Max Life Insurance Experiments with Metaverse

As recently as five years ago, the insurance sector was in a dire need for innovation. The entire industry, whether general or life insurance, was largely paper-based.

“Even till few years back, some of the insurance companies (life, general, P&C) were asking you to fill up a physical form. So, that’s how this industry has been because documentation is key part of underwriting since a lot of money is at stake if claims arise against a policy,” Divyan Kavdia, Assistant Vice President at Max Life Insurance, said.

However, a lot has changed in the last five years. Insurance providers across the country are now leveraging modern-day technologies to improve operations, customer experience and provide better products and services. In this conversation with Analytics India Magazine, Divyan Kavdia talks about Max Life’s indulgence with emerging technologies such as AI/ML, blockchain, Metaverse and NFTs to enhance business.

AIM: Technology is changing how businesses operate today. How progressive has Max Life Insurance been in terms of leveraging technology?

Divyan: We were one of the frontrunners in digitisation and creating digital assets for key customer journeys. It was the same even when it came to adopting AI/ML. One of the first models that Max Life created for identifying claim risks was way back in 2014 -2015.

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We started our journey there and now, in retrospect, most of our assets are digitally enabled. These assets have an embedded intelligence unit that can be powered by AI/ML models or cognitive intelligence models—which could be around speech, text or vision.

That’s how our journeys are conceptualised and, now, we are also creating the wrapper around it to gain insights from a real-time actionable perspective from the journeys. To drive this particular journey, we have segregated units within our entire Max Life ecosystem that would take care of data engineering aspects, ML Ops etc . ‘AI Works’, which I am part of, takes care of creating these smart, intelligent assets for Max Life.

AIM: What does your role as the Assistant Vice President at Max Life entail?

Divyan: I am part of this unit called ‘AI works’, which takes care of all the AI and ML initiatives for Max life. This is a specialised unit entrusted with the responsibility to ensure that whatever digital assets we are creating should be intelligent and help derive actionable insights

I take care of the onboarding, which encompasses underwriting issuance. In addition, I also take care of customer service initiatives and claims payout. So, these are the three verticals that I head at Max Life.

As a unit we are focused on solving business problems thereby aiding process efficiency and accuracy. Idea behind setting up this specialized unit is to conceptualize the ‘art of possibilities’ & deliver the ‘embeded Intelligence’ solution aimed at enhancing core business processes.

A lot of my work revolves around tracking research and innovation in the field of AI along with what is happening in the industry, what kind of new-age players are coming up, what is the startup ecosystem doing and more. So the role is a mix of both, managing the team in-house to create solutions, and external facing role that pushes me to explore new and upcoming things in the industry to help Max Life leapfrog its journey.

AIM: How does Max Life Insurance use AI/ML? How has it helped improve operations at multiple levels. Could you share some use cases?

Divyan: In the last four years, we have witnessed a boom in the way we leverage AI/ML—much of it driven by the pandemic. Since its inception, the idea has been how we leverage AI and ML and utilise these to augment our decision-making capabilities. Since, at the end of the day, we are in the business of underwriting risk. The better we underwrite, the more profitable we will be.

So, whenever a proposal comes to us, there is a 360-degree assessment undertaken via models. One of the models is Shield Suite, which takes care of early mortality and fraud risk. It tells us whether there is a probability of a profile being fraudulent and further classifies proposals into five categories: Alarming, High Risk, Medium, Low and Lowest. By using this suite, Max Life has been able to potentially avoid issuance of risky policies  worth INR 700 crores in FY-2022.

Secondly, we have the Upfront Persistency Suite, which tells us whether a customer has premium paying potential and will pay their premium timely or not when it comes to renewal. If the customer has a low propensity of paying that particular renewal premium, we’d not want to on-board him because in the first year, we don’t make any money. So, if the customer doesn’t pay a second-year premium, we lose money. For us, it’s better if we don’t on-board such customers because that’d not be financially well-versed.

