Digital transformation success stories: Guardian Life
When thinking of insurance companies, odds are that adjectives like “agile”, “digital”, and “innovative” are not the first to spring to mind.
Guardian Life Insurance Company of America, one of the largest mutual insurance companies in the world, stepped up to break this stereotype in 2016, by embarking on a company-wide digital transformation.
When Guardian started the process in 2016, digital transformation was still a new concept, especially in the insurance vertical. 6 years on, the situation is very different - the insurance industry is all about digital innovation, changing and rethinking business models, adoption of new digital tools and capabilities, streamlining product development, and transforming key functions.
In fact, Deloitte’s 2022 Insurance Industry Outlook shows that by 2023:
- 74% of insurance companies are planning to increase their spending on AI
- 72% on cloud computing and storage
- 67% on data analytics
- 63% on mobile technology
Simply Googling “insurance company digital transformation” makes it abundantly clear that other major insurance companies are following Guardian Life’s lead, realizing that digital technology investments have become crucial in terms of generating growth.
Why did Guardian Life embark on its digital transformation?
Pre-2016, Guardian Life was struggling to scale - their legacy systems and multiple mainframes running on different technologies made the development of new features and products lengthy, cumbersome, and costly. In a nutshell, Guardian’s technical infrastructure was limiting and inhibiting growth.
Guardian’s leadership reached the conclusion that in order to reach the type of flexibility, agility, innovation, and improvements required to take advantage of fast-evolving market needs, moving to a cloud-based model was the way to go.
In hindsight, this turned out to be a very smart decision - when the global pandemic forced everyone to do even more business online, Guardian Life was already well-placed to address existing customer needs and attract new customers who wanted the convenience of a digital experience.
Guardian Life’s goals for its transformation
Going into the process, Guardian Life set out several crucial goals for the project, including:
- Future-proofing products and services
- Reducing development time for new products and features on existing projects
- Faster testing and deployment
- Easier collaboration between different stakeholders
- Understand how customers want to interact with Guardian outside of legacy operating models and provided in an omnichannel setting
- Expansion of channels, as more employers and brokers want to connect with Guardian using APIs and digital pathways
- Data accessibility across different departments throughout the organization
- Reduce total cost of ownership of technology
How did Guardian Life do it?
Guardian Life’s leadership knew that they had to take a tailored approach to their digital transformation. While they needed an infrastructure that was aligned with their business needs and objectives, they also needed significant flexibility in order to allow for variation at the department level.
To help them plan, develop, and implement the new cloud-based infrastructure that would achieve their goals, Guardian Life partnered with Accenture Life Insurance & Annuity Platform (ALIP) and Amazon Web Services (AWS).
A transformation based on microservices
By moving from a legacy monolith to cloud-enabled microservices, Guardian was able to separate its front and backend components. This allowed the company to more rapidly scale its workload and improve both availability and resiliency.
Migrating to AWS
Recognizing the benefits of a container-based solution, including cost reduction and improved efficiency, Guardian Life migrated its on-premises systems to the cloud using AWS.
After assessing a variety of leading cloud vendors, including Microsoft, Google, IBM, and Oracle, Guardian selected AWS. Dean Del Vecchio, Guardian’s executive vice president, chief information officer (CIO), and head of enterprise shared services, had this to say about the decision:
Everyone was in the mix but the orchestration, capabilities, and toolsets [were a step ahead] from Amazon. AWS had a seven-year run where no one would even try to attempt to do what they do; their products are much more mature, especially when we were looking into this.
For the first stage of the transformation, Guardian used AWS for its direct-to-consumer website, GuardianDirect.com, where customers can directly research and buy insurance products online without the need for an agent.
Amazon EKS (Elastic Kubernetes Service) was a key component of their container-based architecture, giving Guardian Life the ability to easily run and scale Kubernetes applications on AWS. Amazon EKS also helped Guardian Life to significantly reduce costs while increasing employee productivity and providing the agility required to quickly respond to growing customer demands.
- 2018: 2 years into its digital transformation, Guardian Life closed its last on-premises data center.
- 2020: Like other companies across the globe, Guardian Life was forced to go virtual as COVID-19 brought in-person testing for life and health insurance policies to a halt. Since Guardian Life had already moved their production load to the AWS cloud, they were able to pivot far quicker than most of their competitors.
