Made by Distribution, for Distribution — How AmeriLife's Actuary Builds Products That Actually Sell

Paul Tyler (00:03) Hi, this is Paul Tyler and welcome to another episode of the L&A Hub. Today we have a great guest, somebody I've known for a number of years in different roles and different capacities, Mr. Ryan Hinchey. Ryan, welcome.

Ryan Hinchey (00:19) Thank you, Paul. It's a pleasure to be on.

Paul Tyler (00:21) Yeah. Well, okay. Start with the first question I ask just everybody. Who are you? And tell us what do you do?

Ryan Hinchey (00:29) Well, I have a non-traditional role and a non-traditional background. So let me tell you a little bit about myself. So today I serve as Senior Vice President of Product Innovation at AmeriLife, one of the largest distribution companies across annuities, life, and health products in the country. I am an actuary that runs a team of actuaries amongst a sea of distribution people.

And so I build products and I draw on my background as an actuary, but I didn't always start in product development. But my unique path I think really filled in a set of skills to allow me to interact with distribution, think about how to sell and market products, as well as the engineering that brings products like annuities together. So I started my career at Hartford Life, and this was going back to 2002. And in those days, Hartford Life was the number one seller of variable annuities. There's no RILAs, there's no fixed index annuities, but variable annuities were the product. And I was there when we launched the first variable annuity with a guaranteed withdrawal benefit. And so it sold like gangbusters to the point where we ran out of reinsurance capacity and we said we need to manage this risk in-house. So we put together a team to build out hedging programs around these products. And I was one of many people that got to build this from the ground up. And so that's really where I started my journey in the insurance world.

I had the opportunity as a fresh college student to have a roommate that worked on the product development side. And every day driving home, we'd kind of share what we're working on. And I got more and more interested in the product development side. So, as actuaries, you go through an exam process, and when I got through that, I was in the Hartford, Connecticut area. Beautiful place to raise a family, but that was not where I was in life at that time. So I said, I need to see something different. And I looked at either warm weather in California or something outside the company in Europe. And so I made the decision that I'm gonna look at the European route, and I joined Milliman. At the time they said, "We're gonna open an office in Europe. Are you in?" I said, well, where exactly is it gonna be open? "We don't know, but do you want the job?" And I said, you know what? Let's go for it.

Ryan Hinchey (02:52) And as things turned out, we opened up an office in Amsterdam around the corner from the Anne Frank house. It was a great experience. Really getting to take some of the learnings of variable annuities and the guarantees and kind of exporting them into Europe as well as the product development that goes with that.

Paul Tyler (03:01) Ha ha ha.

Ryan Hinchey (03:22) Eventually I made my way back to the US, and at that time I was trying to figure out what was the next step in my journey. I did independent consulting, but there was something, an itch that I had that was really around how do we explain annuity products in a simple way. And so I partnered with a couple friends in the industry, actuaries and engineers, and we basically took a lot of these actuary models that are very sophisticated, show cash flows of how annuities work, but we wanted to have a front end that an end consumer or a producer could look at and really kind of get like, okay, there's a hundred-page prospectus, just break it down, product A, product B, how would they perform so I can make an educated decision and understand them? So that's what we did.

Both with a website as well as brochures that kind of laid out, hey, these are the five things that you need to understand, the good and the bad in simple terms. And through that journey, it really—I went through a set of questions. Well, how do you explain complex quantitative concepts in simple terms to people who are not actuaries? And so I really dialed into experts in different spaces, like design thinking of teaching you to have empathy and put yourself in the customers' shoes, looking at some great designers, like at the time Mint.com was this amazing software and really studied the designer and how they put that together. Edward Tufte, a Yale professor. And like in all of this, I'm a continuous learner. And these were things that I incorporated in my thought process of not just having the financial engineering, but a simple way to explain these products.

So that was a really interesting experience for me. Eventually I made my way back to Europe and I was with what was once ING and had a lot of interesting roles there. But the one that stood out was that we had a Spain business unit and the head of product development was going on maternity leave for seven months. And so the CEO of Spain reached out to me and asked if I wanted to jump in for that time period. And I thought, that's amazing. I'd love to.

