How AIG Is Reinventing Insurance With AI | Peter Zaffino

25:42I think people were nervous that are we going to set the stage for what does the future hold? But I said to them, look, if it fails with them, and it's not going to, but if it does, it'll be 100 % my fault. But if it's successful, I need you to get behind me. That's my only ask. And there was agreement. Everyone's gotten behind me. I felt that, those two executives had better things to do with their time than to hang out with me on investor day, unless they believed in what we were doing. Um, and unless they believed in how we were going to use the capabilities that, um, Palantir has with Foundry.

26:27Um, we started with Anthropic 2.0 on Claude. So it was like early days. Uh, but Dario believed in what we were doing. We believed in, you know, betting on Anthropic at the time and felt that if they were able to share with our investors, with the sell side, with the audience, that they're committed to what we're doing and they believe in it, that we would get the credibility that we hoped we deserved and that we are going to transform the business. So I believe they did a tremendous job. It was a, um, you know, great opportunity to showcase them in insurance and financial services. Um, and yeah, it wasn't without risk, but what was the risk?

27:16What was the risk that your team would say? What were they nervous about? That we would make commitments on the transformation that I didn't feel like we were prepared for.

27:25Joubin Mirzadegan:Got it. That it would like, um, accelerate a timeline that maybe you're not ready for or over promise a partnership that maybe it's hard to deliver on. Yes. That was, and then also, am I going to get, you know, two great tech leaders in the world to be able to, you know, bring it home for what it means for AIG and what it means for the stakeholders in the audience? And they did a fantastic job. But, you know, depending on the questions, depending on the answers, you can go down a variety of different ways. For sure. And by the way, those two are not afraid to speak their minds. No, they are not.

28:01At all. And the other unknown fact, which I found out that day, and I never even thought of asking this question, they had not met each other before that day. They're very close now, but they met in the green room. Come on. And so I knew I had all this complication of the topic. I had the complication that as the first investor they've done 10 years and we're introducing what we're doing with AI and data ingestion and workflow and all the commitments that we want to make. I didn't think to ask if you guys met before.

28:36Joubin Mirzadegan:These are also not like big company guys. They say anything. Yes. Like Palantir's invest. I mean, you've seen the videos. They're notorious for saying anything. Like where you as a public company CEO are like, he said that. Okay. Okay. do you think that maybe the inhibitions or reservations of your team made you want to do it more because like in the back of your mind the fact that they were nervous isn't that kind of the point that you wanted to make yes it's it's an excellent question um over the course of many many years i've learned and i've experienced if you have unanimous support in terms of a transformation, you shouldn't do it because it's not bold enough.

29:26Like, I mean, if everybody, oh, that's a good idea, what you're trying to do makes total sense and you have consensus in the room, you're probably not going far enough. I mean, you need to have a little dissent. You need to have a little bit of apprehension at what makes, you know, the team thrive better, but also knows that you're kind of pushing it a little bit in terms of change.

29:49Joubin Mirzadegan:And can you bring me into the room don't tell me the players but just tell me like um in this conversation where you're talking about um alex and dario coming in investor day by the way i imagine at a company like aig you tell me but like investor day is a very sacred day like it's like do not mess with investor day you know like this is tried and true it's the same every time say as little as you can and then get past it. I imagine that's like generally the tenor. Well, you have a lot to lose. I mean, and the other thing too, which is very nerve wracking is that when you do earnings calls or do other investor presentations, they tend not to be when the market's trading.

30:36Like, so like when we do our earnings calls, 8.30 to 9.30, you finish at 9.30, market opens. It could get like nerve wracking for the team if you're starting to see the stock trade down when you're presenting. You know, because you have a three to four hour presentation that's going to be in the morning of the market trading. So, you know, there's just a lot of things going through people's minds.

30:59Joubin Mirzadegan:Do you see it? I saw it. Do you see the ticker when you're presenting? No, but as soon as I saw my phone, I looked to make sure what's been the reaction and, you know, how are people viewing it. You know, it's so hard not to look at it. But no, I told them it doesn't matter. Like, I mean, this is going to be a lot for people to digest and how they trade in the day won't matter, but it's still nerve wracking. I think that what was in the room is just a lot of discussion around, is this the, like, we're not a tech company. Is this the impression we want to leave? We haven't really begun this process to get it scaled through half the company yet.

31:40So it's not a proof positive yet. None of us know those two. I mean, you know, what are they going to say about AIG?

