Cognizant’s Sarat Varanasi on GenAI and Tech Evolution in Life Insurance

GenAI is still in its preliminary stages at most life insurance companies, but Cognizant is investing significantly in finding practical applications in a variety of technology and business process contexts.

(Photo credit: Lyn Hughes.)

Cognizant (Teaneck, N.J.) works with many prominent insurers but talks about few of those engagements. We were pleased to see the company’s announcement of the expansion of its technology operations partnership with CNO, as we had talked recently with Mike Mead about the carrier’s work with Cognizant, among other topics. As a follow up to a news report on that relationship, we reached out to Sarat Varanasi, Cognizant’s North America Insurance Business Unit Leader for the life insurance industry. Cognizant, and companies like it, are evolving as technology evolves, finding new ways to help insurers and companies in other industries to be more profitable. As CNO’s CIO Mike Mead put it, “By continuing to partner with Cognizant, CNO will continue to leverage tools that can further boost productivity and build on our capabilities around automation, artificial intelligence, technology transformation and process optimization.”

In addition to working with some of the biggest companies in the life insurance industry, Sarat has enough experience to take a personal historical view of the evolution of technology services for life insurers. We caught up with him to talk about that evolution in general, with some focus on the opportunities created by GenAI.

Insurance Innovation Reporter: Both because of a recent discussion on the evolution of TPAs and also Cognizant’s news about extending its BPO partnership with CNO, I wanted to pursue a conversation about how the evolution of technology in life insurance is changing how service providers work with their clients. Cognizant said it is providing end-to-end technology services, using industry-leading delivery frameworks and service offerings, and that the company will also leverage GenAI to drive efficiencies for CNO across infrastructure, applications, enterprise software, and engineering. Let’s discuss the change in general and also how this new technology is shaping what companies like Cognizant do.

Sarat Varanasi, North America Insurance Business Unit Leader, Cognizant: I think it is so true that the technology has made significant changes. The age-old problem in life companies is conversion of data. The basic problem there was finding out what was written in contracts many, many years ago, and what are the requirements, and how do they get translated. So that’s a classic case where we are utilizing Gen AI, where it can read the contracts, come up with your basic requirements, and also help simplify some of the routines for conversion.

IIR: And you’re seeing impact in what you’re doing for your clients?

SV: I’m thrilled about the impact that that the technology can have, and the benefits that our customers can realize just using Gen AI as a technology.

IIR: What are some other use cases for GenAI today?

SV: In the group benefits space, the process responding to RFPs is a very content-rich process— and a very time-consuming one. The classic use case where we’re working with the client is to generate some of those responses. They look at previous responses, they look at the type of questions, and then the technology comes up with some basic responses that can be used or assisted by humans to make it richer. That’s in the distribution and the initial cycle of responding to RFPs and codes, etc.

We are currently working with another client, where it’s not a core insurance use case, but it involves looking at all of their complicated financial reports, analyzing the type of questions that have come in from analysts and advising them on what they should talk about. Not only that, but we’re also supplying them with the types of questions they should expect from the analysts, based on previous reports. The technology is evolving—we’re now anticipating the questions at about 65 to 70 percent accuracy.

So that’s another example where technology and GenAI is being used by our clients. The last one has to do with internal systems. If you look at onboarding of people it’s a very content-rich process: they have to learn about the product, the different types of contracts, what has been sold. So, GenAI is being used there.

Another example is maintenance of technology systems. When you look at the number of tickets that are raised or issues that are raised in technology, there’s a pattern for that. So now we’re using GenAI to provide a resolution automatically instead of requiring human effort.

So many businesses are excited in trying to be part of this change and helping our clients look at the potential, right? Now the technology is there, the potential is there and there many use cases. We’re seeing some very exciting change as we help our clients look at it potential.

IIR: What are some ways it could help with the historical problem of systems discontinuities in the insurance technology environment?

SV: Bridging those gaps often involves manual data entry. Gen-AI could definitely be a tool that can be used in bridging those gaps.

