How AI is transforming insurance

00:00 - Jennifer Kessel: I would say it's digital plus broker.

Kate Grasman: Hey, we're saving $600,000 this year.

Kristen Skender: Topend technology with a human touch and concierge level service.

Ryan Deeds: Yes, you can bring a problem. Can you bring a solution as well?

Paul Lucas: Hello everyone and welcome to the latest edition of our leaders network transformation roundtable. Now the last session established where technology is delivering real efficiency versus adding complexity. This one drills into the human and governance side. what transformation actually does to jobs, budgets, and internal oversight once the roll out is underway. And to take us through it, we welcome a brand new group. They are Kristen Skender, chief growth officer at Jimcore Agencies, Ryan Deeds, head of AI and enablement at ALKEME, Kate Grasman, Chief Information Officer at Heffernan Group, and Jennifer Kessel, chief operating officer at USG Insurance Services. Uh so to start with everyone, I'd love to know how are roles and required skill sets changing inside your organizations particularly as automation takes on more of the transactional work of course. Uh Kate, let's start with you.

01:03 - Kate Grasman: Yeah, I mean I think at Heffernan and we've been on the journey for AI for the past 3 years and I think because we started early, you know, we've been able to actually unlock the creativity and retrain our organization. So I think the skills that we're looking for, you know, haven't really changed. It's really been about investing in the people that we have. The one thing that has changed is the roles that we had offshore. Uh we've certainly automated a number of the routine processes and we have not needed many offshore resources.

01:34 - Paul Lucas: Okay. Interesting. Interesting as well that the skills that you're looking for haven't necessarily changed. Jennifer Kessel: , is that the case for your organization as well?

01:34 - Jennifer Kessel: I would say it's not. um we do not send anything offshore so it is all here in the US and so the skill set has changed tremendously those roles that really were about processing information now we're looking for people that can recognize interpret and do something with the information and so I think that the days of we take this piece of information and we move it from one place to another we don't need team members to do that we have the technology to do that. Really, what we need is judgment. We need exception management. That's a huge thing, right? We're looking for someone who can dive into the AI workflows and processes, identify an exception, and then manage that exception and then relationship building. So, and that was always a skill we're looking for, of course, but ours has shifted and part of that is because everything has always been here domestically, so the roles have changed.

02:38 - Paul Lucas: Okay. And I I'm assuming Kristen as well that that sort of shift must mean a change in what you're looking for on the education side as well.

02:38 - Kristen Skender: Likewise to Jennifer Kessel: 's point, we're looking for team members to contribute in additional ways and learn new skills. So what we've done with that is create internal training that could also have external representatives that join us, whether it be from a carrier or a vendor to help build up our expertise of our team members, empower their decision-making process, have them look with a more critical eye at things like inspections, quotes, and the data that we're receiving from our technology to help make empowered decisions. So really a lot of wraparound in terms of internal education to elevate their responsibilities.

03:40 - Paul Lucas: Similar picture for you Ryan. What are you really looking for here?

03:40 - Ryan Deeds: I mean for us I think it's we haven't started to turn the corner yet. Um you know we have a lot of just process work that we're still working through. We're an early we've only been around a couple of years. And so as we bring those together, I mean, I think the future is going to be flexibility, you know, um, good soft skills, you know, you can't hire anymore. It's like there's too many folks out there and, you know, on a team, you just you got to be able to work together effectively. And I think that something that makes people stand out is solutioning. We think about solutioning a lot. Like, yes, you can bring a problem. Can you bring a solution as well? And then we can help scale that solution for you. and getting people to think in that way where the problem is no longer the block there is a solution for it. How do we find it?

04:08 - Paul Lucas: Yeah. No problems only solutions. Uh let's move on to my next thought which is really around um I guess this maybe one the biggest questions that we can ask around technology which is how do you actually measure the return on investment the ROI uh beyond of course the efficiency claims that that get made at the pitch stage. Jennifer how are you approaching it?