Ryan Hinchey (05:40) So I get there, some of my colleagues start by asking, "Hey, what are you gonna do in August?" And what do you mean? And so I thought they were playing a joke on me at first, but just about everyone takes the month of August off. And so I go to my wife, I'm like, I guess we're taking August off. And so we look to travel, we went to a couple islands, Ibiza, Mallorca, Formentera. And for me, I'm always on thinking about product development. And so I had about a month with a clear head to design this amazing, at least in my mind, modular solution that was easy to explain.

And when we get back into the office in Spain, I share it with a lot of people. I'm getting some positive feedback until I get to our IT department. And I don't speak much Spanish, their English isn't great. And so as the translator's going through it, I hear words like "loco," like—is he calling me crazy? And this is kinda—you can have the best intentions, great ideas, but if your IT team is not set up to kind of handle this, it can be a major roadblock. And they were on mainframe systems and this was, you know, going back over ten years ago, and I'd like to say the world has changed, but I think you know as well as I do—

Paul Tyler (06:47) Ha.

Ryan Hinchey (07:08) There's still carriers that are living with this legacy software. So I realized at that point it's really important when we're building products to understand kind of who can keep up with the times and who's going to be unfortunately a drag and limit the innovation. So eventually after my time in Europe, I saw this opportunity with an insurtech in Silicon Valley.

And for me, this was a dream job in many ways. You know, you read about Silicon Valley and the innovation going on there from the outside, and they were looking for a chief actuary. And so I applied. I got to spend a lot of time with their leadership team, and eventually they brought me in. And so they immediately throw me into the gauntlet. Every day it kind of felt like I was doing the impossible.

And it started off with a premise that in the term life insurance world, underwriting is kind of treating some people less fairly than others. And they were really focused on what we call the health conscious audience. And so these are people, cyclists, swimmers, yogis, anyone that's living a lifestyle that is healthy and therefore we could prove out that they are on average going to have a longer life expectancy. However, this is not an attribute that was taken into account in underwriting at that time. And so it was my role to—we called it putting together a mortality table for the health conscious based on a lot of different data that we had gathered, as well as looking at peer-reviewed medical research and just making a bulletproof case that we could take to reinsurers and then carriers to build products and take in a unique form of underwriting that proves out that you are health conscious and therefore you should get lower rates.

And so if you ever heard an ad that was something along the lines of, "Can you run an eight-minute mile? You deserve better rates on life insurance." That was us. And so it really hit this niche market that they're kind of like, yeah, I work hard—

Paul Tyler (09:15) I saw—I got those ads. They were great. They were great.

Ryan Hinchey (09:27) I put in this time and we were trying to tap into that, like, yeah, you deserve something special. And that really resonated with this audience. And so over the years, we were able to build out a suite of products, and my KPIs around this were always you need to have the lowest rates in the market X percent of the time. And then it became let's go—it's not five percent lower rates are not enough, let's go ten percent. And so it was continuously trying to reinvent how we do this while maintaining a good process, maintaining a good sales story and all of that, because these pieces all need to come together.

And we were the distributor through a call center during this process. Eventually we got into the Medicare world and this was I think one of the neatest forms of innovation that I was a part of there was, in Medicare Advantage, you need to understand who the person's doctors are, what medications they're on, and it helps if you have a little glimpse of their health profile. And we found that you could design the best products in the world, but if the process has a hiccup, all bets are off.

And in this case, over the phone, you have a 20-something talking to a 60-something person, and they're trying to exchange this information. The senior may not remember all of their prescriptions. The 20-year-old may not understand the prescriptions. And so there was something being lost there. And we said, you know what? We have all these data connections from the life insurance world. What if instead of spending 30 minutes trying to figure out those prescriptions, we just simplify it to say, "Can I get your permission to pull your medical records?" And by getting yes—and there's obviously a legal consent that needs to be read—this all of a sudden just populates a dashboard for the salesperson in real time saying, okay, this is the top product for you in your geography. It's got six of the seven doctors you've seen in the last five years. It's got all the prescriptions, lower prices than anyone else. And based on your utilization of healthcare, this is going to be the lowest cost product for you out of pocket.

Ryan Hinchey (11:50) And that results in much better persistency, the carriers are happier with us, and ultimately the customer is getting the product that's going to save them money. And so that was a really cool piece of software. It's now owned by one of the largest Medicare Advantage players in the space. But I would just kind of look back at my time at Health IQ is always pushing the envelope and asking, like, why are things done this way? Does that really make sense? Can we do things better?

