Key takeaways:
- Current state of the life insurance industry, incumbents, and insurtechs.
- How life insurtechs are navigating these rough waters and what to expect from the new industry in upcoming years.
- What are the most significant areas of opportunity within the industry?
Hanna Wu (00:10):
Awesome. Well, thanks so much for joining us this late this afternoon. Hopefully we are not keeping you guys from good food and drinks, but thanks for taking your time to join us today. My name is Hanna, I am founder and CEO of Amplify Life Insurance. We are a Life Insurance Savings and Investments Platform. And I will pass it over to Ben to kick off his intro.
Ben Blakeslee (00:33):
Sure. I am Ben Blakeslee. I am a Marketing Actuary, for me to agree focusing on startups and digital distribution partnerships. Not to be confused about our venture capital arm, unless you are buying drinks at the bar later, then yes, I am in venture capital and can invest in your company.
Cade Cherry (00:49):
Good afternoon. Thrilled to see we have got 19 people here at 430 interested in Life Insurance. I think that is great. Hanna, I am Cade Cherry. I am from Pacific Life Down in Orange County, responsible for Digital Distribution and Partnerships in our Life Insurance Organization and thrilled to be here with Hanna and Ben to talk to you about life insurance.
Hanna Wu (01:09):
Awesome. Well, I mean, let us kick it off. I mean, what is, what would love to hear from both of you guys on the carrier side and also on the reinsurance side, what is been most interesting as of lately? What has carriers and reinsurers really been doubling down on?
Cade Cherry (01:26):
I will go first. For us, we have really been doubling down on our underwriting experience. All of our PNC buddies that are here, they went through this journey 15 or 20 years ago, life insurance is starting to catch up, but we are really dialing into that using, trying to use data better, trying to create processes that are more efficient and more importantly trying to create turnaround times that are less than two weeks because just not consistent with what the expectations people have today. We are leaning into that heavily. And then also customer experience. How do you engage with customers, right? Magic moments, engaging with at the right time when they are interested. And then the other thing I will throw in there is we are an advisor based company. We work through independent advisors, and so we are always on the lookout for innovative tech and innovative services that advisors either want to use or expect from us because that is the best way to learn, earn their business. So that is what we do.
Ben Blakeslee (02:27):
And on the reinsurance side, risk assessment is our bread and butter. So similar to Cade, automated underwriting has been a huge area of focus for us, trying to get much faster, much more seamless to the customer. But in life insurance in the first year, we usually expect one claim for every 4,000 policies that we issue. So the margin of error for a typical algorithmic process is really, really, really thin. So important to that is having really, really good digital data in order to enable that. And that is been a big focus for us. We acquired an InsureTech called Loretto at Munich Re a little bit over a year ago. I think that is a big electronic health record provider and also paying close attention to the other digital health data in the space like prescription data, medical billing and other things. Other ones that we are looking at expanding insurability to the middle market, which it is both a distribution and a risk assessment problem.
(03:22)
It is been historically very expensive to reach the middle market. So once you get somebody in the door there, you really need an underwriting process that is likely to make a compelling offer to close the deal quickly. Another big focus for us is making insurance about more than just providing a death benefit. We have a massive financial incentive in life insurance for people to live longer and most people want to live longer. So trying to leverage life insurance as a chassis to promote that is something that we are really excited about. And lastly, a less kind of saturated space, but one that I am personally pretty interested in is all this new data we are collecting as a result of having digital processes in place, how can we use that to make the product better as well? I have seen in some data sets that people who complete their life insurance application incredibly quickly or people who put it down and then come back to it a couple days later, pretty likely to be misrepresenting.
(04:16)
I saw another data set where people who decided they did not want to disclose their email address when they were doing their application had triple the mortality of people that would disclose an email address. So wow, how you use those things is pretty tricky. An interesting one in that same dataset, people with aol.com emails were not statistically worse mortality risks than anybody else. So they were not, no they were not surprising control because they are consistent people. They do not like controlled for age, but that is funny. So there is a lot of interesting data out there and new data that we are gathering, how we use it is going to be tricky and there is obviously regulatory barriers to that, but I think the opportunity's really there to do some interesting things and to make it a better product.
