Virtuous Cycle of Innovation at Ethos
Vipul Sharma, Chief Technology Officer
Life insurance is sold, not bought. This is the conventional wisdom for this important financial product the majority of Americans depend on for the wellbeing of their families after their death. Lack of transparency, an extremely painful approval process, and sometimes aggressive sales practices are the primary reasons users delay their decisions to purchase a life insurance policy, which may end up being extremely devastating for their families. Ethos was created to change this and completely remove the pain and hassle we go through to protect our families financially.
How are we innovating to make buying a life insurance policy a delightful experience for our users? The answer is in the core tenets of our product development that enables us to rethink the entire problem and force us to innovate with a relentless focus on user experience. These tenets are designed to solve the problems that exist in life insurance today and shape our views for the future so that we can influence the industry for a better user experience.
These tenets, (transparency, speed, accessibility, affordability, and scalability) when applied across key pillars of our technology (platform, product, distribution, data, and infrastructure), form the framework for the disruption and innovation much required to move this really old industry forward.
Platform
From early on, we took the platform approach at Ethos. This was because the building blocks needed to craft the best insurance products are either lacking from the industry or still decades behind. At the core, insurance is a risk calculation problem. We need to collect data about users’ identity, health, income, habits, and lifestyles to create risk profiles so that we can recommend the best coverage at the right price. Our approach was that all of this should happen online, without cumbersome offline experiences such as having to go through a blood test and doctor’s appointment.
This was only possible if we became good at collecting this information from users, connecting it with available data from trusted data sources, analyzing it against risk indicators, and creating an accurate risk profile. It took a lot of hard work and deep thinking to create these systems so that we can quickly collect information, accurately calculate risk, and provide the right price to every single user that comes to us. We took the time to build these systems as a platform — which then enabled us to create new products & services rapidly. It took us 1 year to release our first insurance product vs only 6 weeks for our latest. Ninety-five percent of all users get an underwriting decision and personalized coverage in one user session without having their blood drawn.
There are a lot of exciting capabilities in our insurance platform that we are working on to bring similar innovation to other insurance products as we did with term life insurance.
Products
Crafting a delightful product that our users love is something that we care about a lot. This is an actual quote from a user,“The process was easy and quick. Received a life insurance policy immediately after trying to buy life insurance directly from companies for 6 months and not succeeding.” This is what it’s all about. Providing access to affordable, fast, painless life insurance to our users.
We spend a lot of time crafting products that result in accurate risk assessment without creating unnecessary friction for our users. We look at every question in our application, every piece of information we collect and weigh it against its efficacy in our risk models. Our consumer team is always experimenting with new flows to learn and optimize conversion rates resulting in the best mix of friction and risk assessment. Our application engine makes creating these flows and experimentation super easy enabling us to innovate faster.
Accessibility is another key tenet of our consumer experience. This means that we have a product for every user with the same delightful, fast, approval experience. In the last few years, we have built products for not only the young and healthy or wealthy and healthy (e.g. easier risks to price)but also for users who are in the middle market, older, have significant health risks. This ensures that we are extending access to traditionally marginalized populations who are typically underserved by the industry.
At the same time making our products affordable is another important area. In the last year, we have done several price reductions as we learn more about our users, form a clear understanding of the risk attached to them, and find appropriate pricing to cover this risk. This is only possible because of the ability to dive deeper into user data and risk indicators as our products, platform, and data systems work seamlessly to make this possible.
There is a lot under the hood in our consumer teams and a lot more to come here.
Distribution
Creating scalable, reusable platforms and delightful products will have no value if we cant efficiently learn to get our products in front of users. Learning to be efficient about distribution is a key to success for any growing company especially when competing in a large old industry. The innovation required is not just on product and technology but also on distribution.
We are focused on three areas: consumer marketing, our agent’s product, and partner APIs.
It takes a lot to get the consumer marketing growth engine humming. Understanding customer personas, data instrumentation, experimenting with attribution and targeting, countless landing page and new channel experiments, personalization, etc. Building the growth machinery takes time and a lot of experimentation. One of the key differentiating factors that make our consumer marketing extremely successful is our ability to dive deep into our data and automated approvals which provide real-time signals to our digital channels creating a virtuous cycle.
We are also innovating ahead of the pack in creating the world’s best platform for independent agents. Providing world-class automated products, infrastructure, and marketing support to our agents enables them to provide their customers with the delightful experience that they couldn’t before.
The rise of independent agents is a real phenomenon and building high-quality tools for them and making these agents successful is directly attached to our own success. We are fully committed to creating the #1 agent operating system in the world. This is the fastest-growing distribution channel at Ethos and a lot more exciting things will happen in 2022.
Data
Data is at the heart of everything we do. Other than data collection, extraction, transformation, and reporting analysis problems, which are crucial for decision making, the significant data problems at Ethos can be broken down into the following key areas:
- Predictive Underwriting — Our ability to understand the risk attached to a policy with data in hand and predicting key risk indicators. There are countless interesting problems here from data mining, automated feature generation and extraction problems, and risk classification.
- User Insights — Our ability to build high-quality products depends on insights we have on our users, both policyholders and agents. There are a lot of interesting problems ranging from personas, LTV, churn and fraud detection.
- Business Insights — Using data to inform key decisions and improve unit economics is at the heart of our business insights problems. These areas include marketing analytics, business intelligence, and predictive analytics.
- Data Governance and ELT — Transforming large datasets into structured well-formed data, which is well-understood and governed, is at the heart of accurate reporting and analysis. We spend a lot of time implementing and refining our transformation layer with evolving data needs.
Virtuous Cycle of Innovation
This virtuous cycle of high-quality platforms enables high-quality products distributed with innovative distribution, which generates proprietary data sets. This data, when mined further, makes platforms, products, and distribution even better at accelerating the speed of innovation.
I am excited to start our technology blog to provide regular updates on our progress and many innovative problems that Ethos’s incredible team is working on. We are taking on an important problem and bound to solve many unsolved problems on this journey. As exciting as it is to work on these issues, the real joy comes from providing protection and peace of mind to families.
Vipul is Chief Technology Officer of Ethos, leading a world class technology team changing the way people protect their families. Before Ethos he was cofounder and CEO of Simppler until its exit and led high performing teams at Indeed and Eventbrite. He is passionate about small teams changing huge industries with relentless focus and drive. When he’s not working, you can find him cooking for his friends and family or binge watching latest drama series. He is currently building a truck and working on his private pilot license. Interested in joining Vipul’s team? Learn more about our career opportunities here.