And we had some failures along the way. We had a lot of successes as well. But I think the people that I got to work with during my time there, I learned so much from. And so eventually, I made my way then to AmeriLife where here I am, I'm running a product development actuarial team spanning across annuities, life, and health products.

Paul Tyler (12:45) Okay, we have a lot to unpack here. Let me go back a few steps. Now I think we met when you were at Health IQ doing this work, and I think just what you just said about the medical—asking the permission, that's brilliant. Were you able to get—if I gave you my permission on the phone, were you able to ping the prescription database that quick and get the answer back?

Ryan Hinchey (12:48) Ha ha.

Ryan Hinchey (13:09) Yeah, I mean all this had to work in real time because you're on the phone with someone and you know they're gonna get bored if you're letting them sit for five minutes. So I mean you do see some of this with term insurance today if you're buying online and things like that. So this can go fairly fast and that was really what we needed to happen. You could still kind of skip around to say like, okay, well, we need to get this background information around your address or whatever. So we did have some filler questions that needed to get done, but ultimately, this had to happen in real time.

Paul Tyler (13:49) Yeah. Well, you know, I had an interesting foray in the Medicare business as well. But it was one where we kept getting pulled and pulled deeper. You know, if the product went out we said, okay, we don't even have to—we said, "Paul, we don't have to market this at all. We're just gonna give the product and other people are gonna do the marketing." Said, okay. Said, "By the way, now we need the market material after we've been in the market."

Ryan Hinchey (13:53) Yeah.

Paul Tyler (14:12) So I think I wrote the—I think I actually—this is before ChatGPT came along, right? I wrote the brochures for our plan. "We're just gonna sell this one plan to this one—" no, now we've gotta sell this next plan to this next group. So we kinda backed my way into that space. I wish I'd known a little more. But it is interesting when you ask that question, you say, "Why are we doing it this way we're doing it?" And sometimes you find these crazy answers, right, that are based on reasons, things that—facts and situations that are fifty years old. And that's why we're doing it today.

Ryan Hinchey (14:50) Yeah. Yep. Yep. And that's why, with all the new blood coming into the insurance world, I think it's pushing everyone. And if you look at the annuity market, there's a couple success stories recently. And part of it is driven by asking those questions, having better processes, having better technology. So the incumbents are looking at this and saying, "You know what, we better get our act together." And they're now fixing some of their technology, but at the same time they'll be fast followers for any of these processes that are showing that these are the new norms.

Paul Tyler (15:28) Yeah. So now it's interesting. I think you're unique to actuaries, but I also think—and I've talked to a few people out like who are leading edge—and I'll tell you there are a handful of you've got who share the same attributes and we'll kind of come back to this. Like 'cause I see the—God, there's some actuaries out there who are just leaping on this AI. We'll get to AI, okay, and who are starting to put this together. I put you in this class.

Maybe you talk about what product actually was and what it is. You mentioned process. Now wait a second, the product guy's talking about process. What now? Okay, if I'm selling high volume, final expense, everybody was talking process, process, process. Do you think that's changing? Do you think process is going to be more part of the product going forward across all categories, or is it kind of gonna be the same as it has? High volume process important, bigger cases, not so much.

Ryan Hinchey (16:31) I think it's gotta change across the board. Now I think there's a different bar depending on what type of product you're talking about, as you mentioned. Certainly final expense and things like that. These are products that look for quick transactions, want to close the deal, lower ticket sales. So that's really an opportunity to compete.

I think when you look at more sophisticated products, there's a thoroughness that needs to be there as well. But I think each step of the way, you want to make sure the process is the best it can be. And that's really one of the differentiators as we think about a lot of the products are becoming more commoditized. And that's partly true, and maybe it's commoditized on some of the design elements, but certainly on the process side, the user experience, whether you're talking about the end customer or working backwards from there, you have your producer, you have your IMO marketer, you have the wholesaler, and really thinking about what are they going through.

And I hear firsthand all the time, "I will not sell this product because I had this bad experience." And there's just so many products in market today that you can be that picky and not really lose out on too much. So I think product or process is really going to continue to drive sales and innovation. And along with that it's speed. No one wants to wait months to get a process completed when they're going through underwriting, when they're going through a replacement business on an annuity. Like things need to be quick and you can look into the data. The faster the turnaround, the more likely that sale is going to go in force.