Hanna Wu (04:59):
Great. Awesome. Well, throwing a couple of curve balls at you guys, this is a couple of following questions to the points that you guys have discussed. Super interesting stuff. On the data side or I guess just more on the digital side in general, how do you guys think about building in-house versus working externally with InsureTechs, partnering with InsureTechs or just even acquisitions and bringing it in-house but via a third party in the beginning?
Ben Blakeslee (05:34):
Yeah, I think for us at least our expertise is risk assessment. We have a large analytics function, so we have the expertise there. We are not a great technology company. We just moved into a new office as part of the transition. They had a list of things we need to work on, and I saw on that list, somebody complained that the fax functionality was not working well in our office. Really, people are still worried about that. So to me it is always about leveraging what is our strengths and acknowledging our weaknesses. And so yeah, it is certainly people with a core competency in technology can definitely supercharge what we are able to do with our risk assessment expertise.
Cade Cherry (06:15):
Yeah, I think for us, Apple's been in the news lately and they are key to success is saying no to almost everything. I do not know if you guys saw that article last week and insurance companies, we think we can do everything. We can do everything ourselves. And I dunno how many of we are way around an insurance company, but there is actually a lot of tech in there, admin systems, commission systems, illustration systems. There is a lot of tech and insurance company and we are pretty dang good at it really. But that momentum and that confidence can lead you down some roads that are probably better served by maybe a smaller and nimbler firm. One of the things that I will say, I mentioned this in the panel I was on an hour ago. Anybody that we are working with that is small, you got to have your data stuff locked up and locked down early because we are not even going to think about working with you if that is not true. And then at the heart of us, we are a risk management organization and the data's got to be right initially or we are not going to go. And then the final thing I would say is build versus buy for maybe smaller players out there. Carriers work really slow.
(07:30)
And you are going to have to dance with a lot of people, and I will use this since it is the end of the day. You remember the scene from Batman where the joker tells Harvey Dent, you would not know what to do if you caught the car. Well, that is sometimes what will happen is an insured truck will be like, yeah, I just landed a big carrier. And it might be the worst thing that ever happened to you because it is going to be slow going. So just be prepared for that, I guess.
Hanna Wu (07:57):
Got yes, yes. I will attest that the cycle times are different, but I guess in the world of digitization versus traditional agent distribution, to your point Cade where that is an area of focus on the carrier side, where does the thought process fall in your perspective in terms of digitization, customer journey that is more digital or traditional distribution with agents? I mean I guess it is a time old. Yeah. Discussion. I think discussion. I think what we will see.
Cade Cherry (08:34):
Is the hybrid is probably what is going to win. I think we have all seen over the last five years the agent model selling life insurance is the one that works and it is the one that really helps deliver insurance to the most people. I, but that being said, agents', business models are changing carrier's, business models are changing and a lot of agents are becoming more savvy, expect more tech, maybe have national wide reach and you have got firms like Amplify who do a lot of things online, but have a really capable sales desk behind that of advisors who help their customers choose the right product and find the right features for them. And I think we are going to see more of that going forward. And we as a carrier, it is like how do we have the tech to play there and can we support the experience that those advisors want to offer? And I think that is the big thing that we have got to answer in the near future.