31:47Joubin Mirzadegan:And can I ask you, like, sorry to interrupt you, but I'm so curious about this. Like, how much of this is legal? Like, I imagine a company like yours, legal has a very prominent voice. And you know what's interesting for you? You have to be very judicious about understanding when you're taking too much risk and you should listen to legal. But then there's other times where you have to run the business and you cannot listen to legal. The lawyers will slow everything down. Is that fair? Well, I would flip it on the other side, which is if you have legal involved in the process from the beginning, you actually don't experience that latter part because you're debating specific issues along the way.

32:31And if they're learning and we are taking in feedback, I think the process becomes much better. And we had the team involved. Yes, there are times when you have to make a business decision, but it's great to get that input from legal. And if you work as a team, it doesn't usually become binary. It usually becomes a discussion, a debate, and you get to a really good outcome. Can you tell me about maybe how frequently does this happen where you look at the team and you say, if I'm right, get behind me.

33:15Joubin Mirzadegan:And if I'm wrong, this is on me. How frequently does that type of conversation happen? Not all, because if you do it all the time, it becomes a environment where you're making all the decisions and, you know, who's going to hold me accountable to myself. I think it really, for me, it always has to be when you're doing something transformative or where there's some reluctancy in the room, but I have massive conviction this is the right way to go. And how often does something transformative like this happen at a company like an, Angie's what, like he was born in the 1920s? 1919. 1919? Well, technically, I mean, again, this is part of the financial crisis.

33:54The entity that was formed in 1919 is not part of AIG anymore.

33:57Joubin Mirzadegan:So yeah, around that. But it's been around a long time. And as I said, these discussions, they don't come up often. But what we try to talk through is that you can't keep the external world, you know, sort of frozen in time. It's moving fast. And so if we're not moving, if we're not adapting, if we're not trying to find ways in which we can improve the way the business operates while recognizing what's happening in the external environment, you're just going to fall further and further behind. and so that's i try to educate the team as much as i possibly can because you know like when we come here like we travel not with entourage but usually with five six people uh just because it's great for them to learn it's great for them to hear from you and your colleagues and you know we go to other you know tech companies seeing it live is different than you know having it reported back to you and so like bringing them along for the journey i think has been you know really important and very beneficial to AIG.

34:56And why did you pick, why did you pick Dario

35:01Joubin Mirzadegan:and Palantir to sit next to you? I have, it's not a rule, but it's a, um, it's something that I try to drive the company, um, with, with this sort of understanding, which is if we're going to do transformative work with a partner, we need to be aligned at the top of the house because you need commitment. You need resources. I'll give you some great examples. Now, I've known Alex a lot longer than I've known Dario, but Alex will be bold in resource deployment for us because he believes in what AIG is doing. And there's been many cases. He's deployed some young engineers that sit like outside my office when I'm in New York and we go into conference rooms.

35:44I try to show them what I'm solving. They go away. They'll crank out different agents within 24, 48 hours. they come back. We've found unbelievable solutions because of that partnership. Palantir, ananthropic, you can go down multiple levels and they know what AIG is doing. We have a lot of connectivity points. So the reason why they were on stage with me is one is I had a really good relationship with both of them, different, but both very good. And their organizations were behind us. Um, and I felt very good about the commitment. The last thing I wanted was to get somebody on stage for the star effect that had no impact on AIG in the future.

36:31And then it all fizzled out. I knew Anthropic and Palantir were going to drive outcomes for the company.

36:37Joubin Mirzadegan:Did you see the, uh, leaked revenue report of how much Anthropic just added in the last few weeks? No. I think it was 5 billion. Yeah. 5 billion? Yeah. It's amazing. Last few weeks. Yeah. It's incredible. It's insane. It's insane. Where do you think this will be? Like, there is a lot of talk, especially in our corner of the world, that this technology is going to have profound impact on traditional businesses. Okay. Let's just say like you can represent traditional businesses in this case. Do you feel like we are like over promising here? Like, do you think that we have our, you know, tinfoil AI hats on and Silicon Valley is doing this thing again where we beat our drums and it's like a bunch of bluster and it's so that we can deploy more capital so that we can raise new funds, you know, or are you, do you buy it?

