[00:00]
Sherri Bycroft: The big misconception about APIs, in my opinion, is that they solve all the problems. What I would say is true is all it really does is move bad data faster, or uncover data problems you didn't know you had, unfortunately. And then you've got to be able to have people to solve those, you know. I mean, AI can't solve those problems. You still have to have humans in the mix.
Ansel Parikh: Welcome to another episode of The Current, a bi-monthly podcast exploring the intersection of people, finance, and data. I'm Ansel Parikh, co-founder of Finch, the connectivity platform for the employment ecosystem. And today I'm joined by Sherri Bycroft, the Director of Benefit Technology Relationships at Prudential Financial.
Sherri is part of the leadership team at Prudential, focusing on the strategy for connecting with the benefits technology ecosystem, managing partnerships with ben admin and payroll platforms, driving API adoption for everything from enrollment to real-time Evidence of Insurability decisions, and making sure Prudential's group insurance products are easily accessible to employers and employees. It's quite a lot under your hood. Sherri, welcome to the show.
Sherri: Thanks. Great to be here.
Ansel: So you've got this title, Director of Benefit Technology Relationships. I get the sense that that role did not exist, say, ten, fifteen years ago. How did you end up in this role that sits in this interesting intersection of insurance and technology? And what does the evolution of this role say about how the industry has changed?
Sherri: Yeah, it's funny. I've been in this space for over 25 years with two different insurance carriers. And when I think back to 20 years ago, I was literally sitting at a desk taking enrollment forms off of paper, typing people's information in, and we were just starting to do this thing called EDI, where really large groups were starting to send us files.
Fast forward to the last 20 years of me living in this world, exchanging data, and now we're doing APIs and transactional data. And even though we're really slow as an industry to get there, right? APIs have been around a long time. But insurance isn't the fastest mover on those types of things. We're a little traditional. Prudential's been around for over 150 years, and we tend to be conservative in the way that we move sometimes.
But we really actually at Prudential are pretty on the front edge of the API development, I think, and really understand that this is the way that business has to move today. It's just the expectation of people that we have data very quickly, and EDI files that we were getting 20 years ago, once a week, just really isn't going to cut it today. So it used to be for really large groups, and now it's everybody, right? Groups of any size are transacting data super quickly like this.
[03:04]
Ansel: Yeah, you mentioned that it's become the expectation, the standard. And I think in past interviews, you even mentioned that your team now gets invited to finalist meetings. So when an employer is choosing a carrier, technology capability is part of that evaluation. That's a pretty dramatic shift. I can't imagine that was something that when you first started, they were even thinking about. So when did you start to see that change? When did you start to get looped into, “Oh, we're a key part of this decision right at the beginning of using which carrier, which service?”
Sherri: Yeah, that's really been more in the last five to ten years, I would say, that we've started to see that movement where technology is coming up earlier in the conversation, like before a group will even make a decision about what carrier they're going to go with. They want to know if you work with their platform, where their data is housed today. And it's the group and the broker that are asking those questions. I think even today, there's probably a lot of carriers out there that aren't asking that question early enough, like where is your data? And talking about our opportunity there.
But we hear from our sales team all the time now. In fact, we actually track it on our team. I think it was like three years ago, the number of finalists that we were being invited to is like a third of those that we even traveled to and visited with in person last year, because they want us at the table. So it's just interesting. It's a metric that we find really fascinating, that we are part of the conversation.
And we've heard from our top sales executives that it's not the rates that sell our coverage or even our products anymore, right? There's not that much differentiation. Life insurance and disability coverage, those things are somewhat standard of how the carriers sell. So it's really who can connect, who can do it well, who can exchange their data and make it smooth and easy for their HR team. Because HR teams are strained and their resources are minimal, and the easier it is for them, that's what's going to keep that group with you. And that's what they're going to focus on, is that experience of how do the claims experiences go? Do you have our people in your system when you need them? Those kinds of things are really key.
Ansel: Yeah, I love that. And I think that's getting to the next question around delivering ROI. Because we talk to a lot of companies across different industries, but especially insurance, they talk about digital transformation, and it seems like this amorphous thing that takes decades to get done. But Prudential's been really thoughtful about approaching this with connectivity as one of the pieces that is core to delivering that experience. I think you have over a hundred platform connections with ben admin systems. It's pretty astounding what you've all built. And so when you looked at digital transformation as a whole, how did you all decide connectivity was going to be one of the key centerpieces of that?