Ben Blakeslee (09:29):
Yeah, definitely. I think it is key to meet people where they are. There is some people that just want to go online, buy a term life policy without talking to anybody, but it is not a very big group. Life insurance policies are really complicated. Not a lot of people understand them. I am not confident having worked in the space for 11 years, that I would know exactly what is the right policy for me if I wanted to go out and buy it. So having an agent or an advisor to help you through that sale is definitely key. But that said, nobody wants to have to write out a 50 page form or go and get blood drawn necessarily either. So taking advantage of digitization there is huge also. But over time it will be interesting to see how that evolves. Obviously the agent force is getting older and not getting replaced probably at the same rate that it is retiring. So there is maybe an opportunity there to use an AI that is really good at explaining products to people or if you can find an embedded insurance application where it is really natural how life insurance is a good purchase for somebody that can start to take up more of that space in the market too.
Hanna Wu (10:34):
Yes. And both of you guys have actually mentioned legacy tech. I remember when I first started Amplify, we had to figure out how to get a fax machine. Did you really? Yes, we did. Right. Facts, right facts. And I guess out of curiosity, what were some the areas of legacy tech that you feel could be areas of opportunities for InsureTechs to come in?
Ben Blakeslee (11:05):
Yeah, legacy tech in policy admin data. It is a really hard space to innovate because the thing is we are in a country where people are pretty litigious and policy admin determines how much people get paid and how much they get charged. So it has to be perfect. It can not be 99% right or you are going to get sued. So while the opportunities to make those things more efficient and have the data more at our fingertips would be huge, what the sort of analytics you can do with that. The hurdle to getting people over onto new systems can be challenging. I think a middle ground is if people are willing to support it to focus on the new business and new systems that can promote growth without these huge overhauls where you have to do a billion control checks to make sure everything is perfectly, I think that can be a sweet spot.
Cade Cherry (11:56):
When I think about it, I think about the places mean. Yeah, admin systems, commission systems, those are complicated. I would not suggest anybody go one of those businesses, they are hard. The places where I see some opportunity are really around places where we do not have tech today that is kind of safe. We have talked to knowledge management providers, people who can deliver tools to make your employees more efficient, speech analytics, things like that that I think are places that are safer and that people are willing to try. Certainly on the data side, I mean there is firms here that we have worked with that will help us build data models and try to predict things. And if something comes to that, that is amazing, if not, okay, it was a little bit of money for an engagement and we departed as friends because there wasn't anything there to begin with. So that is kind of how I think about it.
Hanna Wu (12:57):
Yeah, absolutely. One of the things that you mentioned, Cade, is also just building this building upon the aligned incentives between life insurance and the end consumer. That is a very unique aligned incentives within the world of insurance, which is not always necessarily aligned incentives. So I think what are some of the areas of opportunities where we can capitalize on building that long-term relationship in your perspective? And would love to just hear thoughts in this space.
Cade Cherry (13:28):
Mean ultimately carriers, reinsurers advisors, regulators, we all want the same thing. We want to deliver insurance to people, we want people to have life insurance coverage. And I know a lot of agents and I very rarely meet somebody that I do not trust or that I would not do business with. There is a very small few number of people out there who give the industry a bad name and that is unfortunate. So I think for us it is continual continuing to support the good agents, the good partners that do things the way we want to do it, working with reinsurers who've got the same values as us, whereas we want to deliver a good value to our customers. And that is kind of how I think aligning incentives. And then you get into the tech and the experience we built to provide the experience that the advisor wants, be it in person or digitally or, I mean those are things that we grapple with all the time is how do we modify, adjust our spend in those areas and investments in those areas. Because for a company like ours that is been around a long time, you have got the guys and girls who are going on your trips. We do trips in life insurance industry, Hawaii, those people, some of them do not like paper, do not like digital, but you have still, you still need to work with them. And then you have got young people like you, Hanna, who want digital. So it is like you have got to balance those things.
Hanna Wu (14:54):
Yeah, very true.