37:54Joubin Mirzadegan:And do you see the way that it's starting to permeate through the organization? Yeah. I'm just like, yeah. Give me your like honest read. I 100 % buy it. This is not, But it's for me, like learning what the capabilities are, the speed in which the advancement is happening and what you could project for the next 12, 24 months. It is it is for real. I mean, it's incredible what large language models can do today. And, you know, I look at the way in which there's all sorts of benefits. One is the quality of data, the ability to extract that data, the ability to actually, you know like the coding happens so fast today that what you can ask the llms to do generates enormous value and then you have the element of you know where we are is just thinking through the orchestration of how you actually have you know a environment where you're managing employees you're managing agents and you're managing you know data that comes directly into a digital workflow today that needs neither.

39:21Like how does that look in the future?

39:28And I am unbelievably impressed with the progress that's been made over the last year. And I think even if we froze time now and didn't make the progress, let everybody else catch up, it will still transform businesses. It just has to. I mean, like the way in which you can pick any element of like insurance value chain, banking value chain, manufacturing value chain. And you can see what the power of having this orchestration done with agents in the organization, you're going to get incredible insight, more accuracy, and the speed to execution is, you know, 10 times. Now, how you operationalize that, how you actually get it into the organization and realize it as a different business model, that is a challenge.

40:20Joubin Mirzadegan:Well, and this is what's interesting. Like we have been for the past couple of years, my observation is that basically your board comes to you, you go back to the board and everyone's like, AI, AI, AI, great. Now you've just like basically unlocked a bunch of budget, okay, where you're like, go experiment, go do a bunch of things. Then that pushes down through the entire organization where everybody feels free to like unleash themselves into doing stuff. Okay. That has happened for a while. I wonder how long does that last? Like, uh, how long do you want to give the organization this like almost endless, like, hey, we don't care about your token budget, spend as much as you want on Anthropic.

41:02Joubin Mirzadegan:Like at some point the chickens have to come home to roost here. It seems to me that's already getting the belts being tightened a little bit. There's not like a million flowers blooming at AIG, I suspect. You're probably picking the ones. But how do you think about that? You have to bring, there's multiple important points that you made. I mean, you have to bring employees along as to what you're trying to do and educate them on, you know, sort of use of LLMs and how that can benefit, you know, their job and help train the large language models to make us more effective. So that is going to be an ongoing journey and one that's really important.

41:42Where you started was with the board of directors. And you need to have a board that's supportive and knows what this is going to mean to business over time. And so we've been, we're taking our board out here in June, and gonna spend time here to make sure they're seeing what we're seeing. And they all come from, you know, different backgrounds. Some are very steep in tech, some are very steep in financial services. And so we have like a great discussion around what does it mean, you know, for AIG in the future? And we keep presenting, we keep bringing them along the journey, and we have enough humility to say, this is what we know and this is what we don't know.

42:22So I think that's been very productive in terms of us making the progress that we're making. And to your point on tokens and the expense and what needs to be actually done in an organization, you need to be very specific on the business purpose or the functional purpose of what you're trying to deliver. And for us, it has been in an underwriting workflow is how do you get an underwriter to get as much perfect information as possible in a fraction of the time and then use more compute to be able to use models, shape your portfolio the way you want to. And we talked about earthquake or, you know, different types of perils that affect organizations.

43:05How do we actually deploy our capital differently over time? And so you have to have that framework. And that's what we introduced at Investor Day a year ago. But it's advanced so much that I think there's a lot more we can do in cycle time, data quality, and getting it to, you know, the underwriters in a fraction of the time to be able to handle more capacity.

43:26Joubin Mirzadegan:Maybe switching gears a little bit. But if I could like, if you could draw me your favorite qualities in an executive, like where you're like, Jubin, like if they have nothing else, this is my love language for an executive. What are those things? Well, if I can use the assumption that they're very good at what they do for a living, you know, so if it's a competence. Yeah. In their roles, I would take collaboration and alignment over almost anything else. because in order to get a company to change, in order to get a company to lead, you have to have alignment. And, you know, having an executive team that doesn't necessarily align, that doesn't necessarily believe in a direction that you're going, you're not going to ever get there.

44:15I mean, it's just, it's too hard because, you know, they go back to their respective roles, they have their respective meetings, they have their respective communication. And if the company is getting confused as you go down, you know, a couple of layers into the company, you just have this misalignment, which doesn't allow you to move at speed and quality. And so that's always been really important to me in terms of trying to build teams. What else? intellectual curiosity, learning, um, and not getting stuck into, you know, the way things may work today. Like, how do we think about ways in which they can work in the future?

