Being innovative in life insurance and pensions

Jason Whyte, UK

Associate Partner, Markets and Business Development, EMEIA Financial Services

 

As one journey ends, another begins. In January 2013, I was relaxing in a hotel in Mendoza, Argentina. I was nursing a frost-numbed toe, a twisted knee and a sunburned nose from climbing Mount Aconcagua, the highest mountain in the Andes, and looking forward to a tour of Mendoza’s wineries. Then — out of the blue — my phone rang. It was a friend from work, who was joining EY and encouraged me to do the same. It took a year of interviews and conversations, but in February 2014, I joined as a market facing director in the Insurance team. The more I learned about EY, the more convinced I became that I was joining an organization with the breadth of services and the commitment to the Insurance industry that would be needed to help my clients transform to overcome the challenges ahead.

I believed that my clients in the Life and Pensions sector were facing a period of unprecedented change, and I wanted to be somewhere that had the scale and breadth to help them with the complex challenges ahead. I wasn’t sure how or when it would come, but I was sure that clients would eventually have to address the “technology debt” of a decade, or more of underinvestment in their business, operations and technology.

I didn’t have long to wait. On 19 March 2014, the then chancellor delivered a budget that is still reshaping the industry today. His freedom and choice in pensions reforms gave customers new (but confusing) choices in retirement, and set insurers, asset managers and financial advisors competing to manage customer’s retirement pots. “Eventually” suddenly looked a lot closer.

One specific challenge concerned me: how can we help customers to take money from their pensions sensibly? Surveys showed that, under these new freedoms, many people wanted to take their whole pension pot and invest it somewhere else. But when you take a lump sum from a pension, you pay income tax as if it were a salary: the more you take in one go, the higher the rate that you might have to pay. Many people could save a lot of tax by leaving their money inside the pension and only taking it out as they needed it. How could we help them?

What if you could see and manage your pension on a mobile app that could also show you the tax consequences of different withdrawals? But who has all the skills needed to build a solution like that? The power of EY is that we do. When we pull together the right people across all our service lines, we really do have minds made for transforming financial services. Those questions have led to a collaboration between the Insurance sector team, our Personal Tax Centre and EY-Seren (our digital design specialists) to create a demo to help our clients help their customers manage their retirement. When we show it to end customers approaching retirement, they go on a journey from “Why would I need that?” to “Oh, I didn’t know about that” to “I would really want this to manage my money in retirement.” We now have two major Life & Pensions clients interested in taking it forward.

And that’s only the beginning. Our Life & Pensions clients are in a market, where change is happening from all sides. The need for new solutions has never been higher. But it takes time. A great rule of thumb that I learned from one of my early mentors is that it always takes at least two years for a new idea to get traction in the market. How do you balance that with the need to deliver this year’s challenging growth targets?

My role as a director and now associate partner, within a sector team has allowed me the flexibility to think on different timescales. As a team, we’ve drawn up a time line showing when we think clients will address different aspects of transformation — what’s on the agenda this year, next year and in the next three to five years’ time? This has helped us to work on developing new ideas, while not neglecting the opportunities in front of us today. Two of our big bets — technology-enabled transformation and robotic process automation — are things that we started talking about to clients three years ago, and we’re now the provider of choice. Today, we’re delivering those, while starting to talk about the next wave of digitalization, customer centricity and automating financial advice.

Our clients recognize that they need to become a truly digital businesses — but doing so will mean connecting with customers in a way they haven’t before, and they need to change from companies that have evolved slowly and sometimes grudgingly over the years into agile and innovative businesses. To help them do that, we first need to show them how EY innovates —but it’s only when you see all our innovative work in one place, that you realize just how much innovation we do.. A couple of weeks ago, I sat down at EY-Seren with a client’s director of innovation to discuss exactly that. We walked through our innovation methodology, and we also showcased eight recent examples of EY-led innovations — ranging from helping a health insurer rethink how it supports pregnancy, through to our analysis of UK customers’ personal balance sheets, to helping ensure that cargo is properly insured with our marine blockchain pilot.

His response was a call to action for all of us: “You should make more of these case studies — I had no idea that you did so much innovation.”