04:35 - Jennifer Kessel: That's the million-dollar question, huh? Um, we what I would say is you have to look through the rearview mirror before you look through the windshield. And what I mean by that is we've become really disciplined about establishing a baseline before we do any type of implementation. So I you the easy piece is how long does a process take, right? But I'm also looking at how frequently do errors occur, where are the bottlenecks? because if I don't know that it's nearly impossible to prove what the investment actually improved and so I really we have spent a lot of time focused on that specific area then when we implement we're looking at of course adoption cycle time accuracy rework additional capacity that we've gained all of the and then revenue impact right what we're all looking at but what I would say is I hear a lot of we're saving x amount of time for us that's not an R ROI. There's something attached to it, but that's an efficiency. What I'm really interested in in our organization is what are we doing with that game time, right? What other value are we providing? And that's where I start calculating the ROI.

05:39 - Paul Lucas: Yeah, I'm seeing Ryan, it looks like you're nodding along. You're in agreement with Jennifer.

06:09 - Ryan Deeds: Yeah, I mean I think you have to know where you came from, you know, and from an analytics perspective, that's what I always think about is, you know, how do we determine current state? What do you what do you think future state should be? What's the gap between that? And then kind of defining those success criteria. But I think you have to look back at um you know what what the frequency and the time spent on each task is. And so for us, we kind of do a taxonomy, I'm sure everybody does, on their tasks. you know, what's the what's the largest volume thing that we could target to automate effectively so we can say the and I love what Jen said about, you know, the save time is not enough right now. That's where we are. I would way I would love to get to the mature point where we could say, "All right, not only did we save you time, but we allowed you to advise your clients more effectively and now we're 32% safer for organizations that adopt this kind of process." I I love that thought process and I'm going to reframe some of my thinking around that as well.

07:04 - Paul Lucas: Kristen, from your perspective, is there is there genuinely a tangible difference to be made to the bottom line here?

07:04 - Kristen Skender: Absolutely. I think being the size and stage of organization that we are, the first thing that we look at is is it going to increase in terms of are we going to make money? Are we going to write more policies? I think Jennifer brought up a great point about an efficiency is great, but at the end of the day, what are we going to do with that time? how is it going to impact bottom line sales? So really looking for that type of opportunity not just of time or cost savings but also increasing our revenue stream.

07:30 - Paul Lucas: I imagine there's a lot to take into account though Kate particularly around up budgeting here right?

07:30 - Kate Grasman: Yeah, I mean I think that you know we've been working on this for three years as I said and you know we had two years to really innovate on what are the business problems and processes we were trying to improve and this year we're to the point where you know we started seeing this you know I was looking for hard savings because I wanted more money to invest in technology and so what we did was we worked with our CFO to actually make an AI budget based on different business processes and We actually looked at the offset of what our BO costs and I can tell you that you know because of the technology that we implemented for like proposals, certificate of insurance, policy check, we of course looked at accuracy um and we knew that we got that over the past years, but we were able to actually, you know, manage those offsets to say, hey, we're saving $600,000 this year. And that's how we're actually really determining straightforward, you know, bottom line ROI. Right now, honestly, we haven't been able to capture what the, you know, the time saved is. You know, we really looked at getting some of that hard-hitting bottom line savings.

08:32 - Paul Lucas: I've got to say, I love how uh candid you're all being so far. Thank you very much. So, let's see how far I can push that. I'd love to know uh where are you seeing genuine build versus buy tension in your tech stack and indeed what's driving that decision either way? Uh Ryan, any thoughts on this?

09:00 - Ryan Deeds: I mean, I think most agencies today, most large organizations are at least having that conversation. We have it with everything. I mean, you know, everybody since anybody can throw up anything now, they're always like, "Hey, how long would it take us to build this out?" Often times, it wouldn't make sense for us to do that. And I think before, you know, code maintenance was a huge concern. And I think today going forward, you know, you have so many different capabilities to manage that that you are going to have a lot more builders in the mix. Um, but I think every strategy gets get you to some place. For us, I just I freak out when we want to buy stuff and give away data to them. They learn our, you know, then it's easier for us to integrate some of this stuff directly into our workflows and use the two or three features uh specifically than the entire solution. And so um yeah,

09:55 - Paul Lucas: analyze cost. That's a that's a big issue here, isn't it Kristen?

