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Innovating Insurance: Sapiens and Microsoft Unleash the Power of Gen AI

Innovating Insurance: Sapiens and Microsoft Unleash the Power of Generative AI

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The partnership between Sapiens and Microsoft is unleashing the power of Generative AI on the insurance industry, with investment and collaboration that support innovation and customer value. Anu Chawla, Senior Director, Microsoft Global Partner Solutions joins host Rafael Goldberg, Head of Sapiens Decision, to discuss how the companies are combining resources to develop solutions that incorporate this transformative technology and drive the market forward in this week’s podcast.

Rafael Goldberg|Anu Chawla

Rafael Goldberg: Hello, welcome to the Sapiens Insurance 360 podcast. I’m your host, Rafael Goldberg, Head of Sapiens Decision. And I am so glad that you’re out there listening! This is where we discuss the latest news, trends, and hot topics in insurance, with a focus on technology and solutions.

It is impossible today to discuss insurance or technology without talking about AI. Generative AI in particular, has captured our collective imagination, providing a conversational and knowledgeable digital counterpart for our inquiries. Technology providers from the largest household names to the proverbial two friends in a garage have been in a race since late 2022, just over a year ago, when Open AI first released ChatGPT to the public to prove out the concept for business application and the unlock of transformational value. Especially remarkable and exciting is the pace and scope within insurance from solution providers to carriers of leveraging this exciting new technology and capability for operational efficiency and greater customer experience.

I’m so excited today to introduce our special guest, Anu Chawla, Senior Director, Microsoft Global Partner Solutions, who’s joining me to discuss “Innovating insurance: Sapiens and Microsoft Unleash the Power of Generative AI.” Our talk today will focus on Generative AI insurance and Microsoft’s investments in the space and their view on the transformational opportunity. Anu and I will also chat about the global strategic partnership between Sapiens and Microsoft and how that is supporting exciting innovation and value for our customers.

Anu, welcome!

Anu Chawla: Thanks for having me, Rafi. Great to be here!

Rafael Goldberg: Absolutely. Great to see you again! We met last October at Sapiens as North America Summit in Tucson, Arizona, where you delivered a great industry keynote on AI and insurance, Microsoft’s investments, and the Microsoft/Sapiens partnership. I’d love to pick back up from there and start by asking you, how is Microsoft investing in Generative AI?

Anu Chawla: Absolutely, Ravi. As you know, Microsoft has made significant investments in Generative AI, especially as you mentioned, through our partnership with a research lab known as Open AI, which is also best known for its ChatGPT chatbot. The large language models developed by Open AI have become a key part of Microsoft products such as GitHub, Copilot, Bing, and Azure. In fact, our CEO Satya Nadella, has challenged our engineering leaders to incorporate Gen AI technology across all of our products. And you can see it here in solutions such as security Copilot, sales Copilot and dynamics, Teams and Microsoft 365 Copilot. In addition, the product innovation with Generative AI, we’re investing heavily in making the Azure Cloud the best platform for our customers and partners to build on Generative AI. We’ve made significant investments in Gen AI infrastructure with Nvidia GPUs being offered to our customers and partners as part of our infrastructure offering for building fine tuning and inferencing with Gen AI models. At a capability level, we’re seeing our customers use our AI platform in Gen AI investments across all of the industries, including insurance and financial services, where we’re seeing models being used for fraud detection, automation, document analysis, and risk assessment. So really, when you look at the Microsoft investment, it goes all the way from the software, the tools that developers use like GitHub copilot to be more productive to developing solutions to our first party products like Dynamics as well. And of course, our infrastructure in our cloud hyperscale platform Azure. So we’re up and down the stack. We’re making investments all across [the] Microsoft platform.

Rafael Goldberg: That is so awesome. I mean, I have to say as a user and as a partner, I really feel that. And I’m just I think it’s the it’s not only the strategy and the broad approach, but also the execution. I think you guys are just nailing it and really providing everyone with the very exciting ecosystem. So super cool. So I wanted to drill down into insurance now. So taking it from the broad capability of Generative AI and how Microsoft is investing there, which you really nicely described, and get your perspective and that of Microsoft. So how does Microsoft view Gen AI as a driver of transformation in insurance?