Further, there is an auto Underwriting Suite which takes these two inputs along with inputs from facial liveliness, which are called along with several industry databases that we have integrated—like financial bureaus and some of the other services that we have created like rural-urban services, reverse geocode mapping—and combines them to form an input to the auto underwriting engine which then tells us whether we should underwrite a particular policy or not.

All of these suites I have discussed are a mix of ML/DL & Vision AI. Besides, we also created a facial liveliness solution in-house. Many customers from Tier-2 and Tier-3 cities have bandwidth constraints. So, we took it upon ourselves and created this very bandwidth-friendly solution that gives results upwards of 92% in accuracy.

AIM: Can you tell us a bit about Max Life’s real-time health analytics solution ‘MediCheck’?

Divyan: MediCheck is one of the solutions which is very close to each one of us at Max Life because that’s an industry first solution. It’s tackling a problem that no one has been able to solve.

Medicheck is a realtime Diagnostic Centre (DC) fraud identification to identify fraudulent practices at Diagnostic centres used for undertaking customer medicals. The tool helps in identifying frauds like mirror reports being sent by any DCs. In addition to this the solution also help in assigning a statistically calculated health score on the incoming blood profile report and lastly it also profiles the Diagnostic Centre grades basis of historical experience of the DC. In last 6 months the solution has helped in delisting 400 DCs and re-determining risk on policies worth INR1300 Crores.

We found that around 10% of the diagnostic centres were sending a fair share of their digital records as standard records. What these diagnostic centres do is they don’t even test the blood sample sometimes and pass on a standard templatised report to us—which creates a risk in a sort of non-disclosure from a customer side or false medical persona being underwritten.

Now, we have implemented it in real-time; whenever a new medical test happens, we get a status report. This model runs and tells us whether we should take this report or not along with giving me the health profile of the customer. It also tells me whether the health profile is poor, average or good.

Since the policy went live two to three quarters back, we were able to identify such cases, and in terms of the amount, it translates into INR 1300 crores. So, that’s risk avoidance.

AIM: How can the insurance industry leverage blockchain?

Divyan: I think a lot of next-level technology evolution is also centred around blockchain. Why? As I mentioned, there are a few problems—fraud identification, for example—which blockchain can solve. If a life insurance company has identified a fraud, how is that information sharing happening without tampering with records? This information needs to be shared in such a way that it is not changeable. So, that’s where blockchain comes into the picture.

AIM: Is Max Life working on any projects related to the Metaverse?

Divyan: Max Life is also investing a lot in the concept of Metaverse. Personally, I feel the current level of maturity that Metaverse is being leveraged is a bit gimmicky.  However, once the technology moves there, I think it will open up a lot of use cases for life insurance sales too.

So, we have started from the perspective of employees. We have a sales force of around 70,000 people but most of them are located quite remotely. So, how do we give them the experience of our head offices? How can they interact with our CXOs? That’s the idea of where we have started off.

That’s very different from what others are doing because everyone wants to do it for the customer and we feel the technology needs to evolve to create a seamless experience for our customers in the Metaverse. For us, the idea is to actually start with the facilities, roundups and webcasts and gradually test the concept and move that forward into the customer.

AIM: What are your thoughts on NFTs when it comes to insurance?

Divyan: I believe technologies like NFTs are going to be the next level of evolution for the life insurance sector. Things like digital certificates, death certificates, living certificates—how do you ensure that these are not tampered with? NFTs are being used to own up a piece of art or an underlying asset. Now, can we have insurance setup for a product created for these things?

Suppose there is a video, and I want to insure it against theft/distruction. It will lead to a lot of new products coming in. So, that’s from a product perspective. Apart from that, from a policy documentation perspective also, why can’t I have NFT for every unique customer contract that I have?

There are two types of use cases: Insuring those NFTs because they have intrinsic value against it and leveraging NFT as a technology as the next leap into the digital journey.