An insider’s view to being an actuary at an InsurTech startupOctober/November 2017
“Every day I hear massive clapping at 2 p.m., and it lasts for 30 minutes. What on earth goes on at your office?” asked one of the fellow tenants at our Mountain View, California, office building, located just down the road from Google.
I explained to her that my company, Health IQ, has a daily companywide stand-up meeting that is a unique part of our culture. Every day our 100-plus employees gather in our two offices, connected via a Skype feed, and one by one we tell our colleagues about an achievement we had in the last 24 hours. If it’s clap-worthy, the entire company will give a round of applause.
It’s all part of a culture that celebrates employee successes every day. And this is part of the broader mission of Health IQ, which celebrates the health conscious with social and financial rewards, such as lower-priced life insurance for runners, swimmers, weightlifters and vegans.
The mission of Health IQ is due to our founders’ previous health challenges. They come from backgrounds as very successful entrepreneurs; however, with so much focus on business success, they found they had neglected their personal health. With Health IQ, they set out to change that by building a company that celebrated the health conscious, and they launched a popular health literacy quiz app in 2014.
Today, Health IQ has evolved into an InsurTech life insurance agency that focuses on servicing the insurance needs of the health conscious. We have worked with forward-thinking insurance companies to create unique products that reflect the lower mortality and morbidity of the health conscious based on their dedication to living a healthy lifestyle.
Getting In the Door
I have worked as an actuary for 15 years in a variety of roles at large insurers and in consulting for companies in the United States and Europe. However, Health IQ is nothing like anything I’ve experienced before. When I first heard about the startup, the culture and the innovative business model both piqued my interest. A healthy diet and exercise have always been a part of my life, so the mission resonated with me. As an actuary, working with big data to take an innovative approach to insurance pricing was exactly the type of intellectual challenge I was seeking.
However, as I found out during the interview process, an important part of building a strong company culture is to be very strict about who is hired. During the eight-week interview process, I discussed my healthy lifestyle with the CEO; wrote a “brag sheet” describing every worthy professional, academic and health-related accomplishment I’ve achieved in my life; and completed two actuarial projects to prove to a group of nonactuaries that I could execute on the level of work they required.
But once I made it through the door, I found myself working with a group of like-minded individuals. Not only were my colleagues the best and brightest in their fields, they all shared a similar passion for living a healthy lifestyle. This makes it easy for all of us to rally around this common cause.
Walking the Talk
As a company, it’s one thing to talk up culture. But it’s an entirely different thing to back it up by financially investing in the health of its employees. I’m proud to say that Health IQ walks the talk.
In both of our offices, we’ve constructed a “Ninja Warrior” course, along with a spin area and yoga room. After our companywide stand-up meeting, all employees have the option to work out as they choose—family-style, as we call it. On any given day, we have different groups engaging in weightlifting, cross-fit, spinning, yoga, biking and running. Because the company recruits the health conscious as employees, we have trainers, yoga and spin instructors, and collegiate champion athletes among us—there is no shortage of colleagues to lead workouts. Don’t get caught with sugar in the office, as this is considered contraband at Health IQ.
Having a midday workout with my peers is beneficial on many levels. For one, it allows me to get to know people at my company with whom I wouldn’t typically work closely on a day-to-day basis. It builds camaraderie, acts as a unique recruiting tool and is a way to retain employees when so many companies are trying to poach the best talent in Silicon Valley.
Because our customers are the health conscious, we can build deeper, more personal relationships with them by having so much in common and an understanding of what drives them. As our sales experience emerges, I’ve seen this affinity connection lead to significantly lower lapse rates than what is observed in the industry as a whole.
Wearing Many Hats
During the two years I have worked at Health IQ, I have had the opportunity to wear many hats as our business has evolved. In the early days, I performed experience studies on the health conscious to quantify the improved mortality that comes from living a healthy life, applying this data to understand how it affects pricing. Being the first actuary, it was on me to build out our internal models in R.
When we began selling life insurance as a distributor, I set up a robust compliance department to ensure all agents were trained properly and following all applicable regulations.
At one point, we needed additional case managers, so I took on the task of hands-on managing the post-sale life insurance application process. This gave me the experience of working with carriers’ underwriters to get policies approved and communicating with customers on the status of their application. As a result, I gained a very different perspective on the underlying steps in the application process that is extremely valuable when designing a new product from the ground up.
New Challenges: Working Fast in a Slow Industry
One of the challenges of working at a startup in the insurance space is living in two very different worlds at the same time. Startups move at lightning speed as they invent new products and business models, and then rapidly evolve them as they gather data on how consumers respond with their wallets, pivoting as necessary. In contrast, I’m sure I’m not surprising anyone by stating that the insurance industry moves very slowly. Projects and resources are planned months or even years in advance. Important decisions take time and are seldom rushed.
Living in these two worlds simultaneously can be a real challenge to manage internal stakeholders who expect fast progress with the realities that a large organization can take a month or longer to make a decision.
I have found that educating both sides is the best way to manage expectations. Internally, my colleagues are now more aware of the timing at big companies. At the same time, with insurers, I have shown how new product concepts can be brought to market quicker than they realize, and that we can make modifications over time to improve sales and profitability by accumulating data—all while playing within the boundaries of insurance regulations.
When working with nonactuaries, I have learned when I am asked to provide an analysis to answer a business question that I need to evaluate what the priority is: speed or accuracy in the details. There are clearly times when a detailed analysis is required. However, there are other times when a back-of-the-envelope answer will do, as speed is more important than precision at times. At first this felt unnatural—especially when I knew I could build a model that can give a very precise answer—but at startups, imperfect information is a reality when driving business decisions in a new market. Failing quickly and learning from the experience can be more valuable than being slow and thorough in executing an idea.
I’ve seen firsthand that insurance does not need to be the commodity that some may perceive it to be. Creating products and experiences around what’s important to an audience can create a much deeper relationship and more loyal customers. While insurers may feel limited in how they can build more personal relationships with their customers, the sky is the limit when they partner with the right startup.
It’s been two years since I made the career change to join an InsurTech startup. However, with the speed and intensity of the work, it feels like I’ve had four years of learning and development. The opportunity to see the sales process from product idea to creating marketing strategies and ultimately training agents on how to sell the products gives me a much broader perspective than when I stepped into this role. The ability to work with big data to create unique pricing, while also learning from nonactuaries, has allowed me to see the industry through different lenses.