When discussing the use of artificial intelligence in insurance, there is often a glaze that develops in the eyes of many an underwriter. Is it lacking the understanding of what it is? or fear of losing ones role to a computer?
These types of statements make many wince as this is a large amount of payroll that could be removed or better allocated:
“…We’ve been hearing some scary stuff about AI. For instance, that it is on track to kill some 2.5 million financial jobs by around 2033. Should our insurance professional readers and listeners be worried about this?”
What this article misses the point on is predictability and accuracy as a result of AI versus the replacement of humans for computers. The machines may be dead on in their predictions, but someone still needs to cull the data, interpret the data and most importantly give advice based on the data. Too much in insurance is done based on the subjective – instinct and intuition. The true pros know there is an art and science to underwriting… and AI makes the science that much better to allow the underwriter more time in evaluating the art —
Why Insurance Industry Should Embrace, Not Fear, Artificial Intelligence
Artificial intelligence isn’t the cold, job killing disruptor many fear it to be – at least it won’t be for many years to come, says Jeff Somers, president of Insureon.
Insureon, a bit of a disruptor itself, is a national online platform for small business commercial insurance.
According a recent report from U.K.-based Autonomous Research LLP, 2.5 million financial services employees in the U.S. are exposed to AI technologies.
And AI will be hard to resist for organizations looking to cut costs. AI represents a potential cost savings of $1 trillion to U.S. companies across banking, investment management and insurance, according to the report.
Somers, however, believes reports of the demise of insurance agents and brokers are premature, and that AI machine learning can actually benefit agents by augmenting what they are doing and making them more efficient and effective so they can spend more quality time on the most important tasks.
Somers talked to Insurance Journal to offer his thoughts on AI. This has been edited for clarity and brevity.
Insurance Journal: We’ve been hearing some scary stuff about AI. For instance, that it is on track to kill some 2.5 million financial jobs by around 2033. Should our insurance professional readers and listeners be worried about this?
Somers: When I think about artificial intelligence and machine learning, I think about it in three waves, where the first wave is really about automating simple tasks. The second wave is effectively what I think of as an AI assistant wave. The third wave is the AI and machine learning technology taking the place of an expert. The expert wave.
I think the good news for insurance professionals is that most of what they do today is in that third wave. Which is not to say AI and machine learning won’t have an impact on their jobs and how it might help and provide experiences and service to customers, it’s just that this idea that they’re going to be replaced anytime soon by a platform like that is, I believe, probably a little misguided at this stage.
IJ: Isn’t it inevitable that we will all be having less and less contact with real humans in the future?
Somers: I think what’ll happen is that you’ll find that you’ll be in a situation where, as a customer, probably what matters most is getting to the information and answer you want quickly. In the past, the best way to do that certainly has been through talking to a person. As systems and platforms develop more data, get more intelligent about what customers are asking about, and then use technologies like AI and machine learning to guide customers to the right answer, I think that customers will become more and more accustomed and comfortable with dealing with a non-human, so long as they can have a great experience in getting to the answer they need.
IJ: How do you think AI will benefit the industry?
Somers: I think, to start with, you’ll find that AI and machine learning can automate some of these simple service tasks that might consume a typical agent or broker’s time today.
So, when you think about why a customer may call in, whether it’s for a certificate, whether it’s because they have a billing question, whether it’s because they want to provide some new information about their business for example, these are all theoretically conversations that could take place with a chat bot, for example, that could provide that customer with an experience that would allow them to either again get at that answer they’re looking for quickly, or provide information quickly that would then help the agent really focus on what they do best. Which is the expertise around understanding the markets, the services, the products, the carriers, and bringing the right solution back to the customer based on the information the customers provided to them.
IJ: Do you think AI will ever be smart enough to replace an agent, or a claims adjuster, or an underwriter or a president?
Somers: Forever is a pretty long time. So, the answer is unquestionably, “Yes,” it’s just a question of how long it takes before that actually happens. I think, again, as with most industries, what we’ll find is that the technology will allow us to step away from the tasks that are less value-added than other tasks that we might be able to provide on behalf of our customers.
So, if there’s a lot of time being spent by an agent, by a broker, by a president today on certain tasks that can be automated, that frees up that person to spend more time on the tasks that can’t be automated and those that are probably more complex and require that human touch, and frankly, that human brain to go get done today.
IJ: Anything else you’d add?
Somers: I think it’s an exciting time for sure. It’s not unusual when you see a new wave of innovation like this coming along to have that sense of concern or worry about what it might mean and what change might come with it.
Generally speaking, again, as a civilized world, we’ve been able to embrace these kinds of innovation changes and allow them to accelerate our growth and development. If that’s something we can do here, this is an incredibly powerful technology to harness and to help us evolve essentially.
But it does require some thought and it requires us to step into it with the understanding that we are going to have to live with some disruption, some change to some of the things we may have grown used to today. Ideally, when we come out the other side, it’s a better, safer, more interesting world that we live in as a result.
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