Legal & General navigates tech transformation for life insurance

November 20, 2023 6:30 AM

Legal and General America headquarters — Legal and General America's corporate headquarters, 3275 Bennett Creek Avenue, Frederick, Maryland.

Artificial intelligence advances are nothing new for Legal & General America (LGA), the U.S. life insurance business of the U.K.-based global financial services company Legal & General. LGA began building a new business platform starting in 2018 by reimagining its sales and onboarding processes for policyholders. LGA plans to continue these technology updates, including AI applications, for other operational functions. Digital Insurance spoke with Brooke Vemuri, vice president of business transformation and engineering at LGA.

How does LGA apply AI and machine learning technology to its customer service?

Brooke Vemuri of Legal & General — Brooke Vemuri, vice president, business transformation and engineering at Legal & General.

It has enabled us to do leading innovations around machine learning and AI, which is really giving customers an automated decision as much as possible.

Our focus at LGA is to protect more American lives and to close the protection gap in the U.S. That translates into how quick and easy we can make the life insurance process for people to obtain life insurance at a rate that fits their budget and meets their needs. To do that, we enabled a lot of new capabilities around AI and ML, to be able to make those underwriting decisions as quickly as possible, reduce the amount of intrusive evidence that we get, like an exam where we need to do a blood and urine draw. That's been some of the success stories out of the innovations that we've been doing at LGA.

What challenges have adopting this technology presented?

There's a couple things. Around legacy, we still have quite a bit of legacy applications in our ecosystem, primarily on the policy administration side. The next two years will definitely be focused on how do we modernize our legacy. What do we need to do versus what is nice to have and focusing on what is required to ensure that we can continue to grow and support more sales volumes. That's been our focus and will be our focus for the next two years. From a digital perspective, some of the challenges there were always going to be about data – data quality and data protection.

From an AI and ML perspective, it's all about data quality, traceability and understanding the data that's being used, that we're going to leverage to make decisions. Ultimately, the technology is one thing, but the information used to make those decisions is what's going to be critical. That's on the forefront for the near future.

How is Legal & General managing increasing volumes of data and information?

We moved everything to the cloud. Our data warehouse, data lakes, everything. We've been growing out our data warehouse and data capabilities for the last two years, which has been really good in terms of timing, but getting that cloud-based and allowing us to leverage the new capabilities, the vendors that are out there – Databricks and others – to organize our data has been extremely valuable and a fantastic investment from LGA's perspective. That's probably critical to be able to support the volumes of data that we need.

Consultants project that the amount of processing needed to support AI and ML in the future is going to be astronomical. Most people will not have a choice other than to be cloud-based and be able to speak cloud-agnostic to the extent that's needed, or to support that volume of business.

How is LGA approaching large language models (LLMs) or Gen AI?

Everybody's probably trying to solve that problem right now. Our parent company is Legal & General in the U.K. They're leading that initiative for the group around governance and controls in how we think about and deploy AI technology tools.

So that's underway, and I expect that we will put some structure around how we do that, how we analyze it and how we improve those. But we're also working on correlating our use cases, because a big concern is going to be how many different people within the group are trying to solve the same problem. Then can we solve it one time and deploy that everywhere. You're going to see both of those things going on. You're going to see how we control what comes into our ecosystem, how we get comfortable with it. Secondly, how we make sure we're efficient at how we deploy it.

The acceleration of an interest in AI is going to be a differentiator for a lot of people if they know how to use it.

What else is LGA watching in insurtech?

In insurtech, the thing to watch out for is around analytical AI and generative AI in terms of the best way to deploy them for life insurance. Specifically, we have a lot of room to go for improving customer experience, and a lot of room to go around operational efficiency. You're going to see a lot of generative AI in those spaces. In analytical AI, we're going to see more improvement in the way we're deploying products and pricing.

From a life insurance perspective, we still underwrite based on an underwriting class. You're either a preferred risk or a standard risk. We set our pricing based on that. I imagine what's coming our way with these new technologies is going to allow us to slot people within a rate that's not necessarily tied to a structure like an underwriting class. That's going to be the thing to watch for in the next year or two. Everyone's going to get a unique product and price. We can be a lot more flexible about what we're offering, because we can do a better job of making sure that we know who the customer is, and dialing up that application process so we can get really good about the products we're able to offer them.

Do economic factors, like inflation or anything else, figure into how you accomplish that?

Inflation is probably not as much on the technology side, but definitely on the pricing side. We're going to be watching what's going on in the marketplace, understanding what it takes. We like to be a top low-price carrier. We try to stay in the top of our panel, number one and number two rated all the time. Definitely economics impacts that, but we will always monitor the market to ensure we can stay competitive and keep our first and second place rankings.