Key Takeaways:
- The role of AI: what it will and won't replace with respect to talent
- How do I identify the right use cases for AI?
- What are the pitfalls I need to avoid?
Katie Mockler (00:11):
All right. It would be great if you would not mind coming a little bit closer if that is possible. We are going to be a small group, but interactive group with two amazing gentlemen. Alright, let us get started. So we are looking at how AI can help you find and keep quality talent. I am going to have the gentlemen introduce themselves and we go from here. Thank you.
David Daniels (00:43):
I will go ahead and kick it off. My name is David Daniels. I am an Executive Vice President and Director of Product Development and Innovation with MiniCo Insurance Agency. MiniCo is part of Gen Cap Group. Gen Cap as a whole is writing about two and a half billion dollars in annual written premium. We have program business and we have brokerage business and we have binding authority. So what you are going to hear from me is more from the program business perspective. And with that Jeff.
Jeff Tyler (01:24):
Hi everyone. I am Jeff Tyler. I am the Head of Engineering Product and Data Science at Insurance Quantified 4 billion notice, two signature is quantified. And we are the providers of an Underwriting Workbench Solution and we have been partnered with Gen Cap and MiniCo in implementing our underwriting workbench for a variety of programs in their business and expanding into the body of authority business as well. My background is been, I mean I have been with Insurance Quantified for six years, but before that I have been in Financial Solution Development with Bloomberg for the 12 proceeding years. Today we want to talk a little bit about Technology, AI, how these types of solutions should be viewed and how they could be used to bring in new talent to drive quality talent into your organizations. How to retain that talent. I think Dave is an expert at this and will provide a lot of really interesting anecdotes, but one of the things I think to kick off with and it is kind of apropos from all the conversations we have heard here at the conference so far is that AI and machine learning and all of these other terms that are on your bingo cards somewhere on the tables, these are tools.
(02:49)
They are tools and there are tools to enable people. And I think that one of the things that I personally really believe having spent 20 plus years now dealing with these technologies in a variety of forums, in a variety of venues is finding the ways to compliment and enhance human activities and really not diminishing them, not trying to replace them. And I think it is really important that we talk about it in this sense and not the sense of how do we replace everything. It is kind of a misnomer and it actually distracts from the reality of what we are trying to do in the insurance industry. So just to kind of kick it off, I think that it is a good place to start with Dave kind of talking a little bit about how people typically react in the insurance company space, whether it is in a Carrier, whether it is in a Program Administrator, when you are trying to introduce new technology, especially the kinds of technologies that are emerging now.
David Daniels (03:52):
Great question. I think from my perspective when I was introduced to it, I am really excited about this advanced technology and I have been doing program business for over 30 years. I have been associated with underwriting for almost 40 years. So there is that initial excitement. There is also a little bit of skepticism, which I think for people who have been in this industry a long time and seen other IT projects and not meeting the goals that they were intended for, I think that is a reality we have to deal with. I think the other thing is the proliferation of data. It can be overwhelming at times and so we are spending time teaching and educating the underwriters and the underwriting staff on how best to utilize that information. I guess maybe a good way to frame it is when we had a new underwriter start with us, her prior carrier really had not done much in this space.
(05:18)
So when we brought her in and showed her the demo of it, I think she was really excited. You could see it on her face and when we showed her the tools that are available, not what is going to be available but what is actually available real time, the fact that she could point and click and get all sorts of data and analytics on her desk so she can manage her desktop and then she can manage a book of business and get really good insights into that without waiting for Excel spreadsheets to be prepared. I do not care if you outsource it or do it internal, but underwriters really should not be spending their time on that. And I think the other important thing, and Jeff touched upon it, is the fact that we are involving them in the process. Not in just building it but improving it. And I think they really appreciate that as users because the end product obviously we want to meet their needs. That is how I would characterize it.