Ben Blakeslee (14:57):
For us, one place where we have kind of benefited from aligned interest recently is in an agent framework where we want to write good quality. Business agents also want to write good quality business. Other commissions do not get clawed back. So we recently worked with a partner to launch an agent monitoring system where the agents that are, and it is sort of gamified. So the agents that are writing business with low lapse rates, high placement rates, low rates of misrepresentation, they get a bonus at the end of the year. The ones that are on the other end of the scale might get their commissions spread out over time instead of paid upfront or suspended or things like that. And we make it very transparent to them, here's your metrics, here's where you rank it, your agency relative to other agents, here's some tips for how you can improve and make it transparent, make it gamified, put the incentives that we both share out in front of everybody and allow them to manage to it instead of just having it be opaque.
Hanna Wu (15:56):
Absolutely. And a bit of a selfish question, as an InsureTech working with an InsureTech, what do you think are some of the most challenging aspects or if you were to look at an InsureTech partnership opportunity, what do you think both parties need to be aware of in terms of making that partnership a success?
Ben Blakeslee (16:20):
Sure. Yeah. So we actually did, at our client summit a couple months ago, we had a survey question on pretty much exactly this and the carriers responded. Number one challenge is dedicating IT resources to it. Number two, setting expectations. So on the IT resource front as an InsureTech, anything you can do to take that workload off of the carriers will really go a long way. As I said, they have a lot of legacy systems. They are used to an environment where everything has to be perfect. So the more you can do to help them along, that goes a long way in these partnerships. The other is around experience and expectations. We are trained to think something new means something risky, something that can be a lot different than what we have seen in the past. So working with perhaps a reinsurer at Munich, we have worked with over a hundred companies just within the US life insurance space. We have over a hundred million exposure lives in our last experience study. So we have seen how a lot of things can go under a lot of different methods. So bringing in the experts to speak the common language and also kind of level set how things might go, even if it is different than what the partner's done in the past can also be really important.
Cade Cherry (17:38):
For me, we are a big company, we have got a lot going on the upper management, they've got big goals to hit, big complicated problems to solve. InsureTech is something they are interested in, but it is not the thing they are interested in. And so back to what I said earlier, making sure that we all have the right expectations of how fast things are going to go, how organized we are both going to be when we interact with each other. Startups can generally be a little more agile in how they operate and some carriers do not dig that. And so making sure we are aligned on the accountabilities between each other and also in terms of the speed at which we are going to be able to go, I think is really important initially.
Hanna Wu (18:26):
Yes, I will attest to the fact that both are great partners. We happen to be partners with both Munich and Pacific Life, so definitely yes, seeing that firsthand and otherwise, I guess would love to hear your thoughts on how do you balance your point, Kate, how do you balance between longer term, longer term goals, for example, life insurance in the next 10 to 20 years and building for that versus building for the next shareholders meeting, right.
Cade Cherry (19:07):
Yeah. Well I am not sure I have a good answer to that because it is hard and you just got to have a strategy you believe in that checks the boxes for the near term and the long term. I think that is any good organization. I know Munich certainly I think run that way. They've got big goals in the future, but then there is things we got to do just because of who we are and what we stand for that we have got to do well as well, but it is really hard. I do not have an answer to that, Hanna.
Ben Blakeslee (19:34):
Yeah, I agree. You got to do both. You got to do the blocking and tackling for today and you also need to have those moonshot visions and think about what you need to accomplish that and what you need to be working towards it and having buy-in from your management team. Most life insurers and reers are pretty big companies, so if you are looking at those moonshots that aren't likely to parlay huge volumes or whatever your metric is over the next two years, just making sure that is kind of well understood. You have the right KPIs to show that it is you are building towards a goal. It can be really important there also.
Hanna Wu (20:17):
Hopefully everyone's not exhausted by this topic already, but the talk of the town is AI. I wanted to hear from both of you guys, how are you guys leveraging AI internally and are there any thoughts or plans to partner with any third party vendors to lean into that area?
