Artificial intelligent (AI) is becoming increasingly more sophisticated and reliable, so much so that in some cases it has replaced humans in carrying out particular tasks.
Typically, jobs seen as suitable for automation with robots have been low paid and low skilled roles. However, a study by an Oxford University director has predicted which middle-income careers are most likely to be replaced by AI in the coming years – and the insurance industry is top of the list.
Technology in action
Insurance underwriters and motor insurance assessors are both in the top three job roles likely to be taken over by robots. In fact, a Japanese insurance company has already confirmed that it will be replacing more than 30 employees with AI which will calculate insurance payouts.
The firm believes it will increase productivity by 30% and save around 140m yen (£979,500) a year after the system is installed, with maintenance only expected to be about 15m yen per year.
Thought to be based on IBM’s technology, the AI can read and interpret any type of data, including images and video. This means it can understand things like medical certificates which are needed to determine insurance claims.
What makes it perhaps better than human, is that the technology will be able to quickly and accurately cross check information provided by customers with clauses in their policy to ensure there are no oversights. Essentially, this removes ‘human error’.
We are not yet at the point in the insurance industry where robots can completely replace humans, and in this particular case there will still be employees checking AI decisions and overseeing final claims payments.
Artificial intelligence learning to assess risk
There is a huge amount of risk data that is collected, stored and analysed by insurance companies so that underwriters can calculate the cost of a particular risk and generate a policy. This digitisation of the role makes it easy for an AI to replicate the process and essentially learn how to calculate premiums.
As a study by consultancy firm Accenture earlier this year suggested that 74% of global consumers are willing to exclusively deal with a ‘robot’ when buying insurance, it seems that this will only accelerate the transition from human to technology.
Customers in the insurance industry consider that the benefits of AI are that it is a quicker and cheaper purchasing process. In today’s world of time poor, price sensitive consumers, many will value speed and lower cost over personal customer service. Only time will tell if this trend continues and if underwriters, for example really can fully be replaced by robots.
In theory, the cost and time saving elements of using technology should be passed on to customers through lower insurance premiums – something that would be most welcome in the industry.
Still a place for humans?
If you consider that price comparison websites act as brokers for mass consumer insurance policies, yet there are still also many human brokers, perhaps there are a lot of customers who still do appreciate the personal customer service, and also the support on more complex policies.
Many businesses still want the human interaction to be able to decipher what insurances they need and what information they have to share with an insurance company for them to assess a risk.
With the Insurance Act 2015 putting more emphasis on companies to provide relevant data in a useable format, this human interaction is even more important to avoid invalid policies or penalties.
Join our 7,000+ healthcare professional members that currently receive our free newsletters. We only send only important and topical news updates about dental, medical and healthcare insurances. Read about our Membership Benefits