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October 16, 2023

Insurers spend billions to deploy generative AI systems, departments, while keeping humans ‘in the loop’

HBJ PHOTO | STEVE LASCHEVER Dan Campany is vice president of innovation at The Hartford, which is using data from sensors to look for ways to prevent losses ranging from car accidents, worker injuries and property damage.

The impact of generative AI on insurance companies, operating in one of the most highly regulated industries, is expected to be profound, but the risk-averse industry is proceeding with caution.

Property and casualty insurer The Travelers Cos., which has a large presence in Hartford, plans to spend $1.5 billion on technology this year, much of it dedicated to research and development.

Like other insurers, it’s looking to incorporate AI into many aspects of its business, from customer service and claims processing, to underwriting.

An overarching belief among insurance executives is that while technology can’t replace humans — it requires human oversight to function — generative AI is capable of performing certain tasks more quickly and effectively than people, and it can help employees become more efficient in serving customers’ needs.

AI can accelerate the process of risk evaluation and underwriting, and can even generate and submit compliance reports, said Dan Romuald Mbanga, director of generative AI solutions at Google, keynote speaker at the Insurance Capital Summit, held Sept. 27 at The Bushnell in Hartford.

Dan Romuald Mbanga

“It’s been applied in many forms and ways that shape the industry. And generally, it really changes the game in the entire ecosystem,” said Mbanga, who works with Google DeepMind researchers and Google Cloud engineers to design and create generative AI programs.

While AI has existed for years, generative AI — which Mbanga described as using human-like capabilities to generate content — is still being developed, tested and refined.

Creating efficiencies

Insurers, which have troves of data spread across numerous departments, are using AI to help sort through and analyze that information quickly. AI can help employees perform specific queries with better speed and accuracy.

Recently, Travelers developed, and is now piloting, a generative AI claims knowledge assistant tool.

It’s trained in proprietary, technical source material that was previously only accessible in thousands of different documents.

Claims professionals use the tool to quickly access information during interactions with customers and other partners.

Also, Travelers is using an AI system that “ingests” legal complaints filed against insured parties, highlights liability and coverage issues, and even helps recommend appropriate defense counsel.

Dan Campany, vice president of innovation at The Hartford, said AI can be especially useful in gleaning insights from datasets, as long as the right guardrails are in place.

“Generative AI is not decision-making,” Campany said. “Generative AI does not state or imply logic in the same way that a human being does. What it is useful for is helping humans become more efficient. Instead of having to create content from scratch, you get a bit of a head start.”

The innovation team Campany leads takes data from sensors to look for ways to prevent losses ranging from car accidents, worker injuries and property damage.

“We capture a lot of data from those sensors, then we put it in the cloud and it’s all anonymized …,” Campany said. “And we analyze and look for trends to predict where and when (losses) will happen.”

He imagines a day when he can walk into his office in the morning and ask generative AI to answer a question, and then use the information to produce a report.

For example, he might ask how many claims the company has received during the last 24 hours in which a car crashed while traveling more than 100 mph.

“I would say, ‘Can I have the names of each of those customers, the underwriters associated with those customers and the risk engineers associated?’” Campany said. “‘And please draft emails to each of those underwriters and ask them to reach out to the agents of those customers and understand what happened, and draft a response for how they’re going to mitigate that in the future.’”

AI has an uncanny ability to modulate human style and tone, he added.

“I can say to the generative AI, ‘Hey, take my PowerPoint presentation with my project status update, convert it into a memo that will be stylized and appropriate for the CEO, and also convert it into an email that will be sent to stakeholders,’” Campany said. “I would never hit send on any of those emails before reviewing them in-depth myself, but if it can save me half an hour, or an hour, that’s a step forward.”

AI departments

Insurance call centers are already using AI to predict a caller’s demeanor based on the tone of their voice. Upset callers are automatically transferred to customer service representatives with the highest success rates in dealing with frustrated clients.

“(AI) can detect the nice people versus the angry people,” said Doug Vargo, who leads the U.S. emerging technologies practice at IT and business consulting firm CGI. “And they will then intelligently route that call to those people that are best at handling that situation.”

Generative AI goes a step further, as chatbots — trained on large language models and huge corpuses of information — emulate human responses based on previous interactions.

Many large insurers have established departments dedicated to using generative AI to fuel innovation.

Travelers has been steadily increasing its investment in AI, and this year will spend more than $1.5 billion on technology, said Alan Schnitzer, CEO of Travelers, during a recent earnings call.

“Given the competitive advantages that will come from deploying AI across the insurance value chain, and the expertise, resources and data required to get there, scale will increasingly be a differentiator in our industry,” Schnitzer said.

During the Insurance Capital Summit, Beth Maerz, senior vice president of customer, strategy and innovation at Travelers, said the company wants to use AI to create a frictionless experience for customers that makes them feel safe, secure and respected.

“You have to have a frictionless underwriting process in order to ensure great customer experience,” Maerz said. “So, first and foremost, one of the ways that we’re using artificial intelligence is to really drive change in that experience.”

AI can pull data — for example, small details about homes — that are critical to segmentation, she said.

“It turns out that images are much better at providing us with that data than words, people and databases,” Maerz said. “So, we spent quite a bit of time over the last number of years to build out capabilities to use image recognition, using external data sources on images from the sky, to understand things like roof shape.”

This is helpful to the company and customers, who may not know the type of roof they have, or the risks that come along with it.

The Hartford is also in the early stages of developing generative AI systems. While it does not yet have any in production, the excitement “goes all the way up to the C-suite,” Campany said during the Insurance Summit event.

He said The Hartford is working to set policies that ensure the processes are safe before they’re deployed.

“We run experiments in a very controlled way before we ever release anything out into the wild,” Campany said.

Overcoming AI anxiety

Andi Campbell, president of WellSpark Health, a Farmington-based provider of corporate wellness programs and subsidiary of insurer ConnectiCare, said she believes generative AI will become as commonplace in the insurance industry as computers, even though there is uncertainty about the transition.

Rather than fear the technology, she encourages employees to embrace change because the goal is for AI to help humans.

“When people come to me and say things like, ‘This is going to displace my job,’ I try to help them reframe it to, ‘Let’s talk about, instead of displacement, how do we consider how to add value in our jobs alongside technology?’”

Campbell emphasized that AI is not a substitute for human interaction.

“Our customers are coming to us, typically in times of need,” she said. “It could be a health claim, it could be a loss of a family member. These are moments of need and distress. So, in that context, we’re thinking about innovations and in blending that human touch with the benefits of efficiency that come from the technology.”

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