Ben Blakeslee (20:38):
Yeah, sure. So in the risk assessment space, a few kind of specific places that we are looking at it is reading complex medical files. Know if you have clinical doctor's notes that they can not be easily automated but you know, can use AI to interpret it, to help inform an underwriting decision. Or if you have long files, I I have heard when I am not an underwriter, but when you have the professional athletes come in that their medical files is hundreds of pages of ankle sprain and thumb injury and things that you do not care about from a mortality perspective, but you want to read those doctor's notes if there is something you do need to know about. So having smart systems to work through that. Another one is in the context of a life insurance application. Typically we ask 20 ish questions about the background and health and we get to the end and we say, is there anything else that you think you should disclose about your health that you haven't already?
(21:31)
It is a very powerful question for us in making sure we do not miss anything, but it is very difficult to automate. We often allow people to do freeform text and you get this kind of gross, but people disclose things like athlete's foot or something that you are on the one hand glad people are honest and disclosing, but on the other it is not going to affect your life insurance in any way. But you do not want them to not get an automated decision because they are disclosing something that does not matter. So having sort of a natural language processing that can sift through that, even if you can not do it in very straightforward kind of logical rules can be really good. And the regulatory front is obviously really important here in the life insurance space too. We are a lean organization. We have in the US life space about 200 people managing a trillion dollar in force book and we have dedicated an entire team to regulatory and governance of machine learning algorithms that important to us. There is a big opportunity to work with regulators on this. I think regulators interests and ours are actually aligned on this issue, which is not always perfectly the case, but it is good news that it is. So I think if we take the time we work together, we can end up with something that is best for the customers, which is what we all want.
Cade Cherry (22:48):
For us, I mean similarly we have got using AI and underwriting various firms we work with to help us there. We try to lean heavily into OCR, we still get a lot of forms. How do you get those read more quickly? And then the part that excites me though is the power of AI for the people who work for our company. I mentioned earlier how disjointed the systems can be, how disjointed the procedures can be. Believe it or not, knowledge management's not the first thing the company wants to spend money on. And I think there is a big opportunity for industry to leverage Chat GPT or some of those things to make the frontline person's job who deals with either an advisor or a customer easier because there is a lot of a phone calls are about the same thing. A lot of phone calls do not need a lot of times taken up doing the same thing over and over. And I think that those kind of tools will really, really help us provide a better experience to our advisors and our customers. That is what I am excited to see happen.
Hanna Wu (23:58):
Absolutely. I would say one last question from me before we let the audience ask any questions that might be top of mind, but in your perspective, what do you think is the next future of life insurance look like and what is it actually going to take to get there?
Cade Cherry (24:20):
Yeah, I touched on this a little bit earlier, but I think the agent consumer model for distributing life insurance has been pretty proven. And I think it is going to be interesting to see how that evolves in terms of what do advisors demand of carriers? Are we as carriers ready to deliver that there is a proliferation of agent technologies out there, which ones are those when and are we ready to partner with them? The other thing that I think is going to be interesting is the last decade a lot of carriers have tested or have been curious about technology because maybe the executive read a Harvard Business Review article or there is some kind of shiny object and I go to conferences and I am like, yeah, but there is like a CBA behind that eventually is not there and a lot of CBAs do not pay for themselves. And what I am excited to see is I think we have kind of been through that euphoria a little bit around innovation and what our industry could do.
(25:23)
And I hope to see that we get more funding and more focus on being good at what we are expected to be good at. You know, can talk about a great customer experience, but a great website. But if it takes you a month to get your policy, I have got a joke that if I wanted to have a meeting on customer experience, I could get a hundred people there. But if I wanted to have a meeting on redesigning statements, nobody would show up even though they are kind of the same thing. And so I think getting back to what we are supposed to be good at, I think is going to be critical for our organization.
Hanna Wu (25:55):
It is true.
Ben Blakeslee (25:58):
For us, I think we are going to continue on this trajectory of faster and while maintaining accuracy and risk assessment through powerful digital tools, one of the big challenges we always face with these is we do a lot of underwriting already. So every time you add a new tool, it is on its own valuable, but is it valuable in the context of everything that we are already doing or do you already know that? So having people with large data sets sitting in the middle I think is going to become increasingly important like reinsurers to be able to say not just is this tool valuable on its own, but what value does it add in the context of what we already have? And I think that is the digital health space and the digital tools, it is on a good trajectory. I think there is probably opportunity to get you even more buy-in from some of the medical providers to make that more of a reality going forward.