Jeff Tyler (06:28):
Absolutely, and I think that this kind of leads to another point which is you have the people who expect this, the people who you are hiring who expect better technology, but you also have people who have lived without it and believe that they should be able to live without it. I heard we have an advisor who once told a story about how the way they got them to have stop having paper binders was to stop allowing them to procure binders. So how do you get people who are used to doing business the traditional way, comfortable with taking on these sorts of things, clearly involving them in the process as part of it. But what we found sometimes people are resistant. How do you get them involved? How do you get them to be comfortable and want to be involved in that product?
David Daniels (07:17):
The way I would approach it is similar to the way or the way that we approached it was similar to the way we approached outsourcing a lot of the work that the underwriters and the staff supporting them were doing. So 15 plus years ago is when we started outsourcing a lot of those tasks. And the best way that we felt to do that was first as a management team, go out and see the product, talk to a user of it, get the good, the bad, and the ugly, and then come back and communicate that to your staff. I am a huge communication fan, I am a huge transparency fan and I think when you explain it as it is going to take away a lot of the work, the processing, move it to where at that time it was better suited so that they could focus on the more valuable things in their job underwriting, more profitable business, growing their book, developing and working on their agency relationships.
(08:26)
So I think it is showing it to them, as simple as that might sound, I think you really need to spend time with them as users and get their input and let them be part of the process. I think Deepa, the CIO from Hartford made a comment about stakeholders, well our underwriters and underwriting staff are stakeholders in, so the system is being built around what is most important to them to do their job. And then the last piece I would say is the training and education of it. We need to show them how to use these tools to get the most out of from.
Jeff Tyler (09:11):
Great. I mean I think that we have seen people, there are people that do get excited once you get them deeply involved in that process. And it is something there are always going to be some people who resist before the next generation. We are talking a lot of the things we talk about involving people being involved in the process and it is not just technology need to have the next generation of people coming up that want to be Underwriters, that want to be Underwriting Ops, that want to Lead Programs that want to do all of these things and how do we use this as a lever? How do we inspire people? I think that one of the things I found is how people find that if they could write more. One of the best quotes I have ever got was about the product was like I am actually writing more business. And it was from a fairly young Underwriter saying, I am actually writing more business than everyone around me. I am trying to get them to do it, they won't do this, but now they are a standout. And I think that this is a way, this is a lever we could be using to attract talent into the industry, not just from outside people who are in university. How do you bring those people in, get them excited and how do you use technology as a lever?
David Daniels (10:29):
The first and most prominent thought that comes into my mind and people who have been around me while I have been working on this initiative is I tell them it is going to revolutionize the way we underwrite the business and manage the business. And I truly believe that because I was fortunate enough to start with a company, this was back in the early to mid eighties that had some really advanced technology. Well I do not think most people get into the insurance industry on purpose necessarily. They have a finance background, maybe a sales and marketing background, operations claims. And so underwriting attracts a lot of those people into that field. Plus underwriting has so many areas in which to advance. You have got program business with all of these specialty programs, with all of these lines of business and coverages, they can go into binding authority business. So it gives them avenues for advancement and promotion.
(11:42)
And I think it is also explaining and showing to them it is a different and better way to do their job. I think first and foremost, for those people that Jeff described coming in, I think we have all experienced this and that is answering the question, what is in it for me? So we spend time on that. We explain to them what is in it for them and how They are going to benefit. So I know the word fun is rarely associated with underwriting, but I can honestly say that I find it fun Now, it took 20 to 30 years to get back to that, but it is fun because I can spend more time developing and working my agency relationships. you are going to hear that a lot from me because that is a component no matter how much AI we bring into our industry, I believe there is always got to be a human in the loop, underwriting, verifying data, all of that,
Jeff Tyler (13:03):
Especially in complex lines and specialty lines. I mean you are going to have situations where the UBIT, you can not remove the UBIT from the equation. It is really about equipping them with the tools that they need to make those sorts of decisions. I think that you are in a specifically interesting case, the UBIT in the program business a very long time before dinosaurs, we will call it, before it became trendy in a sense to be calling yourself an MGA. So MGA is sitting in a really interesting place in the ecosystem. There is kind of this existential aspect of them where
David Daniels (13:43):
We are in a great place.
