Launching a new vision for a digital TPA: Insurance-in-a-box, the key to simplifying change in the life insurance industry

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In an ever-evolving industry, insurance carriers are familiar with the value a third-party administrator can offer. But for some carriers, the typical TPA doesn’t address the new challenges they face.

LIDP partnered with Sutherland, a global digital-first business process as a service (BPaaS) provider, to introduce an innovative, comprehensive solution that addresses more than technology and operations. Digital tools and AI drive middle-office and back-office digitization, customer experience (CX), and provide clearer insight into the carrier business and growth.

Their unique approach empowers carriers to fast-track life insurance and annuity product launches, enhance distribution, and improve the customer experience.

We recently had a conversation with Kimberly Duke, CMO and VP of sales at LIDP, about the potential of this carrier solution.

Identifying an unmet need in the market

The life insurance industry is at an inflection point, grappling with a significant talent shortage and the difficult task of overhauling core systems that drive business operations. Notably, carriers struggle to find employees who can straddle both the insurance and technology realms.

And they are experiencing difficulty shifting legacy mindsets to a more future-oriented, digital perspective.

To solve these challenges, LIDP joined forces with Sutherland to offer a next-gen digital TPA solution.

Sutherland’s vision is to be the premier and preferred provider of digitally enabled services for the insurance industry and help carriers maximize their customer lifetime value and increase their competitive advantage. Over the past decade, Sutherland has invested in and built 144 digital solutions, enabling insurers with integrated digital capabilities and driving ease of doing business.

With this new vision for a digital TPA, carriers will have more clarity regarding their everyday business and the power to launch products and accelerate growth. With control in the hands of the carrier, they don’t have to rely on the TPA to configure products. But the TPA will be there if needed, keeping the environments and technology up to date and core back-office operations running smoothly.

Bridging operational gaps

Carriers facing resource losses need solutions to easily transition from legacy systems, without extensive staff retraining or seeking new talent. They aim to control their growth, be it in new products or sales channels, while TPAs manage technology and operations. This highlights a market gap: a solution that merges technology and services without sidelining the carrier.

To work toward meeting that need, Sutherland partnered with LIDP’s Titanium as its platform of choice — an award-winning policy admin system known for its thousands of launch-ready products, ease of integration through APIs and enhanced ability to facilitate rapid changes.

The Titanium platform, underpinning this new TPA, is engineered to empower carriers with a ready-to-use robust alternative — with functionality previously unseen in the market — and the ability to design the optimal digital experience tailored to its unique needs.

Alleviating challenges with a holistic approach

This new approach to the TPA isn’t just about incorporating LIDP’s technology. Its effectiveness hinges on the partnership between Sutherland and LIDP, the latter with 44 years in the life insurance industry. Together, they offer tools and methods that reduce costs and enhance business agility.

LIDP’s deep life insurance expertise, reinforced by extensive research, identified key challenges faced by multiple carriers today, such as outdated legacy technology, a retiring workforce, and the need for comprehensive technological and operational overhauls.

In response, LIDP and Sutherland created a unique offering: a new vision for an insurance industry TPA that solves the resource gap and brings a modern technology core system to the table while also empowering the carrier.

This digital TPA solution is now emerging as a key tool to alleviate common carrier challenges. Its holistic approach — combining technology, operational expertise and advanced analytics tools — means carriers can easily plug-and-play this system into their infrastructure. The primary benefit is that it doesn’t require extensive personnel training or substantial infrastructure overhauls, thus removing the barriers to transformation.

Revolutionizing speed to market

One carrier customer, among the largest insurance companies in the U.S., found itself stuck, unable to launch products as quickly as needed because it had to wait on the TPA to configure them. This new TPA solution changed the game for the carrier.

With it, carriers gain the advantage of swift product launch timelines, unheard of with legacy systems. This ability to launch new, best-of-breed products in just two to six weeks, as opposed to six to 18 months, is revolutionary.

“In an industry where time is often the barrier to innovation, this solution drastically reduces it. Which means the days of being held back by legacy technology are over. Carriers can continue to grow and thrive without fear their systems can’t handle new demands or won’t support new innovations,” said Duke.

