Technology is changing every aspect of the insurance industry and AI is having a tremendous impact as customer demands and expectations change, processes become more automated and access to data helps to shape the future. We'll discuss how companies are emerging from their siloed systems, using AI and other tools to better manage data, and what AI-related factors to watch in 2025.
Taxonomy tags: AI, insurtech, innovation
Transcription
*Transcripts are generated using a combination of speech recognition software and human transcribers, and may contain errors. Please check the corresponding audio for the authoritative record.
Patti Harman (00:09):
Good afternoon and welcome to our Leaders session remaining Agile in the age of AI. I'm Patti Harman, editor in chief of Digital Insurance, and I'll be your host for today. Artificial intelligence is changing many aspects of business from managing large amounts of data to better responding to customer needs and developing new products. Its adoption in the insurance industry is allowing us and allowing carriers to become more agile as customer expectations continuously change. What does this look like and how can artificial intelligence and other technologies transform the insurance experience for agents, brokers, carriers, and customers? Joining us today to discuss this and more is Katie Kahl, the chief product Officer for iPipeline, where she focuses on product innovation. Thank you so much for joining us today, Katie.
Katie Kahl (01:09):
Thank you.
Patti Harman (01:11):
So as I said in my introduction, the adoption of AI has transformed so many aspects of many industries. Have you been surprised by how quickly it seems to have been accepted by insurance carriers and brokers and the public and their customers?
Katie Kahl (01:31):
Yeah, I think the pace of adoption of AI has been pretty fascinating to watch. So it's been one of the fastest growing technology in terms of rate of adoption for the insurance industry. And on one hand I'm not entirely surprised by the speed. Insurance is an industry that's built on data, and AI provides a lot of powerful tools to unlock that potential. So I think because carriers and brokers are seeing immediate value in using AI and it having a direct impact on their bottom line with the efficiencies and better insights they can get from it, there's a natural incentive for them to embrace the technology. What has surprised me a little bit though is how quickly AI has gained public interest. Traditionally, insurance involves a lot of human interaction and people like to feel that their unique situations are understood, and yet they've been really becoming increasingly comfortable with AI-driven recommendations, provided it's transparent and personalized. And that may be because we've got a demographic that's gotten really comfortable with AI in other areas of their life, and it's just generally embracing technology. So I guess all that said, we're still in the early innings and we haven't seen universal adoption, but overall, I think the speed of acceptance has been really exciting and promising for the industry.
Patti Harman (03:10):
I agree. When you look at how people use technology, it just permeates every aspect of our lives. And I'm wondering if AI is kind of changing customer expectations and if so, how is that, whether it's increased speed on the part of the insurance process or maybe more transparency in claims, what are you seeing?
Katie Kahl (03:34):
Yeah, absolutely. I think it's changing really expectations around faster and more transparent interactions. So things like AI-driven tools that enable real time underwriting or automated claims processing. I think that's really setting a new standard for speed and that's going to become the precedent that carriers and brokers need to follow provided they can combine that with the right transparency that customers expect. I think the other thing that we're seeing too is that consumers are becoming accustomed to really highly personalized experiences. So they expect that they're going to get a product that feels like it's tailored to them or a policy that feels like it's tailored to them and that their providers are able to be more proactive in the servicing and risk management as well.
Patti Harman (04:32):
And it goes along with just kind of reinforcing the importance of relationship. And so when you're able to tailor your services to what your policyholders need, I would think that would help strengthen it. Are there areas in the insurance ecosystem where AI is having a major effect maybe in underwriting or customer service like we said, or possibly even claims or other areas?
Katie Kahl (04:58):
Yeah, I think those are the big three again, where we're seeing really that new standard around speed. So underwriting and specifically AI can enable faster risk assessments. So something that previously took days has gotten down to minutes and even can get to seconds to provide really those instant decisions. And all of that's enabled by the right advanced data analytics that AI is able to process so quickly. The other thing around underwriting that we've seen a lot too is increasing the limits in which carriers will provide coverage without the need for a medical exam. So waiving the need for a medical exam, again, it drives that efficiency and speed through the process. Customer service, I think is where we've seen the most universal change with chat bots, virtual assistants, there's an expectation on that 24/7 support really without any human interaction. On the claim side, I think that the big thing there is faster decisions. The processing is streamlined the evaluation of those claims and no need for really the manual intervention that was once more common I think is driving a lot of that innovation. And the last one I think is really interesting too is around fraud detection. So that's an area where AI is really invaluable. It can identify patterns that humans might miss as well.
Patti Harman (06:38):
Very true. While it does make it a little bit easier for fraudsters to perpetrate, it also makes it easier to catch them. And when you were talking about chatbots and the use, I remember the first time I was on a website somewhere and a chat bot popped up, it just totally took me by surprise. And yet now that's how you communicate. If you really want immediate service or answers to your questions, that is usually the most effective way to have a conversation with whichever entity, agent or broker or even other businesses, that type of thing. Within the insurance industry, traditionally companies have siloed their operations and their departments. Is the adoption of AI changing that in any way? And if so, how?