Kristen Skender: Absolutely. I think we have to understand what is happening to our data, who's gaining access, what might they use it for, and how does it impact our competitive edge? And so I think to the extent that we can protect that and utilize building our own technology, we're adding components in terms of what we are considering buying. But I agree with what Ryan said. It's components, you know, it's pieces of a larger software player platform. It's not necessarily an entire bot solution so that we keep our competitive edge.

10:25 - Paul Lucas: You in agreement with Ryan as well, Kate, or do you have a different perspective?

Kate Grasman: Yeah, I mean, I think I'm a little bit different. I'm more in probably more of a a buy CIO or partner CIO. Um, you know, perhaps it's my product management background. I know how much it takes to innovate and um maintain systems and I'm really just interested in getting the best talent out there. You know, we're an insurance company. You know, we're not a tech company, right? So, I look to partner with people to innovate faster and learn from that. And so, you know, that's been a really good strategy for us because, you know, let's be honest, a policy check or an endorsement isn't really a competitive advantage. So, you know, even if I'm partnering with someone to build that, you know, that's just kind of table stakes at this point. So, you know, I'm really looking at what's the talent out there. Can I innovate faster? And so, I am really buying the tech right now. That doesn't mean I'll do that forever, but given where we are with AI and the rate of change, you know, agility is super important to me and that's why I'm partnering at this point.

11:54 - Paul Lucas: Okay. Uh, different approach in your firm as well, Jennifer.

Jennifer Kessel: built our technology over the last 25 years and we continue to do so. We rarely ever buy technology. For us, I think it has really made us be strategic about what we're implementing because when you're buying and you have the money, you can buy a bunch of products at a time. But it's really forced us to sit down and say, what does our team need? What's going to add more value? what's producing ROI to the bottom line, right? Where is it most needed? And that's what we're going to go build. We've never wanted to rely on a technology partner to um work on the next version of their platform. We want to be working on the next version of our platform and drive where it's going. So, it's always been, you know, build the platform for us.

12:28 - Paul Lucas: thing of course that people are having to stay on top of is unauthorized or indeed unsanctioned use of AI tools by staff, shadow AI as it has become known. Um it's a real governance concern right now of course. Uh Kristen, what controls are you putting in place to manage it?

13:01 - Kristen Skender: Absolutely. Paul Lucas:, I think we first had to look at what are our procedures and expectations and how do we communicate those clearly with all of our team members. So as soon as the AI opportunity became at a consumer level where anyone could access it, that's when we were being clear about those procedures and expectations with regard to signoffs and handbook. We've also implemented our various security procedures, which of course is front end and backend verifying uses and cases of how they're using it. But all that to say, our end goal is to create collaboration and to create partnership and how we develop new ideas. So yes, we put the guard rails in, but we also are encouraging that people share and collaborate and work together and determine how we can authorize that use, how we can make it meaningful to what they do.

13:31 - Paul Lucas: I love that positivity. But uh but Kate, governance, it is a it is a difficult problem, isn't it?

14:04 - Kate Grasman: Yeah. Yeah, I mean particularly sitting in the CIO seat, right, you worry about cyber risks and threats um all the time and just like Kristen, we at Heffernan have also implemented a number of the youth policies and so forth, but you know, we also don't want to hinder creativity, right? So, how do you unlock and harness, you know, the capabilities that our team members have because they're actually doing the work day in day out. So what we've done is we have certainly tried to put in you know ways that people can actually bring different capabilities to us so that we can review them from a security standpoint make sure that the use is appropriate. It doesn't always happen like we do a back-end search to see are people using technology that they should they shouldn't and that has of course happened. Just last week I was telling someone to stop using a technology till I review it. But you know, we've really tried to implement a vendor management process that hey, bring us the tech so that you can use it and uh we're really trying to tap that creativity that we have within our organization.

14:58 - Paul Lucas: Awesome. And then Jennifer, do you have processes, procedures in place as well?

Jennifer Kessel: Yeah, of course we do. I think everyone needs to have them. Um they're evolving as the technology evolves and so we have just got to stay on top of it. But I think Kate makes a great point and that's this. We can solve for maybe 80% of a problem by implementing some kind of technology solution. Our team is going to go find a solution for the other 20%. Where they're going, I need to be focused, right? Because they're going to solve a problem that they have. I need to go to explore to see if that problem they're looking to solve is an enterprise wide problem. And then how is that my solution? So, I'm allowing them in that 20% that's not solved yet. I'm allowing them to drive where I'm going or at least where I'm exploring next.

