In my previous post, I explored the role of Managing General Agents (MGAs) in driving innovation within the insurance industry and proposed carriers should adopt more Autonomous Product Teams. These teams, with their autonomy, focus, and flexibility, allow carriers to escape the classic Innovator’s Dilemma.

For these teams to be truly autonomous, focused, and flexible they need to be small and have a wide enough wingspan. Specifically, they need software infrastructure that doesn’t require full engineering teams to set up.

Breaking down the monolith

To launch a new insurance product you need software that will be able to digitally underwrite, and sometimes digitally distribute, your product. The immediate suspect is a Policy Administration System (PAS). PASes are usually beasts of software and many of them claim to be the one-stop-shop for all the carrier’s tech needs across all lines of business.

However, the one-stop-shop Policy Administration Systems take years to build and configure. Just by the nature of the scope they need to handle they require hordes of engineers and business analysts: a setup that will surely kill the autonomy, focus, and flexibility of your Autonomous Product Team.

You need to provide your insurance commando teams with a lean, mean, product launching machines. Not an aircraft carrier. A Swiss knife, not a full on formal dining set. Something that would be easy to carry with you as you’re on the move.

But how does it scale? As the owner of technology for the carrier you need to make sure team members have access to the data for other processes in the organization. Compliance, audits, actuarial research, finance, business intelligence among others. Having a proliferation of disconnected systems and configurations risks things getting out of hand quickly.

Common core at the hub, autonomy at the spokes

To benefit from the best of both worlds, I propose a high-level “marketecture” where the Autonomous Product Teams are powered by lean systems that allow them to generate insurance transactions based on the latest iteration of their insurance product, while at the core of the system a common data storage and exchange layer collects, reconciles, and unifies data coming in from various underwriting systems.

A common data storage and exchange layer

At the heart of this infrastructure lies a space for data to be uniformly processed across business lines and distribution channels. This common repository of data serves as the foundation for any financial, product development, or customer insight initiative. By having all essential data in a single, centralized location, carriers can ensure that autonomous teams working in islands off of the mainland are still sending back all the data to the mothership and can rely on wider data coming back from the hub.

A unified data warehouse allows for consistency across the organization. It ensures that all teams, whether focused on traditional products or new, innovative offerings, are working from the same playbook. This level of consistency is essential for maintaining regulatory compliance, tracking performance, and ensuring that lessons learned in one part of the organization can be applied to others.

Fostering Flexibility with Independent Underwriting Technology

Each autonomous product team must be empowered to choose the underwriting technology that best suits their specific needs. Different teams will have different application questions, coverages, strategies, and target markets. A one-size-fits-all setup creates dependencies that slow down the teams and stifle autonomy and flexibility.

By allowing teams to select their own underwriting platforms, carriers can foster an environment where innovation thrives. Teams can experiment with different algorithms, models, and processes to find the best solutions for their unique challenges. This flexibility also allows teams to quickly pivot when necessary, adapting to market changes or new data insights without being held back by legacy systems.

Balancing Autonomy and Integration

One of the key challenges carriers will face is finding the right balance between autonomy and integration. While it’s important for teams to have the freedom to choose their own tools, these tools must still be able to integrate seamlessly with the carrier’s broader technology ecosystem and the common data storage and exchange layer.

By adopting cloud-based, API-driven platforms, carriers can allow teams to plug in their preferred tools while still maintaining a cohesive overall system. This approach provides the best of both worlds: the flexibility for teams to innovate and the integration needed to maintain consistency and control at the organizational level.

Building a Future-Ready Tech Stack

Ultimately, the technology stack that supports autonomous product teams must be both robust and adaptable. Carriers should prioritize investing in a common data warehouse and flexible underwriting platforms that allow for innovation and rapid iteration. At the same time, they must ensure that all systems are designed with integration in mind, so that the lessons learned by one team can benefit the entire organization.

As the insurance industry continues to evolve, the carriers that can strike this balance between autonomy and integration will be the ones that lead the way in innovation. By empowering their autonomous product teams with the right technology, these carriers can position themselves for success in an increasingly competitive market.

Learn more about the technology that can power your Autonomous Product Teams at joshuins.com.

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