IIR: When thinking about the potential of AI, one often hears dystopian scenarios where it becomes a hyper-powerful, malign force. And yet, one still can’t get decent customer service from an airline, or whatever. How are you looking at the potential of GenAI to enhance customer experience.

SV: Let me give a couple of examples about integration. We’re working with one of our clients in reducing the number of screens used by CSRs [customer service representatives]. CSRs can go through 10, 12, even 15 different screens to get an accurate response back to the customer. We’re building technology now, where they can look at just one screen that integrates the data from the underlying systems. That not only makes it easier for the agent, but obviously it makes the customer experience a lot better too.

In a retirement plan, where we have utilized latest call center technologies with AWS, their calls have gone down by about 35 percent because the customer will be able to get responses intuitively without them feeling like it’s just a system responding. So, they’re getting responses much faster.

Sarat Varanasi, North America Insurance Business Unit Leader, Cognizant.

IIR: What are examples of your work with CNO?

SV: I talked about customer service agent technology above. To provide an example from individual life, the underwriting questions are typically in the form a standard set. So, it’s not intuitive or interactive. You ask the person X number of questions, they’re going to respond to all. We’re changing the way that they’re being asked to make it interactive.

Based on the responses, the system knows what question to ask next, rather than just one standard set of questions. This reduces the amount of time spent in underwriting and also helps them provide a much better customer experience. These are a couple of examples of how we’re working with CNO in changing the technology.

IIR: How would you say that the role Cognizant—and companies like it—is changing, and how you’re becoming a different kind of partner, in addition to continuing to offer these other classic services that continue to be important?

SV: One way is that we’re “eating our own dog food,” as the saying goes. We have implemented GenAI into our own systems. We are using co-pilot type of technology to help reduce the effort that is done by our own developers. And, of course, we are taking what we’ve learned to our clients.

Secondly, I think we’ve become much more thought-leadership partners. When some of these technologies are introduced, we call it S-curve. For example, digital transformation has been an S-curve. Y2K was an S-curve, and GenAI is an S-curve.

GenAI is fairly new and can be applied in several different ways. So, we’ve become thought-leadership partners to our clients to help them to find practical use cases. For example, the financial results work that talked about. Nobody would have thought that I could go and apply this to a CFO, but we are actually working on that and other things like it. We’re changing our own models, and we’re helping clients to change their models.

IIR: Is there a cloud angle to this discussion?

SV: Yes, absolutely. As the technology evolves, more and more applications move to the cloud. It’s not the traditional support system—it actually permits greater observability. We’re being more proactive about helping healthier clients reduce the cloud cost, because it’s a big component of their cost right now. So, the more we work with the client in the thought-leadership mode, the better access we’ll have in terms of how they can work with us and how we can help them.

IIR: What would you say about the importance of GenAI to Cognizant’s work generally, as reflected by the resources you’re committing to the technology?

SV: We are investing significantly in GenAI—we’re putting about a billion dollars into developing the technology for various industries. We see this technology as a great leveler. Insurance processes are very knowledge-driven, but with the lower end of the skill set, with the technology that’s available, I think that everybody can do a similar job, even with lower skills. So, we see that as a great leveler in terms of available skills.

And last but not the least, we are driving innovation in our organization utilizing this technology. We have an initiative called Blue Bolt, which is driving innovation. As a company, we have 200,000 ideas that have been developed. In insurance, we have about 25,000 ideas that have come up from my teams. We support 15 million participants in life insurance across various lines. Our clients are either helping a customer in their hardship, or they’re helping them protect their wealth, or they’re helping them in their life transactions.

Our teams who do the same have come up with ideas to say, “An integration here would serve a customer better,” or “How can we bring down the underwriting questions from 25 to three, but still get the same quality of underwriting?” These are the kinds of the things that are coming up in our innovation efforts, and we’re very excited about it.

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Anthony R. O’Donnell // Anthony O'Donnell is Executive Editor of Insurance Innovation Reporter. For nearly two decades, he has been an observer and commentator on the use of information technology in the insurance industry, following industry trends and writing about the use of IT across all sectors of the insurance industry. He can be reached at AnthODonnell@IIReporter.com or (503) 936-2803.

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