Insurers embrace Artificial Intelligence triggering fear amid staff

Insurers are using artificial intelligence (AI) for example to increase efficiency in the claims process raising potentially unjustified fear among staff of being made redundant, executives noted during a roundtable organised by Intelligent Insurer.

Recent developments in artificial intelligence—in particular the creation of so-called ‘self-learning’ machines, are opening new opportunities in the re/insurance world.

Japan-based insurance company Fukoku Life Mutual, for example, invested in a new AI system based on IBM’s Watson Explorer, which is alleged to possess “cognitive technology that can think like a human”, and is purposed to calculate payouts to policyholders.

AI can be applied in claims handling, speeding up the process.

“We’ve trained AI to look at photos of car damage and make an assessment of the damage, which is a step that is adding a lot of friction today in the claims process,” said Adrien Cohen, co-founder of Tractable, a London-based start-up offering an automated audit claims product. “You can think of the same thing in property.”

For staff directly involved in the process, the introduction of AI technology is often perceived as a threat. Perhaps for a reason. The technology employed by Fukoku Life Mutual allegedly could eventually replace more than 30 of its employees.

“If you’re a desktop engineer, the first reaction you’re going to have is that it’s scary,” Cohen said.

However, for the management, AI may be essential to keep up with competition.

“If you’re the claims director or the C-level, you’re thinking about efficiency and making sure you have consistency in your claim appraisal process,” Cohen noted.

But the inclusion of AI in re/insurance does not necessarily mean making staff redundant.

“You can’t automate the entire value chain. There’s a lot of education required around who is using this technology and how it is supporting and augmenting your team rather than replacing your team,” Cohen noted.

Lloyd’s of London, which has been experimenting with AI within the market, has made similar experiences.

“When you engage the people who are potentially impacted, and they start to see the results coming through they get really excited,” said Craig Civil, head of data innovation at Lloyd’s.

“They realise that a machine can actually take away the drudgery, and they can focus on the more interesting and complex questions from the market that makes their job more interesting and fulfilling.”

This is just a snapshot of a wider discussion on AI organised by Intelligent Insurer. If you want to find out what for example Will Thorne, innovation leader at The Channel Syndicate or Ben Canagaretna, group chief actuary at Barbican Insurance Group have to say about the application of AI in re/insurance, please click here.

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