(26:48)
But it is on a good trajectory ensuring more of the middle market, a huge inequality and who buys life insurance in the United States? And I think there is just too big a financial incentive for us to not solve that problem at some point, although it is been an incredibly hard one for us to get at so far. But in terms of the distribution tools, like I mentioned, we are able to use AI or embedded insurance to make that distribution more efficient along with the digital underwriting. I think that we stand a chance to make a dent there related to above having product offerings that do not just cater to the absolute healthiest cream of the crop risks. But having products that make sense for everybody in the pool is really going to help reach the middle market and improve life insurance market in the US. And last I alluded to before, helping people see the value of life insurance, not just be something that pays the death benefit when somebody dies, but too, it is a big part of future really help us .
Hanna Wu (27:52):
Absolutely. Yeah, definitely. I think there is a lot of, life insurance is almost one of the last dominoes on the insurance side for innovation. I think it is a huge area of opportunity and super excited for all of the areas that you guys have mentioned. With that, I will open it up to the crowd and if anybody has any top of mind, wow, I guess before I even finish the statement.
Audience Member 1 (28:22):
So we have a situation now where intent to purchase life insurance is at an all time high, presumably because people have been faced with mortality head on because of covid, yet we still have a hundred million Americans that make up the insurance gap. it is over $12 trillion. So what are the three top reasons why in your mind and how do we solve try to solve those?
Hanna Wu (28:48):
That is a great question.
Ben Blakeslee (28:50):
Three top reasons.
Cade Cherry (28:52):
The Biggest reason that exists I think is because of the economics. I mean, it is sad to say that, but it is small policies, current distribution models, it is just not incentivized worth it for them to go do it. And it is sad to say, but that is true. And so I think something Ben mentioned earlier, tech can help you get there, data can help you get there and drive and bend that cost curve. So it does make sense for a distributor or a carrier to really focus on that market and do it in a way that is sustainable for them. I think that is the biggest reason that we see that. Yeah, I dunno if you find that helpful or not, that is kind of my view on it.
Audience Member 2 (29:31):
Yeah, it is more, I think it is helpful.
Cade Cherry (29:35):
It is!
Audience Member 2 (29:36):
An interesting dynamic where we have all these consumers that are to purchase a product, yet we still have I think million Americans, like 1% population uninsured! Right?
Hanna Wu (29:50):
I believe. Yeah, no, something like that, absolutely. I do not know about the most recent statistic, but a couple years ago when last I checked it was I think 90, 95% of life insurance is still distributed through traditional agents. And so ultimately these agents, they are paid the upfront commission and so the incentive likely is to go up market and to sell bigger policies. So unfortunately to Ben's point, at least in my perspective, my background was a life insurance agent working in the high net worth space. And I think ultimately, unfortunately that middle market gets dropped in this incentive structure. So having, I think technology can be that bridge in terms of how can we be able to relate to that middle market and also be able to distribute differently compared to with a different incentive structure and a different connectivity to that end consumer. But I think it is a huge area of opportunity absolutely.
Audience Member 2 (31:02):
Massive education gap.
Hanna Wu (31:04):
Yes, exactly. I think it is exactly, well if you have heard of Amplify, if anybody that is looking for an opportunity along the lines, no, just kidding. But yes, that is a great question.
Audience Member 2 (31:34):
So we are with a, can you guys hear me? So we are with ABGA that focuses traditionally on nontraditional but aligning life insurance into their practice for context. And you touched on the of reorganizing the statements. We talk a lot about acquisition of customers trying to get new sales, but where are we on, I am sure this is a big deal, we have got cash value policies that you can not even understand the statement some of the advisors are gone. Or what is your view on actual enforce policy management and the data being shared externally today that would align a lot better with financial advisors?