Paul Tyler (18:27) Yeah, okay. Totally agree. Yeah, listen, I probably wouldn't be at Zinnia if I didn't believe this. And I think it's gonna change—I think it's gonna be important going into the future.

Ryan Hinchey (18:34) Yeah.

Paul Tyler (18:52) The other part I wanna just pull a little bit on before we move more into what you're focused on today is bringing forward looking data into an industry that's primarily looking at the rearview mirror. So for people who don't know this business, and I've—right, I'm sure you've had a lot of people come in and say, "I've got this great thing and it's gonna change—the mortality's gonna be so much better." And I say, "Well, great, but do you have a reinsurer who has the data who can go to the state and say, yes, this is—we've got plausible data that will support this conclusion."

You did that at Health IQ, okay. You basically said, "Here's—we don't have six years worth of data," I believe. Okay. Tell me, if you were gonna do this again, like what would you do differently? If you've got—you see a product with an idea and you think these people are gonna end up with better outcomes because of a new drug, new treatment or whatever.

Ryan Hinchey (19:30) Yeah.

Paul Tyler (19:47) What would you apply from what you learned at the Health IQ experience?

Ryan Hinchey (19:52) Yeah, I mean there was certainly a windy road that we took before we found the right solution. And I think some of the key takeaways that I had was, first we would go to carriers, and this is in the context of term insurance, and they would be like, "Okay, that sounds great." And there's a lot more skeptical that like, "I don't believe you, this is how we do things." But the ones that are intrigued, their first questions of, "Okay, well, what reinsurers are gonna back this?"

And for term insurance, a lot of the business is reinsured. And so that's kind of one thing. First, get the reinsurers on board first, and then put together like a team that you can go out jointly, especially if you're a brand new entity and no one knows who you are, but if they know who these large reinsurance companies are, they're gonna take you a lot more seriously.

And for us, we had the story around: okay, we have better claims experience. We have reinsurers that are gonna take just about as much risk as you're willing to give to them. And we have distribution. And so it's kind of having this trifecta was really key to our story. And if you don't have distribution, it's kind of like, well, okay, it's a great idea, but now we need to train people to sell it. And that can still work, but you need to at least come up with a solution for that up front.

So I think that's kind of one big piece of it. And something else along the way that we found out was okay, as I'm getting pushed, like, "Hey, we have a 5% lower rate in the market today, that's not enough." And so there's other avenues that if you truly believe in your science, then you can get into more sophisticated arrangements. And we had a reinsurance captive. It takes some time to put together and all of that, but when you're able to say, "Hey, we're willing to put skin in the game," that changes the conversation significantly. And all of a sudden they're like, okay, you're not just trying to sell us an idea. You believe in this idea that you'll take some risk alongside with us.

Ryan Hinchey (22:17) And I think the last thing I'd say is that, sometimes we would look at the landscape of insurance carriers and we're like, okay, we gotta go after all the companies that have big skyscrapers and everyone knows their name. And that would be the dream in some ways, but they are just these large organizations that take a lot of time to navigate, and often they're not the first movers when it comes to a partner like this.

Now, some of that's changed. I think some of them have gotten wiser and more into new concepts, but for us at the time, we were going after the wrong partners first. And so we found that when we kind of went one level down, instead of like the biggest top five, top ten, into that next kind of mid-tier, these are nimble companies. They're looking for growth, and quite frankly, the level of growth that we can offer to them, all of a sudden that's a lot more meaningful.

We would talk about term insurance in the neighborhood of giving them 10 million more in production. And for a big player, they're like, okay, I'm not sure the juice is worth the squeeze here, but someone who's doing twenty million a year, they're like, wow, this is a nice avenue to really grow my business.

Paul Tyler (23:24) Yeah. Yeah, well that's great. Okay. Let's talk about today. So you're a product development person, head of product development inside a distribution company. So tell us what—how does that work?

Ryan Hinchey (23:36) Yeah, so I think it's important to understand kind of like some of the challenges carriers face in the industry today and then how we can help them with those challenges. So I spend a lot of my time in the annuity world, and within annuities it's really focused on the IMO channel, but we do play in just about all the channels out there. And so when you look at the annuity world, you're hearing these great headlines like, "Hey, we're breaking records year after year." Carriers are high-fiving each other, really excited about it.

