Zia Zaman arrived at MetLife Asia in 2014 after stints in telecommunications (Singtel), consumer electronics (LG), and enterprise technology (Sun Microsystems). He’d also worked for an Internet search startup, FAST, that was acquired by Microsoft.

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What struck him was how little the insurance industry interacted with its customers.

The reason the insurance business is “broken,” Zaman contends, is not that it hasn’t innovated. Rather, “the entire industry has…lost its way by not focusing on the customer. It was shocking to me, after working in tech for 22 years, to walk into an organization that just simply didn’t know how to define ‘customer.’ It continues to shock me that this industry, a $4.9 trillion industry, can have 1.4 core interactions with customers a year. That is just not going to survive.”

Zaman, the Chief Innovation Officer for MetLife Asia, is based in Singapore, and he reports to Chris Townsend, the President of MetLife’s Asia business. We spoke with him about the LumenLab innovation center he created; the venture-building activity that LumenLab is working on, in areas like digital health, “InsurTech,” and aging; and a startup engagement platform MetLife Asia launched called collab.

Startups Aren’t the Only Ones Innovating

Scott Anthony [of the strategy consultancy Innosight] often says to me, “50 percent of the innovation that’s happening in the world is actually coming from large organizations.” That’s not a statistically-backed number, but when you really add it all up, startups aren’t the only ones innovating.

Just simply doing incremental innovation…it’s just not for me anymore. I’m really looking at the third horizon. It’s an over-used word, disruptive, but fundamentally doing completely new things. It really is about new business model change, new distribution methods, as well as new capabilities.

What better place to land than insurance, where fundamentally, the business is broken? And it has been for decades. The reason it’s broken is not because it hasn’t innovated. It has innovated.

What the entire industry has done is it lost its way by not focusing on the customer. It was shocking to me after working in tech for 22 years to walk into an organization that just simply didn’t know how to define “customer.”It continues to shock me that this industry, a $4.9 trillion industry, can have 1.4 core interactions with customers a year. That is just not going to survive. I see lots of value leaking out of the industry.

[Insurance today] is seen as a protection product or a retirement product or a wealth product. If all you see is your products reflected in the eyes of your customers, you’re not really getting to the heart of the emotional need or the benefit. There [has been] very little customer segmentation. There’s very little true understanding of personas, customer journeys, and eventually the job to be done.

Although [my] remit may seem like it’s Asia, it’s really been more global of late. Many of the initiatives that we’ve done draw from worldwide companies, and some of the work that we’ve built has actually been sold to the US and to the Gulf and other regions [within MetLife].

At LumenLab's 2015 launch (from left): Prof. Bernard Yeung, Dean of NUS Business School; Heather Grant, High Commissioner of Canada, Zia Zaman, Chief Innovation Officer of MetLife, Asia; Jacqueline Loh, Deputy Managing Director, MAS; Chris Townsend, Presi

At LumenLab's 2015 launch (from left): Prof. Bernard Yeung, Dean of NUS Business School; Heather Grant, High Commissioner of Canada, Zia Zaman, Chief Innovation Officer of MetLife, Asia; Jacqueline Loh, Deputy Managing Director, MAS; Chris Townsend, President, Asia, MetLife; Blair Hall, Deputy Chief of Mission, US Embassy

Setting Up Lumenlab

I came on board in July 2014. We moved into our first office in February 2015. Technically, we probably consider ourselves to have begun in May 2015, which is now two years. Our office opened to the public, and our launch was in July of 2015.

Over that period of time, we also got some support from the public-private partnership of Singapore, and that support continues on today. It turned out to be a very successful aspect of our business. We’ve got about 30 people now, more or less, working at LumenLab.

We’ve probably hosted over a thousand people in our space since the beginning. One of the conditions, frankly, for me, was I would not have taken this job had it been in [MetLife’s] Asian headquarters of Hong Kong or New York. You really just can’t innovate in the headquarters of a company.

It doesn’t matter where it is, even if it’s in Silicon Valley. It’s very difficult to try to recreate or re-imagine what the business model is from within the offices of the core business, and therefore [being] sequestered and dedicated was one of the conditions for me to take the role.

What we did was we found 8,000 square feet and turned it into a lab space…In terms of signaling, not just to our employees but to our partners and to the investors, to the Monetary Authority of Singapore, and to anyone else who is interested, that we’re not your typical insurance company anymore.

Building Things in Three Areas

We chose to be a venture-builder, in conjunction with partners. So what we say is there’s lots of ways in which we can do this. We don’t believe in [corporate venture capital] as the only way. [We’re] building things that are in one of three areas…

Number one is digital health, because the flip side of life insurance is health. I don’t mean health insurance. It’s just simply, if I can get you to live longer, and to be healthier and to delay and/or reduce any healthcare expenses, then certainly it makes for a better life insurance customer.

Second, aging. We’re all living significantly longer. Radical longevity is around the corner, and therefore we need to really rethink what is the job to be done for people who are aging.

Then, finally, is “InsurTech.” How can we re-imagine what insurance could be? In Asia, sometimes we say that we’re trying to move from a what-if business — “What if it happens to you?” — to more of a “so how.” So how is a focal, beforehand expression, which basically means, “So how do I live longer? So how do I take advantage of my golden years? So how do I have a third act in my life? So how do I do gene editing?”

