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If you had to build a life insurance company from scratch today, would you design it the way your current systems work?
Most executives already know the answer. Yet we continue investing in multi-year modernization programs that barely touch the customer experience. Meanwhile, digital-first insurers like Ethos are on track to become top-five U.S. term providers by 2025.
The answer isn't rebuilding your ship. It's launching a speedboat—a strategy I discovered while studying how European banks solved this exact problem.
What Banking's Revolution Taught Me
During the Open Banking initiative in London, I watched established banks face our identical challenge: how to compete with digital natives while dragging legacy systems behind them. Their solution was ingenious—they launched "speedboats," independent digital ventures that operated outside their core systems.
ABN AMRO's New10 turned two-week loan approvals into 15-minute decisions. Money in two days. NPS above 60. They didn't transform their entire bank—they built something new alongside it.
The pattern became clear: banks that gave their speedboats genuine independence while leveraging parent capital and compliance infrastructure succeeded. Those that tangled their ventures in mothership processes watched them sink.
What Exactly Is a Speedboat?
A speedboat is your answer to the innovator's dilemma: a separate entity with its own tech stack, team, and metrics that can move at startup speed while leveraging your licenses, capital, and compliance infrastructure. It's not a pilot project or innovation lab—it's a real business with P&L accountability, just free from legacy system constraints.
Insurance's $102 Million Moment
Here's why insurance needs this even more urgently than banks did: 42% of American adults say they need more life insurance—that's 102 million people (LIMRA 2024). Even more telling: 44% of Gen Z and 50% of millennials intend to purchase within the year.
These aren't your traditional buyers. They expect to research, compare, and buy life insurance like they buy everything else—digitally, instantly, transparently. They won't navigate your legacy processes to figure it out.
Early Insurance Movers Show the Path
Some insurers already get it. Haven Life proved the tech worked before folding—but its platform now powers MassMutual's digital business. Ladder thrives by staying laser-focused on flexible term coverage. The pattern is clear: speedboats that fail fast still deliver innovation your core business can't
Your Speedboat Blueprint
After studying both banking and insurance ventures, here's what separates success from failure:
- Pick One Fight Not "let's digitize insurance" but "let's own term life for gig workers" or "become the go-to indexed annuity platform for RIAs." Focus wins.
- Own the Complete Journey No handoffs to the mothership. Control quote-to-claim for life, illustration-to-surrender for annuities. The customer never sees the seams.
- Build for Tomorrow API-first, cloud-native architecture. Table stakes, not innovation.
- Measure Differently Forget first-year premiums. Track launch velocity, NPS, and customer acquisition cost.
- Operate With True Independence Separate culture, location, tech stack. The mothership provides capital, licenses, and reinsurance. Everything else happens outside the firewall.
The Risk Reality
"But what about compliance? What about cannibalization? What if distributors see this as competition?"
Banking faced these same fears. The winners realized speedboats actually strengthen the mothership. Smart speedboats complement, not compete. They capture segments your traditional distribution won't touch—think micro-policies for gig workers or embedded insurance in apps. Or they become innovation labs that build tools your distributors have been begging for.
The risk of experimenting is far less than the risk of standing still. A speedboat requires limited capital and provides invaluable learning even if it "fails." McKinsey shows successful digital ventures can reduce operational expenses by 40% while improving customer experience.
The real risk? Watching digital natives capture those 102 million underinsured Americans while you're in year three of your core modernization.
Your 90-Day Action Plan
1. Pick one specific fight - A new product for a defined segment or a digital distribution model for an existing product
2. Build a hybrid team - External digital leader paired with internal volunteers hungry for change
3. Operate with bounded autonomy - Independent decisions within clear guardrails for risk, compliance, and capital
4. Track new metrics - Customer NPS, time-to-issue, and acquisition cost matter more than Year 1 premiums
Banking learned this lesson and emerged stronger. Insurance can learn it better and move faster.
Those 44% of Gen Z who want life insurance. They won't wait for your 2029 transformation.