Sutherland has the experience of establishing a direct-to-consumer channel and achieving growth through speed to market for new product offerings. With hundreds of licensed agents and complementing digital technology, Sutherland is a dedicated partner and trusted advisory for the policyholder.

The competitive edge brought about by speed to market, plus the ability to respond quickly to market changes and seize new opportunities, helps carriers better meet the needs of today’s consumer.

“Looking ahead, it’s clear that digital transformation is no longer optional for carriers; it’s a must for survival. And here’s the good news: Our digital TPA solution is designed to fuel this transformation,” said Duke.

However, in considering their path to digital transformation, carriers must understand that one size doesn’t fit all.

A digital TPA option, while powerful and comprehensive, might not be the best fit for everyone. For instance, carriers with a substantial IT department and operational capabilities may be well positioned to implement and integrate a new system like Titanium into their existing infrastructure. By leveraging their in-house IT, product development and actuarial teams, they can adapt the new system to their specific needs, oversee the implementation process, and maintain the system going forward without a TPA.

On the other hand, many insurance carriers find value in a digital TPA solution due to the sheer scale and complexity of their operations. The benefits are many.

  • Scalability: Finding and retaining Life and Annuity operations professionals across the back office and contact center is a challenge for every insurer. Leveraging a TPA for operational bandwidth and experience helps eliminate that strain.
  • Efficiency and cost reduction: Operational cost reductions are table stakes for today’s TPA offerings. Optimizing and reimagining how your business operates and interacts with your distribution partners and policyholders is where a digital TPA separates itself from its legacy TPA peers.
  • Innovation: With deep partnerships with Google, Stanford University and Amazon, Sutherland is constantly looking at and testing emerging digital tools to continually evolve and improve service delivery. This allows them the flexibility to incorporate these concepts into the digital TPA ecosystem in a manageable way.
  • Focus: By delegating operational and technological tasks to a digital TPA, large carriers can concentrate their resources on core competencies — product development, underwriting, risk management and customer relationships.
  • Digital transformation: Large carriers often face challenges in digital transformation due to legacy systems and processes. A digital TPA can accelerate this transformation by leveraging their experience and best practices, providing advanced digital capabilities coupled with the necessary operational expertise.

Finding product-market fit

As this innovative partnership revolutionizes the insurance landscape, it’s important to consider who stands to benefit the most from this new take on the TPA.

The solution is designed for life insurance carriers with an eye toward the future — those keen on maximizing their growth and delivering superior experiences to their customers while simultaneously streamlining costs.

It’s for carriers seeking more than just tech integration. It appeals to those looking for a strategic partnership, one that brings not only advanced technology but also unparalleled operational expertise.

With this solution, carriers have access to comprehensive services such as call center operations, print centers, digital engineering, analytics tools, AI and more. This fully rounds out the suite of products necessary for success for life insurance carriers.

Duke stated, “It truly is insurance-in-a-box, but it keeps the power with the carrier. We can configure a product, or you, the carrier, can. No longer do you need to depend on the TPA to complete growth initiatives. You decide what’s best for you.”

Why does this matter? It’s about focus. By entrusting the tech and operational intricacies to seasoned experts, carriers can channel their resources toward what they do best: crafting top-tier products, honing their distribution strategies and refining their customer experience.

Empowering carriers for the digital future

“With our new technology, we ensure that carriers are up to date with the latest version of Titanium. Any enhancements made by the carrier or LIDP are thoroughly vetted through rigorous QA testing. This method guarantees a seamless upgrade and flawless integration of new products and enhancements into the base system,” Duke said.

She added, “Any life insurance carrier seeking to minimize costs while accelerating growth will find this type of TPA an ideal partner.

Carriers that aim to control their destiny and growth and are open to leveraging LIDP and Sutherland’s decades of expertise in life insurance and digital solutions will find they are in good hands. The future of insurance is digital, and with this robust TPA solution, carriers are well equipped to thrive in this new era.”