Anu Chawla: Yeah, sure thing, Rafi. Again, Gen AI is poised to drive significant growth and transformation in insurance, offering innovative ways to enhance efficiency, customer experience, risk management, and product development. Gen AI acts as a catalyst for change across various facets of the insurance industry, including underwriting and risk assessment. You know, Gen AI can analyze vast datasets, including nontraditional data sources, to provide more accurate risk assessment. This leads to more personalized insurance policies, better pricing strategies, and a deeper understanding of emerging risks. Another area where we’re seeing a huge transformation happening is claims processing. AI can automate the claims handling processes, making it faster and more efficient by analyzing claims data, images, and reports. Gen AI can assess damages, estimate costs, and even detect fraudulent claims with higher accuracy than traditional methods. Another area where we see a huge investment happening is customer service and engagement. AI-driven chatbots and virtual assistants can provide 24/7 customer service handling inquiries, policy updates, and claims submissions. These tools can offer personalized advice and support improving customer satisfaction and engagement. A key partner we’re working [with] in this area is Nice system, which is a leader in the contact center arena. They incorporated Microsoft’s Gen AI in a product called Enlightened AI to help agents be more productive with helping customers in the contact center with insurance claims. Another example where we’re seeing a huge investment is product development and personalization. Gen AI can identify patterns and trends in customer data, helping insurers to develop new products or tailor existing ones to meet specific needs of many different customer segments they serve.

Operational efficiency comes to mind also as a key area. By automating unique routine tasks and processes, Gen AI can significantly reduce operational costs and free up human resources for more complex and strategic activities. Another area which we know insurance struggles with is fraud detection. AI algorithms can analyze transactions in real time to identify patterns indicative of fraudulent activity. This capability ensures [and] enables managers to prevent fraud more effectively, saving billions annually. We see many insurtechs, including a key Microsoft partner named Shift AI out of France, that’s using Generative AI in our platform to help customers with more accurate fraud detection. And finally, I’d like to call up marketing and sales. I remember talking to Sapiens CMO, Yaffa Cohen-Ifrah at the North American Customer Summit, and she mentioned how she’s using Gen AI within her department to create more personalized marketing content and recommendations for insurance products based on your individual customer profile, improving your conversion rates and customer acquisition.

So in conclusion, as you can see, Gen AI’s potential to revolutionize the insurance industry by enhancing customer experiences, improving efficiency, and creating more personalized and more innovative insurance products. As the technology evolves, it will undoubtedly uncover new opportunities and challenges, driving insurers to adapt and innovate continuously.

Rafael Goldberg: That is really, really exciting. I mean, it’s truly, any one of those things that you mentioned would be transformational. But when you take it as a whole, it’s really just amazing. It’s so interesting, insurance as a industry and as a vertical, I think has fairly or unfairly gotten a reputation for being stodgy. But I think when you listen to what you described and because it’s such a data-rich environment and it deals with customers and it’s very sensitive and here comes Generative AI and the way that you describe applying across so many different valley streams with insurance, it’s very, very transformational, super exciting.

So we’ve talked about Microsoft’s investment in Gen AI and how Microsoft views Gen AI as a driver of transformation in insurance. Let’s shift gears and talk about partnerships. That’s a big part of your role at Microsoft. How is Microsoft going to market with partners and how does the strategic partnership between Microsoft and Sapiens exemplify that model?

Anu Chawla: Yeah, great question, Rafi. A nice example of what I’m describing here is the innovative marketing offerings like Sapiens Decision Model AI that you guys launched at the same summit in Tucson. I’m going to flip the table here and ask you about that. What is it and how was it working with Microsoft on that product?