Katie Kahl (07:26):
Yeah, in a few different ways, and I think it needs to permeate that change a bit more. So AI thrives on integrating data and being able to process large volumes of data. And if companies are too siloed and they don't have a way to combine that data across departments, they're just going to miss out on some of those insights and the type of predictive analytics tools that could benefit multiple departments too. So we talked about underwriting earlier, but that also can assist marketing teams as well. So the more they can partner and drive value together, they're going to see a lot better outcomes as a result of that. The other thing too is that the more we unify data and workflows, that helps create a better customer experience as well. So oftentimes they might have a customer that calls in to the life insurance department, but maybe they also have annuities. Now you have the ability to service them more holistically as well. So I think it'll be super important to break down those silos.
Patti Harman (08:41):
Yes, I agree. And being able to just get information more quickly, it just makes it better for everybody. And it's interesting, as I've spoken to a lot of insurance companies, one of the major areas that really excites them is the ability to use AI for customer service and to really improve that customer experience for their clients. So that's a kind of exciting thing to be seeing. One of the benefits, as you've mentioned earlier, one of the benefits with the adoption of AI is the ability to manage large amounts of data. How is it changing data management for carriers and is it providing opportunities for them to create new products and as we've talked about before, better serve their customers?
Katie Kahl (09:29):
Yeah, it's extremely valuable to be able to combine and analyze those large quantities of data. We spoke a little bit about the customer service experience, which again is the type of experience, especially that demographic younger demographics have come to expect. They're used to a one-stop shop, they don't want a separate person for tax insurance financials. They want to go to one place and get that comprehensive service. But the other aspects where there's a lot of value too, is just around the opportunities for growth. So again, breaking down those silos gives you more ability for cross-selling, for upselling, for doing the analysis on where was that successful and where wasn't it successful so you can adapt to what the market needs and how it's responding to products that carriers are putting out in the market. It's also, again, where you can enable those really personalized product recommendations and new offerings. Being able to combine not only sources from the internal carrier systems, but also publicly available data that can really help to create instant profiles of customers on the spot and find the right match for them in terms of products, just nothing that's been enabled that quickly before and more dynamically like we can do today.
Patti Harman (11:02):
Oh, that's a great way to describe that process and how you use data and collect it from different sources and that sort of thing. Why is it important for carriers to explore the use of AI in different areas of their businesses? We talked earlier about some of the different departments being siloed. Do you think it helps make them more agile in their adoption of new technologies than if they're using AI?
Katie Kahl (11:29):
Yeah, I mean I think it's going to be necessary to explore it across their organizations. If they want to stay competitive and be agile in order to respond to market needs and demands, each business function really can present a unique opportunity to drive AI. Again, whether it's reducing costs or enabling growth or where there's efficiencies, better experiences, typically you're not going to be able to really deliver on that independently with each function. They really all need to come together. And the more that carriers can integrate AI across the various functions, that's when they get that more holistic view of their operations. Where is there a drop off in the process or an inefficiency? And typically the bigger gains you'll see across departments versus in a specific area, it also can then help make better data-driven decisions that better align with broader business goals versus narrower business goals.
(12:39):
I think one way from an agility perspective that it can help is again, identifying where there might be operational bottlenecks and where they should invest in new tools or processes. And I think one of the coolest things about AI is it just enables that rapid iteration and testing of new ideas and then refining the model to make them work better. So even if you don't get it right on the first time, like the chat bots we spoke about earlier, now they're much more sophisticated, they've learned more of the responses. So just that iterative approach I think is really going to be valuable along with just automating repetitive tasks. And that really frees up resources then to focus on other strategic innovation and makes them more nimble and adaptable to any future challenges or even regulatory changes that they might need to react to.
Patti Harman (13:41):
Right. Yes, that's true. And it's funny because we're so used to having technology, I forget that AI is in some of the programs that I use and it tries to anticipate what I'm going to say. And as a writer, that is a little off-putting to me. I guess it's like, no AI, that's not what I wanted to say. I know what I wanted to say. And you have to remember that it is being trained, that it's learning how we think or how we reason or what types of repetitive tasks we do on a regular basis so that it can make it a little bit easier going forward. But it's just sometimes it's just like, well, nope, that's that's not quite right yet, you're not there. So where do you think AI's use provides the most opportunities for carriers now? There are so many different areas, I guess across the insurance ecosystem where it could be applied.
Katie Kahl (14:39):
Yeah, I mean I think it all kind of boils down to what's kind of the right ingredients for success. And it's about getting the right products to the right customers, getting them to buy those products and then servicing them so you can retain their business. So in terms of that personalization we talked about, I think that's where again, there's the ability to get the right products with the right experiences for their distribution network is that's going to be just a key driver in growth and customer satisfaction. Consumers are going to feel like they're getting the right recommended product, and that's really where advisors and agents provide the most value as that trusted advisor. Underwriting, I think is again where we can see the biggest impact to speed. And the faster those decisions come in, the more it reduces the risk of non placement. So we've seen that happen in other industries like mortgages, when you get an instant decision, you can react to that. When you don't leave the lots of the auto dealership, you're more likely to buy. So that speed we see in all aspects of life. And then the internal efficiencies too, and servicing and claims processing, I think that's where it helps a lot with retention but also helps with profitability. So I think that that combination of placing more business, getting customers the right products and then retaining them with the right servicing is where customers or carriers are going to get the most value.