Sherri: I think by what we heard from our groups. Again, the groups and the brokers are driving the direction that we all need to go. And when you see that the business is going to move to where they can connect, you realize that that is key. And our leadership — we've had a lot of leadership change in the last four or five years here — and the leadership that is in place today here truly understands. They talk about connectivity all the time, and our importance of our digital transformation, and how we have to just do things faster, be ready to change, be ready to adapt. I mean, we hear this message internally all the time.
So I really think it is about how do we stay in front of the competition? How do we offer the solutions that everybody else has? And finding the right places — I think that's a really important part. Like you mentioned, there's over a hundred different platforms out there we connect with today. So you can't do that with a hundred platforms, right? So you have to pick out those key platforms where you see a good portion of business, or you see a really great opportunity to connect with them and to gain new business there. And what are you hearing about in the market, and things like that?
So we really have about a dozen or so really strategic partnerships that we focus on. And of those, really only about half are super connected themselves and really moving down the — all of them are working on it, but there's just a few that are really leading the pack. And those are the ones we are most interested in and focusing on, because they're the bigger players in that space and they're the ones gaining the business. So we need to stay engaged with them for our groups.
[07:44]
Ansel: Yeah. I love that you've taken this approach of, hey, customer centric, right? Because at the end of the day, they're the ones that are going to dictate where the funds flow, where they start to sign up policies. And so keeping that ear to the ground, I think, is absolutely important. And when you see these shifts happen, not over just a short period of time, but over a long one, you see the, “Oh, we need to invest for the next 10 years,” because this is not going to happen overnight, but it's also going to be something that when it does, you really can't be the last ones at the table.
And so I'm trying to understand — selfishly, Finch is also one of these connectivity platforms. We sit in the middle of all these different pieces of data. I'm curious, for you all, you have some that you go direct, obviously. There's some very strong strategic relationships. And then there's also this long tail. What changes for carriers if you can connect with a middleware provider and complement some of the things on the direct partnership side?
Sherri: Well, where you connect direct is, is that partner ready? Do they have the ability and do they have the means to manage multiple carriers trying to connect with them all at the same time, and all of that? So there's those decisions. And then the middleware piece, the middle players such as Finch — I think it's really where can we differentiate there, or where can we get a larger number of connections for one development effort, right? There's that piece. That's key.
And then the extra thing — not to make it a Finch commercial — but the extra thing that you guys really bring to the table for us is a place to get data that we really can't get via API through anywhere else today. And so we try and really keep an eye on what's going on in that middle space, because it has to be valuable in more than one way to justify the cost, right? I mean, there's cost involved with it. So you have to be cost conscious that all of these things cost money. And as much as people don't believe it, insurance companies do not have unlimited budgets. So we have to be really cost conscious about where we're partnering.
But I think that when you find something that's unique as far as what's the data you can get through that channel, and then how many can you connect to through that one source — when you see all that, it makes sense to spend the money and to spend your effort there, because you're going to get something you just can't really get or duplicate. Even if you build to all these other partners, it would take you so much longer and it would cost a lot more from a development perspective. So I think those are the things you have to weigh.
Ansel: Yeah, definitely cost is always a big constraint. And again, like you said, no one has unlimited budgets, even if they might be large. You still have to have returns, right? You have to see the benefits. And I think when we've had conversations in the past, there's been some interesting use cases where you see an opportunity to really reshape that employer experience. And one of the use cases I'd love to dig into is Evidence of Insurability decisions, or EOI. And now you're using an API to automate some of those decisions with real-time access to data. Can you walk us through what that means in practice? How does it impact, say, completion rates or the employee experience? Trying to understand the investments you've made up front, what that means for the end experience.
[11:09]
Sherri: Yeah, so Evidence of Insurability is so interesting, because what you're transmitting back and forth really is somewhat simple, but it has such a big impact. And it's probably our — well, it is our most common connection with different platforms, and our most popular. Groups love it. It takes some of the manual work off of them that they're doing today. But most importantly, you mentioned completion rates.
So having a single sign-on experience for us to direct from a platform right into our website, to get them to complete their Evidence of Insurability in real time, when they're in their enrollment experience — for the member, is huge. We track that against other forms, whether it's we send out an email after they complete the enrollment, which we've had that available for a long, long time too. We send out an email to the employee, they have to click a link, go in, fill out the form, right? So that, versus the old paper format, we see about a 48% increase in completion, just because they're immediately put into that system to answer the questions. And we try and make it really simple. We only have two questions for our short form.