That [is a] change of thinking about risk as something you can’t do anything about — except just pool it and slice it up and then sell it — to something you can actually manage. I use the word “sublimate risk.” That’s the future of insurance, sublimating risk, and that can’t be done alone.

Insurance companies have a great set of distribution tools…but it needs to be done in conjunction with the rapid advances happening in healthcare through digital health, and the rapid advance that’s happening around the Internet of Things. Simply, the number of buttons and sensors that we all touch and press…in other aspects of life are starting to permeate into the risk business, and it’d be naive to think that it isn’t.

Much of what [we’re] doing is [creating] an engine. Spin up some businesses that are typical venture-like, stage-gate businesses. Some of them will fail. Some of them will succeed, and we’ll invest more and more money into making them higher-fidelity versions.

Often, we’ll work with partners to bring ideas from the west to the east, or just build them in Asia, for Asia. Over the course of the last two years now, we’ve launched probably 13 initiatives, killed four or five of them, have a few of them in-market, and have launched a corporate startup engagement program called collab.

Collab: Engaging with Market-Ready Startups

[With Colllab, we wanted to say,] “What’s a problem, or challenge, or job to be done that the business has, and try to match that with the external community with more of a light-touch approach. Let’s not call that LumenLab, let’s call that something else. So we came up with the idea of calling it collab.

[This is] a corporate startup engagement program that [is] different because it [involves] market-ready startups. So they are a bit more advanced. We researched to see where all the other [startup engagement programs] fail, and it was generally that the mentors were not involved with the business and there wasn’t a clear understanding of what the [business] challenge was.

We said, “We’re going do those two things right,” and we invited 40 people that are working at MetLife to be [champions for those startups].

The group of people who are champions — we don’t call them mentors — include people who are the ones who have the problem in the first place. It has to be. It doesn’t make any sense if the person who owns the problem isn’t the one who is seeking the solution.

Perhaps the most important thing, we needed to get the buy-in on the people who are feeling the pain to say, “I feel pain. I need help. I can’t figure this out internally. I need to look externally. Thank you for introducing me to this company. Let’s figure out whether or not it’s a fit.”

The second thing is we said, “Look, we’re really going to be very clear about the different types of challenges [we have],” and that’s what we put up on the collab website. A simple [example of a challenge] would be agent training. How do we make sure that agent training is mobile-only and engaging, and reduce the time for an agent to make his or her first sale. That’s a nice goal.

It was phenomenal. We expected 50 applicants to a 139. We expected a couple of countries in Asia, we got something like 35 countries, from places like Afghanistan, Latvia, and an amazing diversity of places.

Finally, as the program started gaining steam, we realized this has become the insurance industry’s best corporate startup engagement program today. We’re proud of that. [In March 2017], we have eight finalists that are actively working hour after hour, week after week, in preparation for a demo day. There’s so much demand that we think we’re going to do multiple collabs in different spaces after we’re done with this first one. (The winner of the first collab cycle, Uniphore, is a business focused on voice biometrics and analyzing spoken interactions. In August, collab began its second cycle, focused on the Japanese market.)

How We Reward Our Champions

Getting the right incentives in place, that’s really important. Make sure it’s part of [the champions’] review for the year.

By explicitly saying that you’re going to be a champion, it’s good for you career, it gives you exposure to startups, it’s good for your CV, it’s good for your LinkedIn profile, that’s all very good intrinsic motivation.

The extrinsic motivation is also, well, it’s going to be part of your annual review. That gives people a clear understanding that it is part of your core job to make sure that you do your best in this specific project.

How We Integrate into the Core Business

We don’t. What we’re really trying to do is match [startups with business challenges.] We have a known problem, a known challenge, and rather than make it feel like a vendor relationship, [we aim] to figure out how to test and learn about this particular solution in an experimental way, to figure out whether or not it works sub-scale, and then eventually with a larger pilot, and eventually, “Can we roll it out?”

That’s the approach that we’re going to use with each of the eight. Some of them definitely will fail, and we’re going to find that problem-solution fit just isn’t there, and that’s fine.

But the iterative, test-and-learn approach to designing an experiment which looks at whether or not this problem can be solved is the right way of thinking about it, and not integrating with the core, because that’s just going to water it down.

I don’t believe that we’re doing the right thing as corporate innovators by serving our master, the core business. We should be pushing up against the master, and saying, “Stop bothering us. We’re going to start to create the future.” That’s the only way to do it.

What Success will Mean for Collab

The monetary way of thinking about it is, if you’re going to give away at least one $100,000 prize, that’s a contract. It’s a funded contract to pay for the first experiment for one of these companies. I think success will be that…that experiment is successful, but another way of thinking about it is, how many of these [will be] successful? We don’t necessarily just need one to win. If there are more, then that would be great.

Startups only care about one thing: revenue. Having been a startup person, all I care about is revenue. I want an “at bat” with a large company. They get an at bat, and it’s up to them to figure out how to at least get a base hit. That’s the simplest way of measuring. I can’t really go downstream and say, I need these companies to actually have this kind of impact on Net Present Value. It’s more than just, “Do we give enough at bats to these companies?”

You’re always learning from other innovators

As an innovator you’re always…learning from each other, and you always know that you’re going to take a couple of steps forward, fall down, and then have to get up again.

We have the humility to know [that] we’re nowhere near getting everything right with collab or LumenLab, but you just have to try.