- 2021: Guardian further improved and modernized its environment, allowing 85% of workloads to be run on AWS.
Guardian Life also built Launchpad, an internal service that developers can use to directly provision infrastructure for projects without having to call in the infrastructure team.
Launchpad’s architecture includes Amazon ECS (Elastic Container Service), a fully managed container orchestration service that makes it easy for users to deploy, manage, and scale containerized applications.
Using Amazon ECS, Guardian’s developers were able to reduce their lead time for procuring infrastructure from 3–4 weeks to under 1 hour!
In addition to the move to AWS, Guardian Life also implemented ALIP, Accenture’s SaaS-based, cloud-enabled life insurance policy administration platform. Guardian needed agility and fast time-to-market, and ALIP’s low-code configuration met that need, offering a platform-neutral architecture that’s both modular and layered.
To ensure maximum flexibility and cloud performance, ALIP uses containers and microservices, while also following leading software delivery practices such as DevOps and Agile.
ALIP also allows for fast, seamless adoption of new technologies as opposed to the long, expensive processes previously required for updates.
Ensuring data privacy and security
Balancing the need to protect customer data while taking advantage of business insights that data can bring is tough. But together, Accenture and Guardian planned out an approach that maximized security while ensuring full data compliance, privacy, and security for its customers.
To further engage employees in the company’s digital transformation efforts, Guardian Life created its Automation for Good program.
In order to improve their employee experience, Guardian began automating Sisyphean tasks. The program is aimed at automating repetitive, time-consuming, mundane, transaction-heavy tasks, reducing frustration and increasing employee satisfaction.
A necessary shift to support the digital transformation
To support these changes, Guardian Life made an important but necessary internal shift to enable the company to maximize on benefits of the transformation.
By reorganizing into smaller, more independent teams, Guardian was able to ensure that all teams were properly trained on all the newly implemented technology.
Guardian’s digital transformation is still in progress
Guardian’s digital transformation journey is far from over - they recently introduced an automated claim processing system (ACPS) that is 100% paperless and enables them to settle customers’ claims in half the time, within as little as 5 business days.
Guardian Life also recently announced its next big step in its strategic digital transformation plans - they’ll soon be launching Bancassurance Service, where banks and insurance companies can work together to provide insurance services directly from bank branches.
What were the results of Guardian’s digital transformation?
Guardian’s digital transformation not only allowed the company to achieve its original goals, but also put the company in the unique position of being able to quickly pivot to the new post-pandemic reality.
- Roughly 85% of Guardian Life’s 450 applications now run on AWS, and the company aims to migrate the remaining 15 percent by the end of 2024.
- Previously, testing and deploying any changes to claim execution required a lengthy process. ALIP enabled Guardian Life to introduce changes on the fly and deploy them to production within hours!
- Another benefit of ALIP is its data management capabilities, enabling Guardian Life to access APIs and data as a single “source-of-truth”, even though they are spread across multiple locations.
- As of July 2021, 123 of the company’s microservices were built using Launchpad, saving the company $400,000 per year.
- Developer lead time for procuring infrastructure decreased from 3–4 weeks to under 1 hour.
- Digitizing their new business and adapting application and medical questionnaires allowed Guardian Life to increase its adoption rate from electronic applications from 40-50% to over 98%
- In 2020, most of Guardian Life’s approximately 9,000 employees were working from home, taking full advantage of the already-implemented cloud-based systems and applications. This wasn’t the first time Guardian was able to make remote working available to their employees - the first time they were able to introduce it to their workforce was back in 2012 after Hurricane Sandy, as they already had some public cloud and infrastructure in place.
- Following the launch of ACPS, as many as 60% of claims are settled within one day, while the remaining ones are settled within 5 business days, bringing extreme efficiency to the claims settlement process.
What can we learn from this example of digital transformation?
Guardian Life’s digital transformation proves that an insurance company can indeed be a fully modern, customer-obsessed company that can compete with innovative startups while maintaining its market leader position and size.
Not surprisingly, flexibility is a must - both market demands and technology are changing so rapidly that there’s no time for complacency and downtime. Flexibility gives companies the ability to move fast, empowering employees and driving business growth.
Guardian Life’s transformation teaches us that there’s always room to think bigger and expand further, in any vertical. Further, placing superior customer experience at the core of your business can put you in the perfect position to weather anything the market throws at you.