AI Could Keep the Life Underwriting Gears Moving: Brooke Vemuri

Brooke Vemuri helps turn streams of data into life insurance, and she now sees a lot more variation in the gears, sprockets and cogwheels inside insurers’ application underwriting machinery.

“Today, there’s so much variety in terms of how the application processes work,” Vemuri said in a recent interview.

Vemuri is the vice president for business transformation and engineering at Legal & General America, one of the top issuers of individual term life insurance in the United States.

Since she assumed that role, in 2018, she has helped Legal & General America deal with the rise of automated underwriting systems, wave after wave of cyberattacks, growing regulator and consumer group unease about artificial intelligence systems, and the COVID-19 pandemic.

Right now, she’s not all that excited about whether AI systems will write jokes, draft reports or ask insurers to take them to our leaders.

She’s focusing on whether an AI can steer an applicant who needs to go through a paramedical screening to a nearby testing center that’s open at a convenient time.

“Technology is best used as a partner,” Vemuri said. “It’s really there to improve the processes.”

What it means: For now, at least, life and annuity issuer tech executives are still focusing on basic issues like using tech to get clients through the application processes more quickly and with less friction.

The distributors’ needs: One concern getting Vemuri’s attention is how to bring some comfort to the brokerage general agencies, or the life insurance wholesalers that try to put some live-human padding between retail agents and the immensity of the big term life issuers.

When brokerage general agencies set up new relationships with the life insurance issuers, they face challenges of their own, Vemuri said.

She recommended that they open up lines of communication, work on understanding and setting expectations, optimize system integrations, perfect security and testing processes, and be open to trying new ways of doing things.

Five years ago, she said, “everyone did things the same way.”

Today, she said, each insurer has come up with its own approach to coping with technology and distribution strategy changes, and brokerage general agencies may need to address fundamental matters such as whether they actually have a place in a particular issuer’s world.

The differences: Years ago, insurance technology groups organized high-profile efforts to set life and annuity tech standards.

A typical insurer might limit itself to using three main sources of information: the application itself, an applicant’s medical records and results from underwriting tests.

Today, “we have so many different evidences coming in,” Vemuri said.

In addition to the old streams of information, a life insurer’s underwriting process might pull in electronic health records, lab history records, criminal background records and a wide range of LexisNexis records.

“We’re passing along more information than what the ACORD standards can accommodate,” Vemuri said. ”We have our own standards now.”

But, possibly because of insurers’ need to focus tech resources on concerns such as the pandemic, cyberattacks, AI and major new accounting rules, life and annuity tech standards projects are getting much less attention.

A new generation of underwriting standards efforts could be helpful, Vemuri suggested.

The problems: Huge cybersecurity breaches have made news in the past year.

Hackers have dumped so much consumer information online that the price of a hacked U.S. credit card with the card verification value number from the back of the card has fallen to just $15, according to Privacy Affairs.

But life and annuity issuers are not necessarily facing significantly more trouble with identity theft-based fraud than in the past. They have always had to worry about traditional, paper-based forms of identity theft, and they now have more identity verification resources, Vemuri said.

Similarly, the personal data error rate appears to be roughly comparable to what it was in the past, Vemuri said.

But Vemuri sees consumers noticing the errors that are there more often.

“Correcting it isn’t as easy as it once was,” she said.

She suggested that wholesalers, agents and advisors should ask insurers about what kinds of processes they recommend for correcting errors in clients’ account data.

Brooke Vemuri. Credit: Legal & General