Rafael Goldberg: Thanks, Anu. Sure. So I’ll answer in three parts. So just starting with what is Decision and then what’s Model AI and how is it working with Microsoft, really unpacking the partnership piece of it. So starting at the top, Decision is an enterprise business decision management system. So we set out to solve the management of business rules in a more methodological, scalable, and operationally efficient way by providing the business with a visual modeling workbench with validation, testing, and code generation. So Model AI is our copilot for decision modeling. You can think about a decision model as the intermediary between the requirement source and the code it generates that runs in production. Think of a policy document, regulation, or taking underwriting and insurance as [a] use case. The set of rules that inform the underwriter when a policyholder is eligible for coverage. Creating that decision model, that intermediary, is like any kind of specialized skill. It takes training and practice. What we’re excited about is with model AI, the decision modeler can add the textual requirement in a chat window, and the AI generates the decision model structure for them to take through the governance process. So we see it as, you know, a) reducing the barrier of entry for the new user and b) turbocharging an existing expert user. So really a true copilot and working with Microsoft made this 10x easier and faster for us to get to market. So we started by looking at the vendors, but quickly ran into blockers that I would categorize simply as scale factors. With the surge in demand, it became impossible for us, that we’re new at it to navigate the steps. But once we engage with Microsoft through our partnership, it was a fast track, a fast path across all of the elements that you need to take into account. Technical, legal, operational. Microsoft is thought through all of this and it’s like hitting the easy button. It frees you up to focus on, we want to focus on dreaming up the business application and figuring out what AI does well and what our value add is and how to combine those into a compelling solution for customers. So really, the Microsoft partnership made it, made it possible for us.

Anu Chawla: That’s great. Great to hear. Very good.

Rafael Goldberg: So I need to sum things up. Here’s a rather kind of open-ended question. Just to wrap things up, what are you most excited about looking ahead this year and the future of Generative AI and insurance and elsewhere? And as you guys at Microsoft start to embark on this next chapter?

Anu Chawla: Yeah, absolutely. Great, great question, Rafi. So, as you know, Microsoft, the technology company and, you know, we see a lot of things that are happening that are possible today because of cloud technology and the investments we’re making and of course, working very closely with our partners like Sapiens. One of them is really the integration with IoT devices and with the cloud. As smart homes, cars, and wearable devices become more common, the insurance industry will increasingly rely on data from these devices. Gen AI with the cloud can analyze this real-time data to adjust policies, pricing, and even offer suggestions to users on risk mitigation. So we’re quite excited about the integration of Gen AI with IoT. We’re also thinking more about ethical AI and bias elimination. There’s growing concern about unintentional biases in AI algorithms. The insurance industry will prioritize creating AI models that are transparent, fair, and free from discriminatory pattern and Microsoft, as a big hyperscale AI vendor, has invested a lot in responsible AI practices in making sure that models are free from bias and eliminate bias generally. We also see globalized policy management with Gen AI’s ability to process and analyze diverse datasets. Insurers can offer globalized policies tailored to individual needs across different countries, considering local regulations and risk. And then also, we are very excited about preventative analytics. Gen AI will shift the industry’s focus from reactive to preventative, utilizing predictive analytics and IoT data to foresee and mitigate risks before they occur.

So in summary, we’re excited about the future of AI, and as a technology vendor, we want to enable our ecosystem of partners like Sapiens to take advantage of these trends and really get to the future with our customers.

Rafael Goldberg: I love it! Very, very exciting, the future is bright indeed. Well, thanks so much for spending time with us today, Anu. The Sapiens/Microsoft Partnership is really bringing the best of our respective talents and resources together to innovate, solve our clients’ biggest challenges, and drive Insurtech forward by in unleashing AI. The sky’s the limit, it seems.

Anu Chawla: Yes, it certainly is!

Rafael Goldberg: To our listeners, as always, thank you so much for tuning in. We love hearing from you, so if you have comments or would like to follow us on social media, please reach out to us on our channels. And don’t forget to subscribe to the podcast. And thank you once again for listening. We’ve got more coming, so be sure to tune in next time to Sapiens Insurance 360.