But after that excitement dies down, then the reality hits that, "Well that's great, but we still need to grow our business next year by X amount." And so then you're starting to scratch your head and say like, huh, how do I break another record or get there?

And when you kind of look into what's going on in the marketplace, there's a little bit more behind the scenes that makes it challenging. So LIMRA had a conference in April that I participated in, and one of the themes was that yes, we're breaking records, but then when you kind of net out the premiums that are new premiums versus replacement activity, we're kind of growing at a fairly flat or marginal rate. And so then it's kind of, well, if this replacement game kind of slows down a little, we need some new ideas.

And so that's where our team can step in and say, "Well, here, we represent one of the largest distributors of insurance and annuity products in the country. And we offer a couple different models that you can really grow with AmeriLife."

Ryan Hinchey (25:56) And to talk about kind of our three models, these are going to be different for each carrier and what they're comfortable with, what their goals are. So the three models that we use, we have one model that we call exclusive. And that means that we'll build a product with a carrier, and only the AmeriLife family can sell that product.

And one of the benefits to that is that at the IMO level, it's crazy going on in the recruiting agencies into your downline and there's a lot of competition. And one part of the story that our IMOs really love to tell is that if you join our downline, you're gonna get access to exclusive products you can't find elsewhere. And these are products that are made by distribution for distribution. And so that's something that gets me really excited. As soon as they join, they're like, okay, I wanna get access to these products. And then on my side, I wanna meet as many people as I can, get that feedback, and if they have an idea or a need, let's partner up and build that together.

Now that's the exclusive angle. There's a second similar angle that we call leverage. So AmeriLife affiliates are the only ones that get access to the top line of a contract in the hierarchy, but they can recruit other IMOs below them that are from non-AmeriLife organizations. And we find this model works very well with carriers that are brand new to the space. And we've been able to execute on this multiple times to really take a carrier that no one has heard of and then run a playbook where we're gonna really market their name, get them out there with one product on the MYGA side. And then kind of slowly as we kick the tires, make sure they're ready for the growth, kind of build up a suite of FIA products and go from there.

And so that's also a really nice model that we're doing a little bit more hands-on, kind of not just my team on the actuarial side, but the marketing side and some of our distribution that really knows this playbook inside and out.

Ryan Hinchey (28:13) And then the third model, we call it proprietary, and that's using our group as more of a product development shop. We are going to help design, build the product, but we will be a silent partner. And no one is really gonna know we're involved in the product development. And that's important for a certain set of carriers that just—they don't want to be perceived as picking sides. They want to have everyone access the product, but they appreciate some of the expertise that we can bring to the table with that.

So depending on the type of carrier, they'll see one of those options to make the most sense for them. And then we can talk about okay, well, what are your goals over the next year, the next couple years? And let's build together a product. And it always starts with: okay, what is the category or the subcategory we're gonna play in? Let's establish some ground rules. And for us, we'll say, okay, we need a distribution strategy. This is the IMO, or maybe a couple IMOs that we're gonna bring in from the very beginning to help co-design the product and it's gonna be their baby as much as it is ours. And so that's really how we drive success for our carrier partners as well as AmeriLife.

Paul Tyler (28:54) Yeah, well, we had Michelle Gordon on from Exonic earlier. So yeah—there are dots here between the guests on the show here. It's really—listen, it's a powerful formula. When we—when I was involved in sort of the acquisition of F&G this was back in 2011. That was our—Ryan, that was our formula was bringing in IMOs. We—every, I think it was like once a week or once a month we'd have some group coming in pitching product and marketing concepts to us.

Ryan Hinchey (28:58) Mm-hmm.

Ryan Hinchey (29:04) Ha ha ha.

Paul Tyler (29:16) And honestly the ideas were great. They were good ideas and I think it's—I've seen some companies design, the home office knows everything, creates the products, but I usually find that if you can actually talk to distributors, they actually have ideas that are pretty powerful and they're willing to put their distribution strength on the table, which is enormous. So like I'm just curious, like what's the volume of products that are coming through one of those pipelines in a given year for AmeriLife? Like what does that funnel look like? How many ideas come in? Roughly how many ideas come out at the end of the year that are greenlit in some form?