Cade Cherry (32:24):
What do you mean by shared?
Audience Member 2 (32:26):
The ability to access it.
Hanna Wu (32:28):
In force data feeds.
Audience Member 2 (32:30):
Yeah. In force data being able to be visible.
Cade Cherry (32:32):
Yeah, that is, those are the kind of things I am thinking about. It is like, you know, guys are in the business of distribution, I presume. It is like, you know, guys clearly want to engage in and manage your policies. We need to be able to support that. And quite frankly we do. But right now it is kind of a one-off thing, but it is like how is it in a box? And I think more distribution, the really forward thinking ones are investing in the talent inside their agencies to do that. Maybe 15 years ago it is like, yeah, my nephew got a computer science degree and he's my data guy. Whereas now people are investing in that functionality because there is, there is value there. And we talk about all the time in home office, they are even face amount increases. You know, sold a policy 15 years ago and somebody can get a face amount increase. Why would an advisor not want to have that conversation? And sometimes they just do not. So to your point, that is something that we have got to get better at as an industry. I agree with you a hundred percent.
Ben Blakeslee (33:43):
And something we are definitely looking at and working on, we found and we are working with one partner who thinks we can predict 75% elapses before they happen within three months. So if you put that information in the hands of the agent, it is really powerful. Then they can go have a conversation, understand what is going on, do you need a new policy? Do you need to change your policy, work through it, rather than just on the back end figuring out seeing someone laughs and trying to figure something out from it. So part of that is having the administrative data accessible and easy to use. And so I think a lot of companies are making the investment to get to that point, but a lot are probably at a place where there is some guy in a cabin in Maine that is the only one that knows how to query this mainframe to actually get to it. Not speaking from personal experience or anything. But yeah, so fortunately, excited to see a lot of good vendors in that space here. I know from talking to a lot of insurers that a lot are really investing in that capability and I think we will see more to come there soon.
Hanna Wu (34:47):
Yeah, absolutely. It is a huge area of opportunity given that oftentimes this customer is with you for life or a good amount of their life and I think as the insurer, it is a huge area of opportunity to continue to provide value for that client and also to follow them along their journey of various different needs throughout their life as well. So I think it is just definitely an area of opportunity for sure. I think we are actually, oh, one more question. Okay. We will do one more question!
Audience Member 2 (35:22):
Really quick. So you talked about AI and then from a risk evaluation perspective, I feel like line of lagging behind in terms of adoption, like five, six years ago there were hype facial recognition as a tool to underwrite. There is so many propensity models out there besides the regulation. Is there any other barrier that you see that is preventing this adoption?
Ben Blakeslee (36:01):
Yeah, I would say it is probably two things. One is our need for accuracy and life insurance. This I said our expectation one claim for 4,000 people. So we have to be really, really precise in everything we do requires a lot of validation upfront and it is the long duration nature of life insurance contracts does not lend itself as well to experimentation when you are on the hook with that risk for 50 years as opposed to some other spaces. So I think that is sort of naturally led to us lagging behind a little bit, but it is no shortage of awareness in the need to innovate in underwriting and make it better. So I am optimistic we will get there, but I think realistically we are always probably going to lag other industries that get more real time, have maybe a little bit more margin and we are not on the hook for so long.
Cade Cherry (36:52):
And I think one of the barriers is just training data. And that is where a company Munich's great to work with because they've got more data than we as a carrier do. But yeah, facial recognition might be great, but I do not have the facial recognition of the last 200,000 applications I did to train that against. Right. And I think that is part of the challenge is the training data to build the confidence you need to roll something out like that.
Hanna Wu (37:20):
Absolutely. Well again, thank you guys all for joining us. Hopefully this has been a helpful session, but we won't keep you away from drinks and food any longer. But thank you so much.