How Singapore Life built a technology architecture to embrace the digital transformation of insurance

How Singapore Life built a technology architecture to embrace the digital transformation of insurance

In 2014, insurance company Singapore Life was built on a simple belief: that the world needed a better life insurer which used technology to provide a superior experience for the customer.

In the years since, Singapore Life has grown significantly. Through the company’s acquisition of Zurich Life Singapore’s expansive insurance business portfolio in 2018, Singapore Life continues to push the boundaries of technology in financial services. As it navigates the digital revolution in financial services, through sound investment and technological innovation, the company has built an architecture that enables greater flexibility and technology implementation while keeping the customer at the heart of its operations. “We are not a fintech that creates intellectual property purely through technology,” says James Shanahan, Chief Operating Officer (COO) at Singapore Life. “Instead we put that technology to use in a way which brings a unique business model to life.”

That business model, something that truly separates Singapore Life from other leading financial institutions worldwide, is centred on “disaggregating the traditional product in order to bring greater flexibility and ultimately a better buying experience and pricing for the customer”.

As technology continues to disrupt the traditional and now archaic means of buying and selling financial products, Shanahan believes that this has shone a light on what is a fundamentally broken market. “What’s broken isn’t the uptake of technology, it’s actually the attitude towards technology and the flexibility in how you sell financial services,” he says. “What we see are business models built on big systems and platforms that are very inflexible and typically reflect a cost-driven approach and this translates into a rigid, fixed sales approach and impersonal market offerings.”

Singapore Life disaggregates the product and breaks them down into multiple levels: product configuration, service orchestration and market offering. At the product configuration level, Singapore Life’s back end functionality allows the company to build products as wide-reaching as possible in terms of defining or limiting parameters. This takes into consideration as wide a number of possibilities as possible, such as different currencies or interest rates. “Why should there be market specific limits at the back end? “, asks Shanahan. The middle layer, service orchestration, is key to facilitating Singapore Life’s market offering. “This model allows for much lower costs and breaks down some of the complexities of the process,” says Shanahan. “Once a product is set up and the service configured, the offering can then serve multiple markets. It makes the front end very flexible because what can be offered is orchestrated in that middle layer.” Given various different mediums which customers use to access financial services, such as mobile applications, online portals or third-party platforms, Singapore Life’s back end functionality allows the front end delivery model to operate almost unconstrained. “None of the front end changes the back end product configuration. It’s all about the customer journey and their experience at the front end,” he says. “We’re able to produce or work with an unlimited variety of front ends that connect to the orchestration, in order to service multiple markets, regardless of medium, language, geography, buying customs or other channel characteristics. Singapore Life’s architecture is designed in a way that removes the restrictions that are inherently built into the traditional ‘fully integrated’ sales process.”

Removing the historical rigidity of developing and selling financial services allows Singapore Life to reconceive its business operating model and to deliver what it believes has been missing from the financial services landscape, which is the flexibility to adapt to the customer’s needs rapidly, to offer services which reflect contemporary pricing and crafting experiences that delight their customers, ultimately resulting in better financial outcomes for all stakeholders. “We are not so arrogant as to expect people will only buy product X through an app, or through partner X’s site or in only one way,” says Shanahan. “We want to allow all our partners, our own teams and others in our ecosystem to invent new sales experiences, channels and mediums and be able to interact with us via an API layer at the orchestration level. We don’t profess to have the definitive answer as to the best way to sell financial services; instead, we strive to enable as much flexibility as possible and to allow exploration and discovery to lead us to better outcomes, all the while building a capability which compounds the speed of that discovery over time.”

The financial strategy underpinning Singapore Life’s unique business operating model leverages the concept of its emerging platform economy and the network effects which are becoming evident amongst Singapore Life’s customers and its ecosystem.

“We have constructed a platform that it is incredibly flexible and operates at a cost which is at least an order of magnitude lower than prior solutions. In previous generations it was not possible to enjoy tiny incremental cost of distribution while deploying high flexibility and rapid iteration,” says Shanahan. “Our operating model delivers this and further allows us to consider multiple low cost, high volume back ends which expand the scope of services our customers enjoy, while new geographies and partnerships can be explored rapidly and without architectural complexity via front ends.”

Ultimately the platform economics bring about an increasing productivity gain over time, delivering on and continuously strengthening Singapore Life’s unique business model promise.