Patti Harman (16:19):
I would agree. Especially because it really does matter to them to provide the best possible products and services. And that kind of leads into my next question, which is really your area of expertise, is how does the use of AI affect or encourage innovation? I mean when you're thinking about new products and the possibilities must be kind of exciting, I would think.,
Katie Kahl (16:42):
Yeah, absolutely. Especially as a product management professional, the more that you can foster innovation by reducing the time it takes to learn, that's incredibly valuable. So we touched a little bit on the ability to test and iterate on new ideas. AI enables that like we've never seen before. For instance, machine learning models can simulate scenarios and outcomes much faster than traditional methods. So that gives carriers the ability to experiment with new product designs, pricing strategies, service offerings, and test them in the market and iterate as needed. And that again, agility is incredibly valuable and just being responsive to the market.
Patti Harman (17:39):
Is there anything about the adoption of AI that maybe concerns you in terms of how it's being used across the insurance industry?
Katie Kahl (17:49):
Yeah, I mean I think that there still needs to be controls around ensuring there's not bias in AI models if it's not properly managed, it could lead to unfair pricing or exclusion. So I think that's, again, there are controls out there that can be put in place to mitigate that data. Privacy security are also, again, critical concerns that carriers need to address and make sure they're handling a lot of very, very sensitive customer information. And then I think you have to find the right balance to not have an over-reliance on AI that you risk losing, where that human touch really matters. So insensitive situations like a life insurance claim, that's not the right situation likely to introduce something virtual. You need that human touch in those situations. So again, I think as long as you can balance it, put the right controls in place, you can mitigate those concerns.
Patti Harman (18:57):
On the flip side of that, what excites you the most about its use in the insurance industry and just looking at the possibilities and looking ahead at what could be?
Katie Kahl (19:09):
Yeah, I think just having insurance be more proactive excites me, predicting risks, preventing losses. That personalization I think is going to just change the industry and likely results in what the whole industry is here for, which is to protect people's financial futures. So being able to offer more personalized products that genuinely improve the lives and the futures of the consumers that our industry serves, and again, really positions us as a more proactive partner. Speed is the other aspect of that, that you're just able to ensure and provide coverage to more people than ever were possible before as well too. I think the combination of those two things is exciting because what it means for people's, again, long-term futures,
Patti Harman (20:10):
I really like how you talked about using AI and insurance and being proactive about it because so often insurance is, we think about it as it's a consequence of when something happens and so people can see it sometimes in a negative light, that something bad has to happen for it. So to really be proactive and to help policyholders think, well, this is how you can use it proactively going forward, this is how you can use it to help plan and improve your future. And those sorts of things really kind of changes, shifts the view of how people could see and use insurance going forward. How do you see the insurance industry focusing on AI in 2025 and beyond?
Katie Kahl (20:59):
Yeah, I mean, I think we'll see broader, kind of more universal adoption from the three areas we talked about regarding underwriting and claims, that personalization and then servicing. So again, I just think we'll see that broader and those that aren't able to keep up aren't, are not going to be able to be competitive. I think where we'll start to see maybe things shift a little bit and expand is in a couple ways. One, I think there might be more emphasis on explainability and trust in AI models, and then really a shift towards integrating AI into every part of the value chain, all the way from product design to customer retention. So I think there'll be more and more use cases that will be unlocked as a result. But I think again, that transparency, that explainability, AI is also going to come into play.
Patti Harman (22:02):
It all helps with the education process and helping people understand this is what your policy says, this is what it covers, this is how you can utilize it, all of those sorts of things. It's all a part of understanding the process. And insurance. We've covered a lot over the last half hour, so is there anything that I haven't asked you that you'd like our audience to know, whether it's about staying agile when it comes to utilizing AI and using other technologies or anything else that I haven't asked you about at this point?
Katie Kahl (22:37):
I guess maybe the other two things I would mention is I think the key to agility is not just adopting AI, but you have to build the right culture around it. You have to embrace change and experimentation. And again, it needs to be broadly embraced by the entire organization. And carriers and brokers need to continuously evaluate how does AI align to their strategic goals and how can they use AI to drive those forward? And I think that staying curious is going to be key to their success to be committed because it's going to continue to evolve and continue to unlock opportunities. And if you don't hold onto that curiosity, it might limit the potential that they've got.
Patti Harman (23:29):
That's true. The industry hasn't always been known for being really quick to adopt technology, and yet when you look at what's happened since the pandemic and with the launch of, not the launch because AI has been around for a while, but the adoption of it has been very fast for this industry and for other industries as well. So it really is playing a key role across the entire kind of business enterprise, I guess I would say. So thank you so much for joining us today, Katie, and for sharing your thoughts on remaining agile in the age of AI. I also want to thank our audience for joining us today, and please join us for our next leaders session when we highlight some areas to watch in the insurance industry in 2025. I'm Patti Harman for Digital Insurance, and please enjoy the rest of your afternoon.
