Artificial intelligence is developing at lightning speed, so much so that Victor Winter included a “breaking news” alert in the middle of his recent presentation to the National Association of Insurance Commissioners.

Winter is a computer science professor at the University of Nebraska-Omaha. He updated the Innovation, Cybersecurity, and Technology Committee on generative AI during the NAIC fall meeting Dec. 1.

“As a computer scientist, I am used to things happening quickly,” Winter said, “but this is completely off the charts how quickly this is happening.”

Generative AI in particular holds promise for across-the-board applications for the insurance industry. Advances in AI are expected to have “far-reaching implications for the global enterprise software, healthcare and financial services industries,” according to a report from Goldman Sachs Research.

Nvidia, a computer chip giant and AI leader, has predicted “that the impact of AI adoption could be greater than the inventions of the internet, mobile broadband and the smartphone combined,” Winter told regulators.

‘A much more concentrated focus’

The venerable New York Life has been around since 1845 and is one of the largest life insurers in the world. It didn’t get that way by ignoring trends such as AI. Alex Cook is senior vice president and head of strategic capabilities at New York Life and overseeing the insurer’s exploration of AI.

“In March of this year we launched a much more concentrated focus on generative AI and that’s something that I’ve been spearheading,” Cook said. “It was very clear at that point that generative AI was a game changer in the ability to really start to work much more constructively with unstructured data, not just structured data.”

In October, New York Life added industry veteran Don Vu as senior vice president and chief data and analytics officer. Vu is leading a newly formed AI and data team “with responsibility for AI, data, and insights capabilities and aligning data architecture with business architecture in support of the company’s business strategy and objectives,” the insurer said in a news release.

New York Life is employing both “top-down” and “bottom-up” approaches to exploring how it can utilize AI, Cook explained.

The company is focusing “on the opportunities where there’s not only a good degree of value that we think we can drive, but it’s also feasible. This includes areas were we have the relevant data, where the application doesn’t have too much risk associated with it, and where we think it’s doable,” he added

For now, New York Life is using AI in ways most insurers are – for marketing efforts, to help making call center representatives and agents more productive, as well as in underwriting and predictive modeling. Generative AI can find a form or an answer to a policyholder question much faster than by traditional means, Cook noted.

AI has limitations

There are limitations to what AI can do, Cook noted, and it’s best to not force things.

“It’s easy to say, ‘Hey, we have a great new tool, let’s use it for everything,'” he said. “I think there are a lot of cases where it’s maybe not the best tool.”

Despite its legacy image, New York Life is being very open minded and proactive about educating employees on AI and generative AI, Cook said.

“There’s only so long you’ll be able to stiff arm it,” he said. “These kinds of capabilities are going to be quickly embedded in so many of the tools that we use, so better that we train people and educate them on how to use them, how to use them well, how to use them appropriately.”

Vu joins New York Life from Northwestern Mutual where he served as chief data officer since early 2020. He led a consolidated team across various disciplines, including data product and strategy; data science, AI, and analytics; data engineering; and data governance, the release said.

Previously, Vu spent 13 years at Major League Baseball, where he led its consolidated analytics organization as vice president of data and analytics. While at MLB, Mr. Vu led data and advanced analytics efforts at BAMTech, a streaming media technology spin-off of MLB Advanced Media.

“He understands enough about the insurance industry and life insurance in particular, but he also has really good experience outside the insurance industry,” Cook said. “You don’t typically look for cutting-edge, technology, data, and AI talent within life insurance companies, though that’s starting to change. It is important that we have that broader perspective right in house.”

Regulators have AI in their sights

Governance of AI is a significant emphasis for New York Life, Cook said, as the insurer aims for “ethical” use of AI’s impressive power. It remains an emphasis for regulators and consumer groups as well.

The NAIC concluded its recent meeting by adopting the Model Bulletin on the Use of Algorithms, Predictive Models, and Artificial Intelligence Systems by Insurers.

The bulletin is not a model law or a regulation. It is intended to “guide insurers to employ AI consistent with existing market conduct, corporate governance, and unfair and deceptive trade practice laws,” the law firm Locke Lord explained.

It is an interpretive bulletin as well, Kathleen Birrane, Maryland insurance commissioner, reminded colleagues. It will go to each of the individual states to consider for use and adoption.

“It is essential as this technology becomes more intertwined with more and more of the fabric of our society that it does not propagate or amplify any societal distortions,” Winter said.

InsuranceNewsNet Senior Editor John Hilton covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.

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