In the past couple of years, artificial intelligence, or AI, has come to the fore as an emerging technology that will disrupt the way business is done. This has happened before, several times, since the 1980s, with AI becoming the hot new thing, only to cool off when it’s realized there is a lack of business cases.
This time may or may not be different, but it’s instructional to take a look at what its impact could be on insurance operations.
AI may not be a perfect fit for insurance companies – at least not yet. “We see the pressure to adopt robo-agents and cyber-underwriters being balanced by two key factors: complexity and emotion,” the report’s authors, Lisa Woodley and Joel Collamer, observe. They note that customer needs change over time, resulting in changes in the products they use – as well as their pricing.
“This complexity leads to confusion and ultimately fear: Am I paying too much? Am I fully covered? Am I with the right carrier? Guiding customers through their options and addressing their fears are the core value-add services that agents perform,” they state. “This is the work that machines and automation can never fully displace, and that carriers continue to value, even as efficiencies are gained through robotics and automation.”
The key, Woodley and Collamer state, is to view AI as an enabler that will extend and enhance human capabilities – not replace them.
“Use AI and other technology improvements to better support human agents and underwriters,” they urge. “It has been estimated that underwriters spend 70% of their time performing low-value tasks, such as searching, aggregating, and selecting data, and only 30% of their time in risk selection. By applying AI and machine learning to data aggregation and selection, you’ll enable underwriters to more quickly and easily identify the patterns that can help them reduce risk.”
Similarly, agents are often bogged down in minutia that can be better automated, they add. “Think Iron Man, not Robo-Agents,” they urge. “Rather than replacing employees with robotic agents, insurance companies should invest their IT dollars to enhance the performance of agents and underwriters by providing them with better data and tools. Free the humans from the mundane administrative tasks easily handled by a machine.”
Great advice that always resonates.