Jeff Tyler (13:45):
Your distribution on one end, your paper on the other, and you are managing all of that and basically things change very quickly. you are able to like adapt to change and you also have to adapt to change. So Dave, I would love you to talk a little bit about that, a little bit about how that sort of existential situation drives the way you adopt this sort of technology. How you see it playing out and how you see it impacting the people in the job.
David Daniels (14:17):
Well, I think it was Jack Welch who made the comment change or die. And that is so true in our business and I am a big proponent obviously with this type of technology, I think it does not just hit the insurance industry, it is everywhere. And we read about it everywhere. So I think that drives a lot of interest into it, but it is significantly changing the way we do business and I view it as a huge competitive advantage for us. So it is not only competitive for hiring talent, but it is also makes us competitive for retaining talent. Nobody wants to work, and I am going to date myself here with an Atari system when they want the latest and greatest PlayStation, they do not want an iPhone six, they want an iPhone 14. So I think the expectation for people coming in, especially the young generation, your Gen zers and millennials, they make up a large portion of the workforce.
(15:37)
So I think you have to appeal to them. I think it is also game changing. The importance of underwriting I do not think has changed, but the tools we are giving them are better. The other thing I want to mention is I am a big believer in controlling the narrative. And what I mean by that is with this type of technology that we have now, we are able to better manage our books of business, make better decisions, more write more profitable business. And so I always felt as a Program Manager, the best way to work and manage my program was to be two steps ahead of the carriers that we worked with. And one of the ways to do that is to really know your program. And the best way to know that is from analytics. Unfortunately, prior to this initiative, we had spreadsheets. We were getting information, it was not very timely, but by the time we got it, at least we had it.
(16:50)
I spent a lot of time doing spreadsheets. Where it really came in handy is when your program is performing well then that opens up opportunities for you to write more business with your carrier partner, whether it be additional states, additional programs, additional lines of business. It also gives you the opportunity to look at the business you did not. And for me, since I am in product development and new programs, I want to see that business. It is nice to see the business we wrote, but of all that business that comes in that we ingest, I get to see what we did not write, whether it was declined, why it was declined if we quoted it and we did not write it, why. And I can see whether there are opportunities for a new program or whether that business since Gen cap has three divisions, if you will, whether that business can fit and stay within the gen cap organization. So for me and the underwriters, like I said earlier, it is a game changer. It it is going to really differentiate us in the marketplace.
Jeff Tyler (18:19):
I think that the best next place to go for everyone based off what you just said is where do you want to see it next? So you are talking about where it is now. We have been working together on this for a while. I am obviously very excited about where it is going. I think that we are starting to be able to ride a bit of a trend here that people are willing to talk about these sorts of technologies that stuff much more readily now to the point where I think people are starting to believe that it is easy, not no, it is not. So sometimes on the surface it could seem easy, but I think that what we are seeing is a much more active interest to adopt these sorts of changes, to be able to leverage the latest models, the latest technology to do this. How do you know, see it galvanizing people on the ground at gen cap, where do you want this to go next? Where would you like to see the trends take the program administration business, the broader gen cap business?
David Daniels (19:28):
I mean, great question. And it is almost like
Jeff Tyler (19:31):
You plant it.
David Daniels (19:31):
Yeah, well it kind of go for me goes back to the what attracts me most in this initiative and that is being involved in it. So it is also getting the underwriters involved, the stakeholders. I also believe strongly in keeping humans in the loop to verify the data to make sure it is accurate. I believe AI can mimic humor behavior, but it cannot create it. And AI is not in my opinion, going to change how we interact with our agencies as far as those relationships, those personal relationships. We used to have a saying in our office and that was pick up the phone. A lot of people have gotten used to emailing and communicating that way because it is easy, quick, you can hide behind it, especially if it is bad news. Well we were trained to do the opposite and that is pick up the phone, especially when it is a difficult situation, a declination ad news.