Technology is key to achieving increased productivity throughout the company and its ecosystem, but the operating model is perhaps of greater importance. As Shanahan notes, the technology platform cannot operate in isolation and so Singapore Life invests in its operating model by bringing in partners to create further flexibility, managing the operating model via a governance approach which fully leverages its open ecosystem.

He describes Singapore Life as the ‘architects’ that oversee the design, the funding and allocation of capital, and the company’s roadmaps, the distributing 100% of its development and back office operations to create an ecosystem of the likeminded. “The idea is that we don’t want ‘vendors’ or someone who’s just trying to sell us something,” he says. “We also don’t want partners, which simply implies a level of seniority. What we really want are friends.” Shanahan continues: “When we say, ‘open ecosystem,’ it's an ecosystem of people who are like minded when it comes to achieving our vision, who've got each other's back, who are simpatico in their understanding, and whose incentives, both emotional and professional, are aligned to the same goals.”

In bringing this open ecosystem to life, Singapore Life can drive robust and rapid changes in both the organisation and the industry. To this end, Singapore Life works closely with local and international partners such as Amazon, GrowthOps, Ranosys, Sapiens and LogiGear to develop, test and implement leading-edge software solutions to accelerate the company’s growth. “The most important thing for Singapore Life is working with companies that can enable an extreme level of flexibility, to bring in new and different resources as well as different types of skillsets,” says Shanahan. “We then end up with organisations that we've effectively grown with – people that believe in our philosophy, our vision,where we're trying to get to.”

GrowthOps in particular has been a key driver of growth for Singapore Life, having worked with the company since April 2017. Singapore Life engaged GrowthOps as a technology advisory partner to improve its infrastructure, cloud security, compliance and business continuity.

In Oct 2017, Singapore Life officially went live with its client portal and high net worth online offerings. Since then, GrowthOps has been working in partnership with the company in five areas: cost optimisation, security, reliability, performance and operational excellence. “Singapore Life engaged us to develop a robust technology infrastructure that could be leveraged to provide financial solutions directly to its clients,” says Jason Morrissey, Partner, GrowthOps. “GrowthOps is excited to be involved in the expansion story of a digitally-focused financial services company, and our teams look forward to further developing our relationship in 2019 and beyond.”

At the very heart of every decision that Singapore Life takes, be it operations, finance or technology, is the customer. In the financial services space, the customer can take on many forms and in order for Singapore Life to deliver the very best for them it needs to understand how the contemporary customer behaves. In Singapore, the modern customer is time-poor and this has seen companies look to tap into this market by creating mobile applications in order to bring them insurance and other financial products. Singapore Life recognises that while this can bring success, it’s not representative of the customer experience that Singapore Life seeks to provide. “The key for us is observing that time-poor state and thinking how we can build a smooth, compelling and attractive experience for that customer,” says Shanahan. “There are so many apps in the market now I couldn’t possibly tell you which one is going to ‘win’. We want to experiment, use our flexibility and other capabilities to discover what works for customers in real life.”

Singapore Life is an incredibly ambitious company. By early 2019 the company was valued at over US$200mn and had achieved profitability in its first full year of operation, making it Singapore’s fastest growing life insurer. With a wholly flexible and incredibly unique architecture in place, the sky is well and truly the limit. As ‘the next generation’ financial services company, what does the future hold for Singapore Life? The company has outlined its ambitions to expand into the ASEAN market, to significantly broaden its insurance portfolio and to expand to other financial services, using its operating model, licence and rapidly expanding capital base to renovate and reinvigorate financial services. It will achieve this with the help of those key partners. “GrowthOps works closely with Singapore Life’s management team and is supporting the company’s digital expansion in Southeast Asia,” says Morrissey. “Moreover, GrowthOps is further enhancing Singapore Life’s technology infrastructure to support its strong business plans and push to enter new markets and rollout additional lines of business. From the outset GrowthOps has worked with Singapore Life to ensure the technologies are in place to support the company’s goal of becoming a preferred Singaporean financial services company.”

For Singapore Life, this goal will be achieved by keeping the customer at the heart of its operations. “Our intention is to fill the more holistic financial services needs of individuals and to continue to work with our ecosystem to bring new and wonderful things to our expanding markets,” says Shanahan. “With our architecture powering growth, it's now time for Singapore Life to come of age and step into adulthood in terms of our standing as a regional champion.”

Walter de Oude