Putting a premium on AI use to transform insurance

Artificial Intelligence (AI) is like a Swiss knife—versatile, powerful, and incredibly useful. The beauty of AI lies in its ability to shield users from its underlying complexities, while delivering human-like abilities in carrying out tasks. For enterprises, many of these backend complexities are easily handled by AWS, offering a smooth and enhanced experience.

Expanding the boundaries of insurance with AI

As technology advances, so will the capabilities of AI – transforming customer experiences across industries, including life insurance. At ICICI Prudential Life Insurance Company Limited, Karthik Kanagaraj is spearheading this transformation. “With advances in AI, our ability to integrate text, speech, video, and combining it with medical reports or data from wearables, could soon help underwriters make better informed and faster decisions,” shared Karthik, Chief Data Science and Analyst MD and CEO Office Manager at ICICI Prudential Life Insurance Company Limited. This is transformative for the life insurance industry, as underwriters carry out the vital task of assessing the risk while insuring individuals

Interestingly, Karthik, who possesses a Chemical Engineering degree from Anna University in Chennai and an MBA from IIM Bangalore, has worn multiple hats in his career of over two decades in the insurance sector. He started in sales, moved on to strategy, then finance and is now spearheading AI initiatives in the company. After college, his first job was at Colgate. Later in 2004, he moved to ICICI Prudential Life Insurance and has been there since then.

“My introduction to AI, data science, and machine learning happened in the last six years. The great thing about ICICI Prudential Life Insurance is the opportunities the organization provides by way of change in roles.” said Karthik. When he was introduced to AI, he immediately identified opportunities where it could help the company, specifically in converting data into actionable intelligence. This was especially true in areas such as customer experience, claims servicing, risk management, identification of sub-optimal business and persistency (a metric used by insurance companies to determine the number of policyholders who continue to pay premiums).

“AI helps indicate to us which customers may end up not paying the scheduled insurance premiums. It helps us reach out to them in advance and explain the importance of life insurance and the benefits they stand to lose by not paying the premiums. So, AI helps us understand which customers need guidance,” said Karthik. Another area where AI has helped is in product recommendation. Instead of shooting in the dark, sales and marketing teams are better informed, with AI helping match potential customers to products that are best suited to their needs. The benefits of using AI are evident as various teams across the organization ranging from underwriting, sales, marketing, customer support and others have witnessed increased productivity in their line of work.

Managing scale seamlessly

Importantly, customers are not exposed to any of the complexities that go behind AI models. If an ICICI Prudential Life Insurance customer requires additional support from a service perspective, that knowledge is passed on by AI to the relevant executive. “The overall acceptance for AI tools and AI interventions is quite good,” said Karthik. This comfort level is commendable particularly as ICICI Prudential Life Insurance deals with millions of policies, adding new customers, processing claims and more.

To manage the scale and intelligence in the system at ICICI Prudential Life Insurance, AWS infrastructure is the key. “Their infrastructure is our core. We use AWS SageMaker, our primary platform for model development and analyzing data. While AWS Bedrock is helping us set up generative AI use cases,” said Karthik. Data resides on Amazon S3 (Amazon Simple Storage Service), a highly scalable, durable, and secure object storage service designed for industry-leading scalability, data availability, security, and performance. AWS SageMaker, on the other hand, is a cloud-based Machine Learning (ML) platform that facilitates the creation, training, and deployment of ML models. SageMaker can also deploy ML models on embedded systems and edge devices. Bedrock is a fully managed service that offers a choice of Foundation Models (FMs) from leading AI companies like Anthropic, AI21 Labs, Meta, Stability AI and Amazon, through a single API, along with a broad set of capabilities that can be used to build generative AI applications. The company also uses AWS EC2 (Elastic Compute Cloud), which allows it to run applications on the public cloud.

AWS solutions offer performance with scale. Karthik said, “the scaling ability is already built in. For our processes, where there is a new model deployment, we don’t have to worry about thousands of policies being logged in at the same time. All the scaling up happens automatically. It removes the infrastructure worry from our minds and we can focus on our core business.” AWS, he added, also makes the customer experience uniform and well regulated.

Outside of his work in insurance, Karthik enjoys watching Hollywood movies and reading books when he gets time. James Clear’s Atomic Habits is among the books he has recently read and enjoyed. The book emphasizes the importance of small changes that can create great results over time.

Increasing human-machine interactions

In the future, Karthik sees AI assisting insurance companies in more areas, such as reducing claims processing times further or even detecting fraudulent claims. “AI in the future can also combine structured data with unstructured data and enable us to provide better customization,” said Karthik.

“Our daily habits are also changing with AI. We are already interacting with a lot of intelligence built into machines around us, like Amazon Alexa. Machines will also become more comfortable with multiple languages, similar to how people often speak by mixing both Hindi and English,” noted Karthik.

In this constantly changing tech landscape, Karthik and his team are always a step ahead thanks to a culture of continuous training, development and learning at ICICI Prudential Life Insurance. They also get support from AWS via regular updates and periodic symposiums, which helps Karthik and team understand where they, as an organization, stand in terms of new technologies and benchmarks in the industry.

In the coming years, AI will have a wider impact across users and enterprises. Experts in the field point to Singularity (when machines will match human intelligence) happening in a couple of decades. And that will have an impact in multiple ways. “AI is going to remove a lot of repetitive and mundane tasks. Some of these things may be handled entirely through automation, which will allow people to focus on more creative endeavours,” said Karthik.

The life insurance industry is already registering these changes, as all new applications are assessed by AI, which determines which policyholders should receive reminders or other communications. “Overall, in every interaction there’s increasingly an AI element at the back, like an invisible hand, which is built into customer journeys, granting them a better experience,” added Karthik.