How life insurers use AI to improve customer service, compliance

Takeaways:

• Life insurers will use AI to generate new business, Prudential exec said
• AI can enhance presentation of information to customers
• AI can check up on life insurance advisors' and products' compliance

Life insurers are finding that AI can help them tap opportunities and serve policyholders — and support regulatory compliance.

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AI can convert a static book of business into insights and actionable engagement opportunities, according to Priya Raghunatha, vice president of digital strategy at LPL Financial, an Austin, Texas-based financial advisory firm, who spoke in a Reuters webcast in early April. By actively monitoring AI, firms can find opportunities to connect with clients and determine if their life insurance or other financial needs have changed, she explained.

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Simon Berg, chief information officer for life insurance at Prudential, speaking in the webcast, added that the practice of life insurers using AI to leverage books of business is "primed to explode in a good way."

"That book of business is in the basement and no one looks at it, but there's value there for a carrier and also for an advisor, and also for a customer," he said. "The solutions are much more attainable now, with data at your fingertips and the AI engines and the AI brains being able to pull those things out."

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Furthermore, life insurance distributors can use AI to better inform customers, as Paul Pennelli, senior vice president of direct/digital sales and marketing at SBLI, said. 

"We are trying to step into using AI as a way to allow customers to be more educated about the product that they're potentially involved in buying and be more educated around what the underwriting process is going to be for them, so that they walk into it 'eyes open,' and they understand what the expectations are in buying a life insurance product," he said.

For agents or advisors working with carriers and serving life insurance customers, AI can simplify their customer service, as Raghunatha explained. 

"It's not just about an advisor's knowledge," she said. "Now AI can say a particular client could use this type of an annuity. It can actually also enable product recommendations or comparisons — and generate a nice looking proposal where you're not looking at pages after pages of charts, but it's actually in a more human layman format, explaining what happens if you take withdrawals, or what happens if you let it lapse."

Raghunatha pointed to initiatives like the Insured Retirement Institute's APIs for applications and transactions, as an example of how life insurers could enable AI capability for their advisors.

AI can also be applied to regulatory compliance, related to proper disclosure and presentation of information to life insurance customers or policyholders. Life insurers could use AI to build regulatory compliance checks, including validating that advisors are properly licensed and have adequate training to sell certain products, Raghunatha said. 

Life insurers must understand how AI will affect their regulatory environment, according to Pennelli. "AI is going to become a major part of every discipline in all of our companies," he said.