44:53But that is through probing, um, and, you know, through respectful debate, you know, within a team environment. And that, that has proven to be, you know, very valuable for, um, for progress as

45:07Joubin Mirzadegan:One of mine is availability. Like the best ability is availability. I like that. I don't know why, but there's just something around like me being able to feel like I am accessible, therefore you are accessible. I don't know how else to say that. Yeah. Does that make sense? It totally makes sense. And maybe there's just something around like, I have this like deep fear that if the pace and rhythm of the business is not fast enough, like we're just going to die. And therefore I feel like everybody needs to be available because we're trying to move the business along. Yeah. I don't know if that applies to you or your world at all, but like, I would certainly say that if you were asking people that have worked closely with me, they would say Jubin definitely likes it when he calls you around, you know, I don't know how else to say it.

46:10You and I are like cut from the same cloth. I mean, there's many days where on the weekends I'm waiting, you know, when's it going to turn eight o 'clock? When's it going to turn eight o 'clock so I can make some calls because I don't want to be too invasive at seven.

46:21Joubin Mirzadegan:This morning, I'm driving down here, 7.15, and I'm like slacking people. Hey, are you awake? Oh, I'm driving because I got to get a hold of them, but I don't want to like, I don't know, maybe they're brushing their teeth or something. But I'm like, and in the back of my mind, I'm like, I want you to be awake right now so I can call you. Is that unfair? No, it's not. You're talking to the wrong person, though. You and I are totally aligned because there's a - Like you're playing a big league game here. Exactly. There's a responsibility when you take these big roles. They're not entitled. They're in responsibility.

47:00And, you know, the world is moving fast. And, you know, the requirement is to, you know, I always say, like, everything's got to be in motion. Everything's got to be in motion.

47:11Joubin Mirzadegan:Can I ask about your, like, how you organize your work life? How do you, do you work every day? Yes. Seven days a week? Yeah. I mean, like Sundays or, you know, there'll be times on the weekends where, you know, I have personal commitments or have to do some other things. But by and large, I'm never off. Has it been has it always been that way? Is that is that a new expectation as the CEO? I think at AIG, I've always worked hard. I've always been, you know, available. But the pace at AIG has been, you know, next level just because of the job and the complexity. Do you go to the office every day?

47:48Um, not on the weekends, but I will from time. If we have a board meeting coming up, I will, you know, I'd prefer to, uh, you know, prepare, you know, in the office, but, but no, I, I, I would prefer to be in the office every day. Like I don't, working from home is hard.

48:02Joubin Mirzadegan:Yeah. So many distractions. Right. Um, and I prefer, uh, being in an office if I can. And are you an early riser? Do you have calls in Europe that you have to take? I, I tend to get up. Um, yes, I'm an early riser and I tend to try to, you know, a lot of our businesses in the UK. So no matter what time you get up, there's things in motion there. So if you can get to them before their lunch, which would be before 7 a.m. Eastern Standard Time, that's important. So you're up at 5, 5.30? Yes. And when you open your phone in the morning, is it like every day like, oh, my God. Is, like, do you have dread when you open your phone every day?

48:44I'm being serious. Yeah, you have no idea what's coming. I mean, you just don't. And so, you know, my tendency, so I do not have the phone in my bedroom ever. Oh, is that true? Yeah, I never. So you have like a traditional alarm clock? I have a traditional alarm clock. And I still have landlines. If somebody needs to get ahold of me, you know, that phone is in the bedroom. So I'm available, but I don't have, I don't want to test my discipline to have a phone next to me when I'm sleeping. So I will get up, go get it in my office, kitchen, wherever it is, charging, and then just like, you know, assess what's maybe happened, you know, overnight or, you know, international and then start to mobilize.

49:28Joubin Mirzadegan:And you have a landline like the bat phone that I assume only certain people have that number. Yes. And they know if you call this number, better matter. No, I mean, just like. How often does that number get called? Never. Usually. Like, unless there's like an actual natural disaster. Yeah, something happens at three in the morning, you know, that somebody needs to get a hold of me. But no, I mean, that's rare. I don't even know my number. I always have to, like, I give it out. But as I said, what's your number? It's like, I'd have to look it up. And then do you put your phone away, I guess, obviously, like sometime before bed?

50:04Yeah.