Ryan Hinchey (30:15) Yeah, well, it's about having the right process in place. And I think as you touched on, like being an actual distribution team inside of a large sales organization, for me, I'm just that much closer to the end consumer or sets of consumers that I need to serve. And so that gives me more access to these people and be able to tap into them and hear what they're seeing in the market, what challenges they're running against, kind of what products do they like, do they have ideas, their unmet needs, and all of that.

And one of the things—there's a paradigm that is data, information, knowledge, wisdom. And this is something that has stuck with me through the years. And so in case you're not familiar, it's like, data is a spreadsheet of raw information. Let's say as an example, this is annuity sales data by year. And then information is like connecting, understanding something within the data. I see that from mid-22 till today annuity sales has spiked. Okay, so now I'm starting to understand that raw data source.

And then knowledge is really looking at relationships and saying in this sense, when interest rates rose so did annuity sales rise. And then that last layer of wisdom is then kind of knowing what to do about that. And so, as a product developer and someone talking with others that are close to their clients, if I add a premium bonus that is going to cover the surrender charges of an existing policy and still offer a better product, better crediting rates, I can really expand my sales opportunity.

Ryan Hinchey (32:38) And so it's kind of through this four-step process. And that's great. Some of this is just industry data that you can kind of put the story together, but really there's kind of two parts to it that I think put me in a unique position. There's also bringing in a broader set of data that you only get by having these conversations with the front lines and really understanding kind of okay, what's driving sales or—ha, I thought this product was good, but why aren't you selling it or this and that?

And then there's things that you can't find on Wink or AnnuityRateWatch, and it's well, you had an issue with their servicing, or you tried a replacement and they declined it, but the rules weren't clear, things took too long. And it's like, okay, well, let me bring a lot of this into my process.

And then as I'm going down that hierarchy of getting to wisdom—I mean, these producers, these marketers have so much insights to the marketplace that they're telling me the wisdom piece more than I am. And it's my job to make sure I'm just kind of extracting as much data as I can and having these conversations to know that like we're drawing the right conclusions and therefore giving the products that really check all the boxes they want. And it's as much as kind of getting some of the features right as well as kind of limiting it so there's not too much going on and at the same time getting those process elements right as well.

So, coming back to like how many ideas and products we build—I think there's a lot going on throughout this funnel. And it's really important that it's not about quantity but about quality. And that's gotta align with our carrier partner. They have their timelines and when they're available to build new products, when it makes sense. And also with our distribution, because we hear that it is becoming a very crowded product space. So we don't want to kind of build products just for the sake of adding that 300th fixed index annuity. We want to make sure it's adding value, doing something different. And only when we have this all lining up, that's when we roll that product out.

Paul Tyler (34:27) Okay, so in the last three months, where'd the best idea come from? Was it a carrier? Was it an agent? Was it somebody who was running a downline shop? I mean—

Ryan Hinchey (34:36) Ha ha. Yeah, okay. I mean that's a great question. I think there's a lot of great ideas on the IMO marketer side, and these are people within the AmeriLife family that I'm constantly interacting with, and they have a unique point of view because they have their agency downlines that they're talking to on a daily basis, answering questions. And though the agency and the producer is going to ask them like—

Paul Tyler (34:52) Right.

Ryan Hinchey (35:08) "Here's a client, which product should I recommend to them? What's the right one?" And then they're also seeing the broader landscape of products, they know there's other products, and being able to compare them all and say this one lines up best for this consumer. And then from there, they're always, "Hey, this is what's missing," or "This is kind of the thing on the process side that's not there."

And quite frankly, more and more of that feedback is on the process side. So when I go into any new carrier, I need to make sure like—there's especially with brand new carriers that are coming, PE-backed, and they want to do things their way. And I just need to represent my distribution in a way to say, like, "No, I know you can build it your own way, and that's great. But you need to be where the distribution is. They already have processes, they already have systems that they use. And they need to make sure they can check on the status of cases and all these pieces. And if you're trying to do something that's too different, they're just gonna say, 'Forget about this is more work, not less work for me.' So I'm not gonna bother with this product."

So I think those are some of the learnings that are really most relevant today.

Paul Tyler (36:26) Yeah, okay, so I'm not gonna let you off the hook here. So hey, I—you just—you love the idea I just gave to you, Ryan. How do you pressure test it and what does it get greenlit? Like, is it like, hey, it's gotta sell X amount of millions of dollars or it's gotta help us recruit this particular set of producers? What's the calculus? What's the process?