15:29 - Paul Lucas: Really interesting. And Ryan, how has it been handled in your company?

16:03 - Ryan Deeds: And luckily, I get to lean on somebody like a Kate uh you know, we have a CIO that helps on the consumer side that does the policies that does all that jazz. uh internally when we build tools there's a lot of uh stuff that we have to get audited on and you know cross our tees and dot our eyes but from the consumer level um I I'm lucky because that does fall within the security purview and you know I'm a pain in my CIO's uh bonnet as well I would say as we as we balance out you know frontier learning with security and how comfortable are we with those gaps and

16:37 - Paul Lucas: Well, okay. Well, I'm going to throw one final uncomfortable question at all of you if I can because of course as direct and digital distribution channels continue to expand. What of course does that mean for the long-term relevance of the traditional broker relationship? Uh let's see how much faith each of you has in it. Uh Kate, let's start with you.

Kate Grasman: Yeah, I mean I've actually done a lot of thinking on this and you know I think that you know the digital brokers that you're seeing will certainly disrupt some of the work that's happening but from where I sit it's harder to build the network of producers and that knowledge base. It's easier to actually find the tech. So I actually think you know a company like Heffernan is in an excellent position to be able to adopt and innovate in any of these digital capabilities that are out there but we also have the network of people with the skills and capabilities to continue to serve our clients. I mean, it's certainly, you know, if people just want a quick, you know, pet insurance, of course, that's probably, you know, fit for purpose for digital, but the really complex insurance or, you know, like myself, I joined Heffernan because I couldn't find a carrier or company to place my insurance for my house, but I actually called Heffernan and they were able to place the insurance, make sure that my house was fireproved. So it's really I don't think the brokers are going to go away with these, you know, digital companies. So I think there's always a place as long as we have the skills and capabilities with the people in developing those relationships.

18:08 - Paul Lucas: Yeah, that's a positive start. There is always a place. Ryan, do you agree with that?

Ryan Deeds: Yeah, I mean yes, I do. I think you know when you're working when you're working with large organizations that have massively complex risks that are not that are hard to variableize, you want humans in there. I mean that's that they're buying trust, right? there and you're going to see a segmentation, I think, between the way brokers handle, you know, smaller accounts and figuring out what touch points make sense for what and that automation should then allow you to do more for those other clients. I also think there's risk of, you know, and how do we how do we continue to evolve to that trusted advisor that its own revenue stream to protect from u encroachment on other entities. I would say, you know,

18:58 - Paul Lucas: if it sounds, Jennifer, like there's a combination to be struck here.

Jennifer Kessel: I would say it's digital plus broker. There's something that's common between what Kate said and Ryan said, and that's a human involved, right? Kate picked up the phone and called. There's a carrier on LinkedIn who's doing a whole campaign about the phone ringing and they pick it up. And I think that regardless, we've seen this transformation in technology before where we were processing paper applications or we were mailing policies and that changes how what the roles are in our organization and what our team does. And I think moving forward based on the technology that's being put in place and the AI that's evolving, it will change what the expectation our client has of us. And so how we're interacting with them, the level of expertise that they that we have, the level of value that we bring, that all changes.

20:01 - Paul Lucas: So some fairly positive outlooks for the future of the broker. But Kristen, from your perspective, can we even think long term here?

Kristen Skender: I think in order to look at the long-term strategy, we're taking a step back and we're asking our carriers and partners as well as our clients and agents what their strategy is and where we can add value in the distribution chain and then looking to solve for that to eliminate friction, ultimately give them a great user experience that's wrapped around top-end technology with a human touch and concierge level service. So, we're looking at ways to bring the best of both worlds as much as we can. And I don't know exactly what that looks like yet, but as I mentioned, getting that insight from our partners will help to guide that strategy forward.

20:33 - Paul Lucas: Sports and indeed a brilliant panel, especially with so many new faces. Of course, remember our leaders network is back together every month. So, stay tuned for our next edition right here at insurance business TV.