(20:48)
In doing that, it allows you to develop your relation relationships with your agency partners even more. So again, it is that human in the loop. It is getting a more complete sub submission. So one of the exciting things that is happening right now in this initiative is when we get a submission, it is ingested digitally. You have all of this information right at your fingertips. It has intelligence obviously built into it to help kind of decide is this something that qualifies? So an underwriter is not spending a ton of time there. Is it also something maybe that is a carrier referral because it has certain authorities that are exceeded. Well, those things will significantly cut down the underwriter processing time, if you will, and analysis time and put them in a position to spend their time where it is most valuable. I said it earlier and I am going to keep saying it.
(21:56)
That is developing agency relationships in our business. And I think that is what is so exciting about program administration, MGAs, MGUs, is that you get to develop those agency relationships and spend time with them. I have relationships that date back to the early eighties and nineties and during really difficult times. It is nice to have a group of agencies that have followed me throughout our program progression and with the ups and downs. As we all know, carriers sometimes do not want to write a program or a specific line of business, so you have got to find another partner. Having agencies that hang in there with you is really critical. So the other thing that I think it is going to really do for us, and I touched upon it earlier, is this other opportunities. I mean, that is where I want it to go. I want it to be a tool for the underwriters to make their jobs easier.
(23:01)
I used the word fun earlier. I want them to spend time, more time developing those relationships. I want them to be able to manage their books of business, get ahead of the curve. And I think the other thing that is really important is training and education. Deepa, the CIO at Hartford mentioned it. I believe Dr. Siegel mentioned it. And that is not only involving the underwriters in the process, but training and educating them on it. And just a quick, it was posed when I read it, I think more as a joke, but I am not a good person with the jokes. So I am going to flip it to kind of like a story. So that story goes to underwriting managers after they have met with Jeff and his team and they know the company's made a significant investment in this and They are talking about their concerns of time, resources, and capital that is been invested in this and the training that is going to be required.
(24:19)
And so the first underwriting manager says, what if we spend all of this time training them and all of this resource and capital and they leave? I think some of us have been in that dilemma. So the other underwriting manager ponders that says, good point. What if we do not provide them the training and education and they stay? That really rang a bell for me because unfortunately that is what happens a lot. That was kind of the distant past current Now we are spending that time together as partners, working with the underwriters and getting them involved in the process, building it, improving it, getting feedback loops, having humans involved on the outside insurance. Quantified is a great partner in helping us do this, but also they help us with educating the staff on how to use it.
Jeff Tyler (25:31):
And it has been a great partnership. And I think that one of the things that we found is that by providing the tools in an easy to use way, it gets you halfway there,
David Daniels (25:45):
Point and click. I mean, I know that sounds really simplified, but when you see the product, I can point and click. I mean I tested it for two and a half days and I was amazed at how quickly we get information. But I could pick anything and it would give me really good data analytics on a particular book of business. And for me, as I mentioned earlier, that is everything that may, that is a game changer, especially when working with my carrier partners.
Jeff Tyler (26:29):
I am conscious of time. We are almost out of it. If there are any questions, obviously happy to take them now or after the session, obviously come see us we are here all day and happy to talk to anyone more about this topic and anything else really.
David Daniels (26:48):
Yeah, please do not be shy. We have a captive audience. They literally roped you in. I think so,
Jeff Tyler (26:55):
Yeah. They were very, very optimistic about how to keep people in this session.
David Daniels (27:03):
Questions, comments, suggestions? Are all of you on the insurance carrier side? Yes. No. Is anybody on the program administration MGA MGU side? No. Kind of got that feeling in earlier sessions that I have attended when they have asked that question and kind of polled the audience. Jeff and I were talking about it earlier. I think conference, the information and the technology and really benefit program administrators, MGAs and MGUs. It is really kind of been carrier focused and I understand why in a lot of respects, but I also think there is people missing that opportunity on the program administration, MGA MGU, however you want to call it. So with that, I think our time is just about up.
Jeff Tyler (28:08):
Thank you very much.
David Daniels (28:09):
Yeah, thank you for your time. Thank you Dave. Thank you, Jeff. My questions, it is been an honor and a privilege. I want to thank dig in for having us and helping us put this fireside chat without the fire on. So thank you again for your time and have a great rest of your conference.
Jeff Tyler (28:27):
Thank you everyone.
David Daniels (28:28):
Thank you.