South Africa’s Sanlam Indie leverages cloud to make life insurance easy

The pandemic was expected to hit the insurance industry especially hard, but insurers that that were already using cloud and emerging technologies to meet modern customer expectations were able to adapt and weather the COVID-19 storm.

Sanlam, a South African financial services group, sold more insurance products in the first four months of 2021 than it did during the same period in 2019, even though McKinsey & Company forecast that the coronavirus pandemic would hit the insurance industry twice as hard as the 2008 financial crisis.

Describing the cause of the slump as “a perfect storm of poor market returns, reduced customer demand, declining disposable income and distribution disruption”, the December 2020 research report from McKinsey stated that the sector would take twice as long to bounce back as it did during the 2008/2009 recession.

In the face of these dire predictions, the Sanlam group’s success can, in part, be attributed to the work of their younger business units, which predominantly sell online. Sanlam Indie, one of these businesses, raised sales by 68% from January to April 2021.

In this Q&A, Giulio di Giannatale, technology lead at Sanlam Indie, discusses how emerging technologies, like cloud — particularly SaaS and PaaS — have enabled them to move with the speed of the Internet and do financial services differently.

Can you tell us about Sanlam Indie, what makes you different from regular life insurers?

At Sanlam Indie we want to help people achieve financial independence and freedom by allowing them to buy a policy in a matter of minutes as and when they need it. Part of this entails educating our clientele while selling them a policy so that they understand what they’re getting and why they need it.

This is important because a lot of our clients are first time life insurance buyers so they often don’t know what they’re looking for. Our customers are people who don’t want to interact with a broker. They’re more comfortable transacting online and they’re savvy enough to help themselves. Thanks to digital solutions, our customers can explore their options and buy a policy that is right for them in one place without ever having to leave their homes. 

How do your processes compare to non-digital or non-cloud ways of doing things in your industry?

The biggest difference from the client side is that they can buy a high-quality product from us at any time of the day without having to go through a long and complicated process. It takes about 10 minutes for them to have a policy underwritten and in their inbox. Within the traditional industry, there are multiple human beings who have to do a series of manual tasks to get a policy issued, which can take weeks. We’ve streamlined our process by using an adaptive underwriting engine that presents customers with a series of very simple questions to answer.

We’re not using AI or machine learning here, it’s just a rules-based system developed by an actuary, which determines what an appropriate premium would be for the life being insured. A normal person without any health issues would probably only need to answer five or six questions to get issued with a policy. Someone with a more complex medical history will have to answer a few follow-up questions and may have to do a medical check.

You’re a cloud-first business. Why cloud?

Indie was built cloud first from the ground up. PaaS and SaaS give us the freedom to focus on our business because we don’t have to build and manage the infrastructure side of things. This approach also means that we don’t have to have a broad range of expertise around the services we’re using because it’s AWS’s job to take care of that.

The other cool part of it is that we don’t have to make a long-term investment. If we want to do a POC or test something, we just switch it on and if it’s not successful, we switch it off at the end of the month after paying for what we’ve used. The agility to switch services on and off without a long-term contract is very appealing for us.

What new services have you trialled in this way?

Compliance is probably the best example. We had a very short window to become compliant with South Africa’s Protection of Personal Information Act (POPIA), which aims to protect and regulate the use of personal information. In the cloud it was easy. We could put in a reverse proxy server and, in a very short space of time, we could add the additional layer of abstraction that was needed to be compliant. In addition to this, cloud gives us a lot of flexibility when it comes to data and the collection and analysis of this information. With cloud, we can store all of the data around our client interactions and then later use it to gain insights around who our customers are and what they want. 

What cloud platform and cloud-based software do you use and why?

We use AWS as our hosting platform. AWS has a wide breadth of services so anything that we want to play around with is available to us. They’re also very fast at bringing new services to the market. The scale that AWS affords us is ground breaking. We don’t have to build for our best days; we can build today and scale or downsize when we’re having a busier or a quieter month.

We use Google Workspace as our productivity suite. This really opens up enterprise-type collaboration to us, which is especially useful for our remote team. We’re container driven. We don’t have any servers; everything is serverless. In the traditional days, we’d build and deploy these monolithic servers but now we deploy small components that are standalone and can scale on their own. If a component breaks, it’s just one component. Our future goal is also to go fully event driven so that we can replay any events coming through the system without losing any integrity on the client side. If a component breaks, there might be a slight delay while the system is down but there’s no integrity loss.   

 Any key learnings from your experiences with cloud?

For me, the cloud is so valuable because you can build something that scales with your company over time, so it eliminates technical debt. If the company has to move quickly in a different direction, you aren’t bogged down by legacy systems. With cloud, it’s possible to start an enterprise scale business with a very small team of people. You no longer have to hire a massive team of engineers to look after your infrastructure. 

How does the tech team work with business, especially in terms of developing ideas for new services?

We have what we term “Links” in our team. They are business people, with business knowledge who work alongside the development team. So if we’re building a dashboard for our operations team, we’ll have a Link from that team working with us to make sure that we build a product that actually meets their needs and is well related to the business. We’re quite lucky in that we’re like a start-up in a big firm. So we have the freedom to innovate and try things out without needing to get approval from head office. Obviously there are constraints; anything we do has to comply with broader governance and compliance regulations.

 Any advice for IT leaders who want to challenge their industry’s status quo same?

Failure isn’t a bad thing. It’s okay to not get it right the first time. If you persevere and keep going, you’ll get better at it over time and hopefully you’ll find success along the way.