The Data Advantage
Ladder is one of the few companies we have seen in the life insurance industry that has built the full tech stack needed from the ground up to leverage data across every stage of the life insurance process.
There is an adage that life insurance is sold and not bought. In the traditional insurance ecosystem, insurance is sold and delivered by multiple parties from agents, brokers, and wholesalers to carriers and reinsurers. While incumbents in this space should have a data advantage, they often face challenges when trying to liberate their data across multiple disparate systems and entities. Yet this is an industry where data drives economics. The better data you have, the better you can be at acquiring customers, assessing risk, underwriting, managing claims, and retaining customer over time.
Ladder built data into the foundation of everything they do, and this is a core advantage to their business. They can use this data to create an innovative product, an ideal consumer experience, and a sustainable business model. As the industry continues to evolve, data will play an even larger role in the economics of all insurance companies.
Ladder designed the term life product solely with the end consumer in mind and did not have to take into consideration agents or brokers due to their direct-to-consumer distribution model.
One of the first product innovations was the launch of dynamic life insurance, which allows people to “Ladder Up” or “Ladder Down” coverage. The team understood that as people’s lives change, their life insurance should seamlessly change with them. For example, if someone has a second child they can Ladder up their coverage, or if someone’s child graduates from college, they can save money by Laddering down their coverage. Dynamic coverage allows life insurance to become a part of a consumer’s overall financial picture, which can adapt as their financial situation changes.
Enabling product innovation in this space does not come without its technological and regulatory challenges. Ladder’s proprietary technology and full stack enable them to innovate at the product level. Equally important, they have key partnerships in the industry, from reinsurers to financial institutions, to integrate their technology and bring these products to markets. All of these foundational decisions have set them up to continue to innovate on their product and consumer experience into the future.
You can tell from Ladder’s tagline “Data is the heart, people are the soul” that they fundamentally care about the consumer experience. They bring this tagline to life by consistently striving to provide the best consumer experience from purchase to claim. They know how important this product can be to somebody’s life, as it was for CEO Jamie Hale when he was a life insurance beneficiary. By making it easy to buy life insurance, they are ensuring that more consumers have the benefits of this product.
Many prospective life insurance consumers drop out of the purchase funnel because the existing process is so cumbersome. The traditional experience takes 8 weeks, a process which Ladder has brought down to minutes. Their system uses data analysis to help eliminate complexities within the traditional application process, enhancing the consumer experience. In their first year of launch, they are live across 44 states and writing hundreds of millions of dollars in coverage. It is also not surprising that a majority of their customers bought life insurance policies on a mobile device outside of work hours, so perhaps it is possible after all for insurance to be bought and not sold.
Ladder’s fully-digital product eliminates manual processes and commissioned sales agents as well, and these savings are passed on to the consumer. In our first interaction with Ladder and throughout our diligence process, it was clear that they aim to delight their consumers with everything they build.