cycle all over again. 

How does innovation from outside the insurance industry inspire your work? What other areas or industries do you look to most?

SG I would say customer expectations and customer experience standards are being set by other industries – companies like Amazon, Google and others are setting the standard, in fact all retail organisations are setting the standard. Over the past couple years with COVID there has been a massive digitization and those expectations have multiplied, people can sit at home and do everything, get everything at your fingertips and why is insurance any different?

There was a time I remember, 7-8 years ago when I started in this industry, where it felt like people said, “oh insurance is different, it’s complicated”. But that can no longer be the case, because a customer says, “why is insurance any different?”, “why can’t I access my details, my coverage information, make my payment digitally?” – things like that. So, I would say everything that’s happening in all industries is affecting insurance – there is nothing industry specific anymore. These customer expectations and experiences are transcending industries.

And then the other part is data. The insurance industry has always been rich and heavy on data. But traditionally insurers have only used data for certain kind of analysis – primarily to cover risk assessment and pricing – and not necessarily using data to understand customer experience and stuff like that. Those things exist in other industries, so, I’d say there are potential opportunities as industries all learn from each other.

“Things are changing to a model of prevention and mitigation, rather than post-event recovery.”

Can you share a project that you’re working on in 2022 that you’re excited about?

SG There are many! I would say the biggest thing we’re working on in the company is our digital transformation strategy. Over the past six, seven, eight years, we’ve spent a lot of time on what we call our ‘business transformation initiative’, which was primarily internal transformation. We moved to one integrated modern core policy administration platform which enabled the retirement of seven legacy systems. W. That one single insurance administration platform that we have, now provides us with a significant foundation to go and provide the digital experiences to our customers that they’re expecting. So, to your question earlier about experiences that are transcending industries, previously when agents and policyholders expected certain types of experiences, it would be very difficult for us to do that on a legacy platform. On the new platform, we’ve launched our external ‘digital transformation strategy – which is a long running one that is going to completely change how our customers engage with us and how we engage with our customers in a digital-first way. So I would say that’s the most significant initiative that we have.

Tied into that is another thing I mentioned – our ‘Connected Home’ programme. We started out with water sensors and water leak sensors, trying to see how we can give our customers peace of mind. Because water losses happen over time and they can be significant, not just in terms of monetary impact, but also emotional impact too. So, how can we help our customers, mitigate that risk or even prevent it? So that’s another initiative that I’m excited about – digital transformation tied into connected home and providing value added services for customers.

Some quickfire opinions on some upcoming trends – are they fad or future? 

Blockchain  

SG I believe this is a technology worth watching in terms of how it would deliver value in the insurance space. There are many use cases across the P&C spectrum where Blockchain presents an innovative solution to solving key challenges. Examples include claims settlement, subrogation, etc.  

Metaverse

SG Again, as a consumer, I think there’s a lot on that front. But from an insurance standpoint where we are, we need to keep track of such new technology trends and assess relevance.

AR/VR

SG There are actually a lot of applications for us – whether it’s training our claims adjusters or our agents, training our customers on how to do home maintenance, or for underwriters as they evaluate and inspect properties. And we see applications for AR VR technology for estimation of losses as well as inspection technology. So definitely something we are actively looking at.

Web 3.0  

SG Very much the future! We are ourselves involved in it as we enable new digital experiences. Our experiences for customers are going to be Web 3.0 based because you know, it’s one single platform that can enable multiple experiences, so we don’t we don’t have to create separate apps on phones for iOS and Android. So, Web 3.0 is definitely here to stay, and that is the future. 

 Chatbots   

SG For me, chatbots are operational. I wouldn’t even consider them a fad or a trend, it is beyond that, it’s here to stay. We’ve implemented them – sure, there is a lot of room to grow and how we enable them – but, to me, they are just part of the omni channel digital experience for customers.