Vineet Bansal, chief information and technology officer of The Mutual Group, is leading the insurtech's application of AI to its technology and operations support for mutual insurance companies. Joining the company last March, Bansal began these efforts last fall. Digital Insurance spoke with Bansal about what The Mutual Group developed for its clients, how mutual insurance companies are responding to the challenges of AI, and AI's potential for the future.
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What are the challenges or learning curves mutual insurers have when adopting AI?
The biggest challenges are not technical. AI technology is known, understood and proven. The challenges are more around data quality and change management. Governance is also important, because of cyber security and data privacy requirements. This requires overhead. Mutuals don't have teams to go through all the governance needs.
The last [challenge] is the legacy of the core environments, core infrastructure and core technology, because AI is as good as your core is. If your core is not API-enabled, and your AI is not embedded in your workflows, that is not going to work. Making sure AI is embedded in your workflow requires that your core platform is API-enabled. AI can actually interface within your workflows, both technical workflows as well as human workflows.
Are mutual insurers embracing AI?
They are not embracing it as much as they should. But they should not fear that they are already behind. Now is the right time, not two years ago. Though there are advantages to being an early entrant, the cost and risk are very high. Mutuals don't have capital and have to think of members' trust.
But as AI has proven, they have to open up. They have to feel confident about it. They have to start to make decisions, not just talk about it. Run proofs of concept and let them fail. That will highlight what challenges mutuals have. Staying current over the next year or two, they may not be as powerful as the big players, but they will not be left behind. But they have to do it strategically. They have to do it thoughtfully. They have to do it deliberately.
What should mutual insurers, including your clients, do next?
Mutuals' power comes from their localization and connection to the industry, the policyholders and the mindset of member protection. They must build their AI strategy on those foundations. Whether that mutual is a member or not a member, the philosophy is still the same. If they are our member, we have scale, we have talent, we have technology to accelerate their journey, not just on AI, but also on the technology transformation and on the core platform modernization, but they still have to modernize their core. If they're using a 20-year-old policy administration system that has data upload and download capability, but not API capabilities, they will have to do that process.
AI is not a panacea to take you out of your 20-year-old operations technology. They will have to consider partnering, but not for strategy -- because strategy should sit close to the business objective. They should own the strategy. They should own complete oversight of the partner and have skin in the game.
There has to be a strategic view on AI helping your business in 2030. Be transparent or develop and maintain transparency and accountability. While efficiency matters, don't just do things because they are more efficient, if they are not going to build the transparency and accountability, because we are insurers. We are trusted to protect people, to make them resilient. Having the right governance, whether it is AI governance or data governance – making sure there is human judgment in the loop – I always advocate for and will continue to do so.
