Artificial Intelligence and machine learning have advanced to a point where almost everyone in the Insurance industry is asking – ‘Is my job at risk?’
The answer? Nobody knows for sure. However, based on our extensive research and the daily discussions with insurance industry experts, expect to see the beginning of changes in 2018.
The impacts of Artificial Intelligence – Scaremongering or fact?
Many of the articles published in the media are highly exaggerated and designed to cause panic. However, AI and machine learning technology has reached a point where most traditional, task-oriented jobs are in the process of being replaced. Industries including Banking and Insurance are undergoing seismic shifts that demand new skills and a new approach to the workforce.
We recently spoke with Insurance leaders across the globe to get their views on Artificial Intelligence and the role it will play on the industry.
Here is what they had to say.
Mitchell Doust – Global Head of Business Development at Trov Inc.
There are huge implications for machine learning and AI that will eventuate in the next couple of years. Without a doubt, they will have a big impact on how insurers run their business.
Insurance is a data business and always has been. What’s changing is the breadth and type of data that is becoming available to insurance companies.
Insurance companies have a great capacity to analyse data and crunch numbers. Risk and pricing models and the associated skill sets are becoming outdated.
Let’s consider how an insurance company approaches underwriting and pricing. They collect a huge, historical data set and then analyse the data to create a product. Companies like Trov are very different. Using AI, we collect real-time information on how customers interact with the product. We can pull in data from multiple different sources.
So, the question we ask ourselves is ‘How can we use dynamic and real-time data to deliver better products and pricing.’
Do large Insurers have enough capability in this area? Many Insurers have closely held biases towards the historical data they collect. Sometimes they struggle to wrap their head around how they should price products for example.
The technology available will change the nature of traditional roles in claims, underwriting and actuarial. But I don’t think Artificial Intelligence will replace these roles. It is more likely the roles will continue to morph and cross pollinate.
Craig Ford – CEO SCOR Global Life Asia Pacific
Rather than replace people, we think we can support our clients by experimenting in areas like Artificial Intelligence and Machine Learning.
As an example, we are helping clients with text mining on claims to better analyse their data using robotics. This gives our clients greater insight into their claims experience and history which in turn drives better focused propositions.
In Korea, we are working with an AI partner and a specialist hospital to develop a data base which can be used to develop future products covering important conditions not currently covered.
In the US we have developed an underwriting algorithm based on the use of multiple data sources replacing traditional underwriting methods. All have been developed in conjunction with and in support of our insurer clients. The industry really is leading the charge and demonstrating that it is determined to stay relevant – and doing a good job at it too. Our people are a huge part of the success, technology is just helping us do a better job, faster.
Steven Raynor – Chief Operating Officer at QBE Insurance
Artificial Intelligence and Machine Learning is having an impact in our business; however, I see technology helping our people to do their job rather than replacing them. I don’t see the current disruption trend to be any different than what we saw 25 years ago when organisations began to digitise processes and increase the use of computers in the workplace.
We are investing in the transformation of our claims service, including the development of a new claims team in Australia, to improve the customer experience. We recognise that certain types of claims, such as householder claims, require a high level of personal contact, specialist knowledge and a rapid resolution for our customers.
The introduction of Artificial Intelligence/Machine Learning will speed up the claims process even further and we are in the process of piloting innovative technology across our business.
As an example, we have recently partnered with Risk Genius, an Artificial Intelligence/Machine Learning tool that allows the user to examine policy wordings. We have thousands of policy wordings in QBE, and without a tool like this it would be a very manual task to compare two or more policy wordings
The Risk Genius tool enables the user to instantly find the differences, which helps us create contemporary policies and release new products to market much faster. This is an example of people working with machines rather than machines replacing people.
We are also pioneering Artificial Intelligence/Machine Learning in our business to transform our capacity to assess bodily injury claims. We have partnered with an organisation to give our claims managers access to data to better manage the claim. This pioneering technology is something we have been using in the US, so we are excited to introduce this new way of enhancing the customer experience.
Finally, the views of an Ex- McKinsey Consultant who asked not to be named due to client confidentiality.
Artificial Intelligence is already replacing people in many insurers. I expect to see two waves of change.
The first wave of change will happen (and is happening) in contact centres. There is a rapid rate of adoption with chatbots. Go on any website of any tech company, and a chat bot will serve you. Most Insurers are in the process of adopting the technology.
The second wave will impact around 50% of jobs and professions.
Accounting, claims and underwriting, financial analysts, risk analysts, low-level sales, operations. This is just a sample of the roles we can expect to see impacted by AI.
Any low value, transactional role is at threat. As an example, if you are assessing low-level claims or underwriting low value, generic policies then expect to be replaced by Artificial Intelligence.
Whose job is safe from Artificial Intelligence?
As a recruitment business, Tier One People are perfectly positioned to assess the job trends. It appears, for the moment, AI is not leading to large scale redundancies.
If you are a specialist underwriter or actuary, then your job is safe for the next few years. But the technology is advancing at a rapid rate, even these roles could be performed by AI in the future.
The roles that will be safe are those reliant on interpersonal skills and human interaction, high-level claims, sales and relationship managers and executive or senior management roles.
It is not all bad news – jobs are being created by insurers.
There is huge demand for Regulatory and Compliance specialists, Software Developers and Engineers, Data Scientists, Machine Learning Specialists, Business Intelligence, Community Managers for social media, Health and Wellness experts.
At a senior level we are a seeing newly created executive roles such as Chief Customer Officer, Chief Innovation Officer, Head of Ventures, Chief Strategy Officer.
InsurTech thought leader, Matteo Carbone recently published a book titled ‘All the insurance players will be Insurtechs’
The hiring trends Tier One People observe within our Insurance clients suggest Matteo is 100% on the money in his assessment.
So, rather than asking ‘Will AI replace my job?’ perhaps we should ask ourselves ‘What role can I play in an Insurtech?’