So then they get kicked right back into their enrollment experience. It's super seamless. And then we can send that decision directly into the platform and say, yes, they were approved, or they're pending, or whatever it is, in real time. And that usually can update all the way back to the payroll. So it updates the ben admin system, shows they've been approved or whatever the status is in real time. It's up to date, like within, I don't know, five minutes or something, I think is our biggest lag.
And it feeds all the way back to payroll. So as soon as that is approved, it gets deducted. And HR didn't have to go in and put in, okay, this was approved, and now I have to go in and make their deduction change. It takes all of that off their hands. And to the employee, it's fast, it's easy. They're not getting paper in the mail that they don't know what it's about, or they don't even open, frankly. And they don't even know what the status is, because they're not getting that.
And it's just a really cool process. And cool is kind of a fun word to use here, but I just see this — if we can open up all of those experiences to be similar, it just really modernizes the insurance and the way that we play in the space. And I think that we'll get there with all the other things. They're just more complicated. So I mentioned earlier that it's a more simple transaction, but you've got to start somewhere, right? So I call it a big win on the upfront. And when we see those completion rates and approval rates, that's huge.
Ansel: I always forget, these things seem small and incremental, but the fact that you apply this at scale, it really adds up, right? And I think that's what is unique, especially with Prudential, is that you're doing this across thousands, hundreds of thousands of lives in the long term. And so there's a lot of value in reducing the amount of hours every single employer, every employee has to push into these tiny little pieces that it's death by a thousand cuts otherwise, right? And the goal is to eliminate that, eliminate friction and get to the point where it's like, hey, this works exactly how it's supposed to, and I shouldn't have to worry about, hey, did this get updated here? Did the HR person miss it and put the wrong number in? These are types of things that no one at this point should be thinking about. And it's really exciting to see how that's starting to play out, one use case at a time.
Sherri: Absolutely. And that's really key there. What you said is, things can get missed and maybe not updated timely, and that's not a good experience. So just improving that customer experience, improving the HR experience is so key.
[15:00]
Ansel: Yeah. And so when you're looking at this whole benefits infrastructure, I know you've mentioned there's quite a lot of other pieces that are very complex that you'd love to start to innovate on. But when you look at the cost for all of that, it flows across the entire ecosystem. I guess from where you sit, who's expected to bear the cost of some of these new solutions in today's environment? Is it just on the carriers, employers, platforms, or is there some sort of combination that you think is going to maybe even out, so that everyone's contributing to making this experience better across the whole?
Sherri: Yeah, I do think that today those costs are shared from the platform to the carrier and to the employer to some degree. But in the last probably two to three years, I feel like there's been a bigger push back to the carriers to pay for the development — whether it's for the development of the technology, for them to front the cost of developing APIs. Groups are expecting tech credits to help them offset their cost for the technology. That all seems to come from the carriers today, which ultimately gets added to the rates. And so it just kind of becomes a circle, right? We're all paying for it in some way, a little bit here and there, I guess.
But it is an interesting situation, because again, 20, 25 years ago, we didn't really have these things. So we didn't have these conversations over who's going to pay for it. And I think there's been a challenge of where is that right place? Employers think technology shouldn't — they're already paying for a platform to do the experience on, they shouldn't have to pay extra to use all of the technology there, which is understandable.
And I think we just have to be careful about not letting those costs get out of control, because it just drives up insurance rates. And unfortunately, then that really impacts the downstream, right, which is the employee. And we don't want to see that happen, or people maybe choosing not to insure because of the cost. So I think it's a balance that we all have to be really mindful about.
Ansel: Yeah, it's definitely a fine line. And your job is to figure out which investments are worth that incremental cost across the ecosystem that'll eventually bear out much better outcomes, right? And which ones maybe aren't. And so I do want to know, on your side, I'm sure you see a lot of different things out there and there's a lot of excitement. But I'm curious if there's maybe a specific area of benefits technology where you're seeing a lot of hype right now, but you're still trying to figure out how is this going to reliably or sustainably drive benefits? Are there any solutions or areas that we should be paying attention to that are not quite there yet, but maybe on the precipice?
[17:52]
Sherri: Well, I guess I would use plan build APIs as my answer here. And there's been a lot of hype in the last couple of years about, everybody wants plan build APIs. We have one, and I'm not sure it's the best solution, frankly. I mean, it's a solution, it's moving in the right direction of a solution, right? But I think it's still got a long way to go to get to the right answer.