50:06Joubin Mirzadegan:Usually half hour before their months. Half hour before bed. And do you go to bed late? No. No. I mean, usually nine to ten. Okay, like reasonable. Yeah. Do you sleep well? No. Is that like, uh, genetics you think, or just because of the stress of the job? I just think it's hard to shut your mind off. Shut your mind off. Cause there's so many things you can, you know, get the phone away from you, but there's still so many things from the day, so many things that are coming up. Um, you know, so many issues that you want to, um, you know, iterate a little bit in your brain. And, and so it is hard sometimes to shut that off.

50:39when people ask you if you uh have fun doing your job do you answer do you answer that you have fun no me neither no i don't but could you imagine not doing it no no i i love the work the team it's it's enormously um gratifying to see, you know, sort of the collective work done and achievement. That is amazing to watch and how people feel proud of the work that they've done. And, you know, you've had an opportunity to lead that. But it's hard work. It is hard work to transform businesses, to get, you know, people aligned and to get, you know, an organization to not only improve its absolute performance, but also relative performance and invest for the future.

51:36Do people ask you, if this isn't fun, why are you doing it? Do you ask yourself that? I don't get asked much. No, I don't ask myself it because I know what these jobs entail.

51:51Joubin Mirzadegan:Yeah. You know, if you're going to commit to being, you know, a leader of a company, it's a major sacrifice. And so with that comes a lot of responsibility and a big commitment. So I don't ask myself that. I don't. Like when executives are going through the ranks and you can tell they have the same aspiration as you, do you ever sit them down and say like, are you sure? Like, are you sure? Like, do you want me to tell you what this job really is? Well, I try to explain that it is like, you know, until you walk in someone's shoes, you don't really know the roles. And, you know, things change as you get more and more senior because responsibilities, the scope, the lateral requirements.

52:34and so just making sure they have an understanding. But also I have to be with, you know, the team, a good assessor of, you know, there's been some very good people throughout my career that have been very good at what they needed to do at that point in time, but we're not going to be very good for what was needed in the future. And so like, you know, it's not all linear progression just because you do a great job, you know, in your role. And I always say, you know, there's times when and use a like soccer or football analogy is like, you know, the fullback wants to be the center. The center wants to be like the goalie.

53:09The goalie wants to be the wing, you know, but I think sometimes you got to get people to understand, including myself, like you're really good at certain things and people are very good at other things and bringing that together is, is what makes, uh, you know, a great functioning organization.

53:26Joubin Mirzadegan:Yeah. But when you find those rare exceptions that can do it all. Throw it all out the window. Do you agree with that? Like comp, it doesn't matter. Give them more than they can handle at almost all times. Yeah. You want to, I always say, um, with people that have enormous potential and you want to put them in the deep end, you know, and have them walk the, you know, sort of tight rope, you just got to know where the safety net is, you know? And, and I always say sometimes even with me, like, you know, do you want the safety net at six feet. So when you fall off, it doesn't really matter. Do you want it at 30 feet where you fall off and you get scared a little bit, but you get caught or is it a hundred feet down?

54:09You don't know if it's going to, you know, catch you or not. So like, where's the safety net is what I say. Like, where are we like, what, what's the level of safety net we need here? And, and, but yes, I mean, you have to put people in that sort of pressure to professionally grow. And, and, and there's a lot of people that step up and really, really take the opportunity.

54:29Joubin Mirzadegan:Well, I appreciate you doing this. When you step aside and you're not the operating CEO anymore and your email quiets down, do you think that, is it going to be a weird feeling for you when the adrenaline is gone? Yeah. Do you almost dread that day? I don't know that that day is going to come because, you know, I want to be, it'll be in a different role. That'll give me capacity to do different things. And, you know, whenever that transition period is, you know, I hope I have the opportunity to go deeper into, you know, parts of the business that are going to be helpful for the organization. So I'm not going to see you on like TMZ and St.

55:15Joubin Mirzadegan:Bart's partying it up, getting bottle service? You'll not see me there, no. I appreciate you doing this. Thanks a lot. Really fun. It was a really great conversation. Thank you. I wrap all these the same. When you hear the word grit, what do you think of? I think of hard work. I think of determination. I think of making a difference and not only preparing a team to win, you know, because people have the will to want to win. It's a Bobby Knight. But do they have the will to prepare to win? and so that's what I think about when I think of grit you're a great answer thank you thanks a lot that's it for now if you liked the episode please leave us a review or go back into the archives where we've done more than 200 episodes with some fantastic folks this podcast is a Kleiner Perkins production and I'm Juven thanks for listening