MassMutual’s tech transformation: migrating off legacy systems

July 11, 2022 6:30 AM

DI-MassmutualHQ_08302017 — MassMutual headquarters in Springfield, Massachusetts.

Digital Insurance spoke with Sherriff Balogun, head of platform transformation at MassMutual, who joined the company seven years ago as a data scientist, then began working on technology platforms and digital transformations four years ago. He now supervises the work of global transformation teams and is part of the carrier’s general technology leadership group. Balogun has been responsible for migration of legacy technologies to the most up-to-date systems, and integrating operational functions to present a unified experience to customers, as part of a multi-year process. MassMutual’s technology transformation includes Haven Technologies, an advanced insurtech platform for life and disability coverage that spun off from the carrier last year.

What is the focus of your current role at MassMutual?

I've been working in this space now for a while. The work that I've done has been figuring out how to invest in the new, cool things that are going to drive us into the future, but also spending a lot of time learning how the legacy environment works, especially for an incumbent like MassMutual that has done a lot of acquisitions in the past, built homegrown systems, and also bought systems and mangled them. It's been a cool opportunity to learn both sides of things and figure out where the biggest opportunity is and where synergies are. Sometimes there are things that we can learn from the way that things were done in the past. It’s taking that learning and mapping it onto what we’re trying to do.

I've had a hand in different parts of a digital ecosystem, which has given me a broad view of technology, which is nice and that I don't take for granted.

What was the state of MassMutual’s technology when you started your current role?

We’ve been in this transformative state during my time at the company. Data science was a disrupting capability. It was new to MassMutual and it was something that we saw as a huge asset and potential differentiator, just given the vast amount of data that we had accessible to us, over 100 years of existing as a company. I started in the state of transformation.

This exposed me to the strategic capabilities that we're trying to invest in longer-term, but also allowed me to understand where pain points are in our infrastructure and systems – and how that actually plays out in business outcomes. It limits our ability to go to market with something or offer a great customer advisor experience, weighs down our costs, and plays out in our prices. It all started to make sense because I saw real balancing impacts because of our overloaded legacy footprint. I was fortunate in that I had a decent amount of context coming into this role, although I have learned quite a lot in the last several months.

I don't think you're ever done transforming, because our external environment is always changing.

What is a pain point that you have been able to address successfully?

Integration, for driving outcomes for some constituencies. You want customers to have a seamless experience and feel delight and enjoyment by engaging with you as an organization. You need to have processes and systems that enable that kind of experience. As a legacy company, you're very rarely going to have a single system that solves every aspect of a problem that you need to solve. You’ll have systems for marketing, for underwriting, for policy administration, claims and fraud. The way that you enable a unified experience for a user is to make sure that those systems can talk to each other effectively.

API-based integrations try to get more of our platforms into the cloud to ease the burden of integrating those platforms. It’s making sure that we have good flows of data within systems, but also across systems, so that when someone goes to their website, they see the ability to change an address on their policy. They don't need to know that, that requires us sending data from a policy administration system via API to a web front-end and then displaying that to them. It should just work and it should be seamless. That's something that we've done really well. We still have more to do, but that's been a good example of where we've made a ton of progress.

What has been the biggest challenge so far in this role, and what will your biggest challenge be?

The biggest challenge so far has just been tuning our risk appetite intolerance to our transformation goals because those aren't transforming quickly as we're trying to do it. First, we’re acknowledging that fact. Second and more importantly, we’re making sure that we are asking the right questions to appropriately evaluate risk over time. That has been one of the most critical elements of being able to continue moving forward.

Making progress is hard because there's going to be a spectrum of risk tolerance and appetite across different groups. I might have a higher one because part of my job is pushing the transformation. But if you're a function in the organization that feels like a transformation is happening to them, then your risk tolerance is going to be different.

Getting that shared understanding of risk and shared kind of philosophy around it, is an ongoing challenge as it relates to legacy systems. People are retiring and there's key, niche institutional knowledge that you need to understand those systems enough to decide what to do with them, whether it's divest from them, deprecate them or try to optimize them, you need the people who understand them. By the day, by the week, by the year, more of that talent is becoming increasingly scarce just because of time. That reinforces the need to go fast, which then reinforces the need to make sure you can manage your risk.

When legacy systems are still in place, do you piece together different systems to replace those or look for one right system to replace them all?

There's a fair amount of due diligence that you have to do at any given time. Being really efficient about that due diligence and analysis is key because there are going to be instances where you need a capability assessment. You might have built business capabilities into a legacy system that was needed at the time, but your business model has changed. Your business strategy has changed.

Part of that analysis and due diligence is understanding what you are trying to solve for. Do you purely replace systems or just deprecate them and build something new? Are there features and functionality that you need to maintain and others that are less critical to your future? Those decisions are important and come from the analysis phase of this work.

How was Haven Technologies designed and how was it launched?

Haven Tech was born out of what was a distribution agency focused on getting products into policyholders' hands directly, without the support of an agent, direct to consumer. We realized you really need good technology to disrupt distribution. We didn’t see underwriting platforms out there meeting the need so we went and built one. We didn’t see a policy administration meeting the need, so we built one. Building all of this is not just building technology but building insurtech and putting it in production for live business. That gives more confidence about being able to scale it, its applicability in the market and its ability to capture the nuances of the insurance market. If you're actively launching products and building products on this platform in a real production setting, you know more about what it can do or what it can't do.

In some ways, we fell into this amazing technology. We built it to solve a market problem, which is usually where most successful innovation happens. We scaled that technology for direct consumer business. Then we took that technology and started to apply it to MassMutual's core business, which is advisor-sold. We now have half our business running through this end-to-end digital platform that is homegrown.

While we continue to leverage Haven Tech to transform MassMutual's business and transform MassMutual's infrastructure, we also spun them out about a year ago as a wholly-owned subsidiary to enable them to provide similar services to other carriers as a full SaaS provider. It enables us to achieve value in different ways, both as an investment and revenue generating entity, but also all of the value generation that we should experience and have experienced internally with our own system.