Ryan Hinchey (36:34) Yep.

Ryan Hinchey (36:48) Yeah. That's a great question. So I think the highlights are you have to be a student of the industry, you have to be very detail oriented. And then I'll give you an answer, but it's starting with like first understanding if you look at the top selling products like—what are driving those sales? What are those attributes?

And there's something on the data science side called a correlation funnel that I really like. And it's really, okay, so your dependent variable of sales and then your independent variables are all these components of it to understand like really what are the ones that are most correlated with something that results in higher sales. And you can start to tease out certain themes and maybe some of this comes second nature to those in the market, but that's certainly part of like—you could go with a bold crazy different idea and quite frankly I don't have a good process to necessarily test that except for having a lot of conversations and even people are like, "Yeah it sounds interesting but you don't really know till you put it in market." So I think there's a time and a place for those bold ideas but there's still a lot of opportunity for using more of the scientific process let's say.

Paul Tyler (38:15) Okay.

Ryan Hinchey (38:35) And so, you kinda wanna understand, okay, what drives sales? What do producers and marketers look for and what do they not look for? And so that's kind of the first piece of it. And then one of the things that I do very early on in the process—so I call it a product blueprint. And this is just meant to get at a few core questions and it's really putting the end in mind. Like there's all this actual engineering that is gonna go on behind the scenes, but we don't want our IMOs or marketers, our producers or the end client have to think about any of that.

So what do they care about? What is going on in that conversation for the end consumer and the producer and then back up a level, the IMO marketer and the producer, and like, okay, what's the sales pitch? What's the target audience? Why is this product going to win? And for competitors, what holes are they gonna poke into it?

And so there's kind of a short set of questions around these core topics. And if you can't articulate a value proposition in simple terms early on and show where this product's gonna win, because it's gotta win somewhere—and then it's kind of like, okay, well, let's go back to the drawing board or throw this idea out. But that's really the starting point.

Ryan Hinchey (40:55) And then once we have an answer that—I need to go around convince myself, but also convince our different IMO partners, like, okay, does this resonate with you? And each IMO has a different way that they sell products. Some of them are going to say, like, "I only look at this level of AM Best rating," or "These are a core set of five or seven carriers I sell." Others are gonna be a bit broader and have different things. "I want new indices or stories around that." Other ones just want more benchmark indices.

And so I need to know who is gonna sell this and then making sure everything resonates with them. And then from there it's the process where we iterate. We then kind of go more into pricing mode and that's where you realize, okay, I need to make some tough decisions, some trade-offs. And at that time then it's like fine, I can't have my S&P cap at this level or premium but—and that's where we need to iterate and then look at the competitive landscape and where do we want to position this product.

And as much as we can get away from those commoditized features and have a story that resonates or something different, that creates a lot of value for us, for the carrier and everyone involved. So you're not just kind of trying to one up each other and have to readjust the product. But it's through this set of steps of understanding the market, articulating the story early on, and then building that out and having something that is going to compete well is kind of the broad process that we use. And it's not done in isolation. There's got to be a lot of people involved weighing in on that.

Paul Tyler (41:16) Okay, have to ask this. How is AI helping you in this?

Ryan Hinchey (41:20) Well yeah, I'm glad you asked that. I am an AI enthusiast and since ChatGPT I've been trying to learn as much as I could hands-on to utilize AI. So there's a couple examples I could give. I think one of the broad strokes around how anyone can use AI is thinking about processes that you go through and what are things that add value and are repetitive? And maybe they're tedious and you don't like doing them. And those are great candidates for AI. So it's a lot of components of automation.

And so in my product development process, when I am studying other products in the market that do well—and I really want to understand, like, sure, I can look at the data, these are the facts, the features, all of that. But what really is gonna be helpful is if I could hear a great wholesaler or salesperson in their own words articulate like why they love this product, what is the pitch, and how do they convince people that this is the right product to sell. And a lot of that information lives on YouTube.

So I watch videos, but there's so much information and there's only so much time. But a better way is kind of having AI go find those types of videos, extract the transcripts, and then you have a set of information that you're telling AI, "I want to know again, what are the selling points, what are the objections." And there's a list of things that are gonna inform me that this is how someone in the field sells that product. And I could bring it back and understand, okay, this is really the story behind the story.