Now, in fairness, enrollment data — we've been exchanging enrollment data for 20 plus years, right? We have a lot of experience with it. It took a long time to work that out. Didn't happen overnight. So plan build will be similar, I think. And right now, what we're hearing a lot in market, which I find really fascinating and I think is a great opportunity for maybe plan build APIs to not necessarily be the end game, is plan build via AI.
So I really see that as a better overall solution, where you can upload documents to a system and it can read those documents — like the sold plan proposal, the rate sheets, things like that — and pull all that information out of there and build those plans. I think that's going to end up being — this is my prediction — a better solution overall than a plan build API, because it's just wrought with challenges around timing. With plan build API, it's on the carrier to get those plans in their system to be able to send them over and build them in another system. And then there's always that maintenance factor, where you're constantly trying to maintain those plans in a timely manner before open enrollment begins, and things like that, when the rates change. It's kind of a timing challenge that we've never really had to deal with before, because we weren't trying to transact that data.
So I think that one is, I would say, in its toddler phase. And maybe we're seeing that it's throwing a little bit of a temper tantrum, because everybody thought it was going to work great, but maybe it's not as great as we thought it was going to be. But I think we're going to see things like that that are going to come and maybe go, and find better solutions in things like AI.
I also think there's a lot of caution about using AI, and making sure that we're doing so in all of the most responsible ways. And I think that's a big fear, especially because of the type of data we deal with. I think it's going to take a while. I think it's going to be a slow move in some ways — not as slow as APIs, but I think it's going to take some time. But I think you're going to start with smaller use cases, like we did with EOI for API, and then you go from there and just expand and grow that idea. So, just my general thoughts on AI: I think there's going to be a lot of opportunity though across this ecosystem, between payroll or a payroll platform or benefit administration platforms, and of course, carrier platforms.
Ansel: Yeah, I definitely agree. And I think especially for really regulated industries, you do want them to take it in measured phases. Because if we were to all of a sudden have agents just approving claims, all of a sudden that changes the entire game here. And that's a very dangerous can of worms to open.
So with this, I have one final question that I do give everyone at the end. Given all these changes, and maybe even thinking about the last 10, 15 years, how much your job has changed — how do you think your job is going to shift in the next five years with all the shifts in innovation around you today?
[21:23]
Sherri: Yeah, again, I think the shift is going to be really trying to figure out where it makes sense to have APIs and where to partner. And then how can we blend AI in, and where does that make the most sense? I think that's going to be our biggest challenge. Along with, there's going to be so much development in the API world right now. Right now it's just about a handful of platforms. I think a much higher number of platforms are going to be ready to exchange data via API over those next five years.
And it's really trying to create that strategy and that roadmap, and standardizing that stuff as much as possible. It's got to be — like in the EDI world, I mean, it was like the wild, wild west, right? Everybody was doing their own thing. Everybody was creating their own files. None of it made any sense. You'd go from one carrier to the next, it was like a whole new thing as a ben admin platform. And so I feel like with APIs, we've really got to try and rein it in and focus on these standards that are hitting the industry, so that we can be consistent and repeatable and not have to build something from new every single time.
But I think for my job, I think it's going to shift from relationship management, which is where I've been focused the last few years. And this year my role is already shifting more to how do we activate? How do we operationalize? How do we maintain these things once we build them?
Because the big misconception about APIs, in my opinion, is that they solve all the problems, right? Like all the problems go away when you send the data via API. What I would say is true is all it really does is move bad data faster, or uncover data problems you didn't know you had, unfortunately. And then you've got to be able to have people to solve those. I mean, AI can't solve those problems. You still have to have humans in the mix. So I think it becomes a different data management challenge.
Ansel: Yeah, that makes a lot of sense. I really like how you're putting it — first it's accessing it, making it standardized, cleaner. And then once you have it, it's like, what do you do with this? And how do you make sure that you're doing the right things with it? You're being responsible and you're driving that end customer value. And I think sometimes you don't know what you don't know, and then all of a sudden you see it all and you're like, no, we have to redesign a lot.
But it's pretty exciting though to be in a job where it continues to evolve. You're going to be at the forefront of this and you're really building that foundation for AI, right? Because without good data, AI can't do its job. And so I think there's a lot of opportunity. And so I really appreciate you sharing your thoughts, some of the history of starting from EDI all the way to API and whatever is in the future. But really appreciate you taking the time. So thanks a lot, Sherri, for joining us.
Sherri: Absolutely. Thanks for having me.