Ryan Hinchey (43:36) And so this can be applied to different angles. Is there other things, complaints about servicing for a carrier or other processes? There's certain newer carriers that are great on the process side and understanding like, well, why is that? And I have the conversations, but there's a lot of information out there on the internet that you can get as well. So it's really kind of a data collection process of this unorganized data in different mediums and then being able to bring it back in a structured way that I can just use more effectively in my process. So I think that's one example of it.

I will tell you as well that I'm a coder at heart and so AI has changed I think what coding means to me. And it's less about kind of typing. And I use voice to instruct it on what I'm building. And as one example, one product I was working on, we were waiting on a compliance department to green light if we can talk about this new portfolio approach that we're adding in a way that I thought marketed very well. And once we got the green light, I was like, okay, I need to then code in like modern portfolio theory. And this is stuff I've done in the past, but it's kind of like speaking a foreign language where you're like, I'm a little rusty on it, and the syntax and all that in coding.

And then I was like, thank goodness I can use AI to kind of—I tell it what I need it to do, and then it kind of builds it out for me. Now you gotta be careful. This is your employee, some people call it an intern, and it could be very good at that, but you need to make sure you're testing it accurately. But the story around was this—this saved me a lot of time that quite frankly in the timeline I didn't have and we were able to kind of build out a robust set of portfolios for a product that was in tune with modern portfolio theory and all of that. And there's a lot of efficiencies in AI, whether it's research, whether it's coding, whether it's something else. So I really love it, but again, at the same time, you gotta check its work.

Paul Tyler (45:31) Yeah, no, I—it's—I think to your point, I think the world is kinda opening up to us. Like, focus groups—think of how expensive those were, how hard they were to set up.

Now is this as good as a focus group or not? Like, Ryan, I actually one of the other weekends I said, I wonder if I could actually simulate an agent, an insurance agent, give three of them three different products and have them try to sell it to three different customers. And the customers were agents spun up by the LLMs. It was fascinating to read the transcripts and then see how the models behaved a little differently and how they were representing the product or not representing the product. I don't know, do you think this is—do you think this will be the future of product design development where you're just gonna say, "Okay, before we even go sell it to the agents, let's simulate this."

Ryan Hinchey (46:33) Yeah, I think that's a great idea. And I did have one of my IMO presidents, I saw him a month ago and he was telling me about something very similar. And so I look forward to kind of going deeper with him on this. But the idea I think is great, is that you have different personas, whether you want to talk about the different way agents sell or the end consumers—

Paul Tyler (46:50) Also yeah. Go ahead. Yeah.

Ryan Hinchey (46:59) And then you can evaluate ideas or depending on what direction you want to go, kind of like what are the core needs that they have, and then kind of surface that to a product or the other way around, you have a product and how well does this fit to this customer segment or producer segment? But I mean I think attacking these problems from multiple angles really opens up blind spots that you may have otherwise.

And that's honestly, like when you're trying to do so much at once, it's nice having someone else tell you, like, I could think of things like, "Well, yeah, no, that's great, but did you think about that this channel is going to require a broker dealer to approve the product? And is this going to fit within the broker dealer mold, which is going to be very different than, okay, this is an insurance-only salesperson and they are just going for these features."

And when there's so much you're trying to juggle in your mind, these are things that are like, "I'm glad you brought that to my attention now," because if I thought about this three months from now, then it's not gonna work.

Paul Tyler (48:07) Yeah. All right. Hey, well listen, I've taken a lot—we've taken a lot of your time. This is spectacular. I guess, if anybody wants to find—if anybody has a great product idea how do they find you? How do they reach out and talk to you?

Ryan Hinchey (48:18) Yes. Yeah. I mean I always love to hear product ideas. And yeah, my door's always open to talk to distribution actuaries, anyone in the space that wants to talk products. So I think the best way is just LinkedIn. My handle is just my name, Ryan Hinchey, R-Y-A-N, H-I-N-C-H-E-Y. So that would be the best way and I look forward to connecting.

Paul Tyler (48:50) All right. Hey Ryan, thanks so much for your time. And I want to thank our guests for spending time with us and be sure to give us a like or comment on whatever platform you listen to, it really helps. And of course be sure to join us next week for another great episode of the L&A Hub. Thank you very much.