AI, Insurance & Consumers — Worries all the way Around

Artificial intelligence is moving into all parts of our lives. Insurance is no exception. AI is slowly but surely moving into all phases of insurance. And like other industries, it is reshaping what many insurance workers are doing.

A study published in the Harvard Business Review by Evercore ISI and Visionary Studio, looked at 160 million jobs in the U.S. to predict how AI is altering the workforce. Nearly every job is now exposed to AI in some way but it is the desk-based, highly-skilled professions that are going to be most impacted.

That leads us to insurance.

The authors say the greatest strengths of AI are data synthesis, summarizing facts and information and the recognition of patterns. And it plants those strengths squarely on the desk of the white collar worker.

For insurance, AI will be used for policy documentation, support for underwriting, risk analysis, claims triage and compliance reports.

The Evercore study concludes that close to 80% of workers in the U.S. will have at least 10% of their daily chores exposed to large language models. Over 19% will see half — or more — of their jobs being automated by AI. 

These are the jobs most at risk by AI:

• Data entry and processing clerks
• Claims intake and administrative support staff
• Customer service and call-center representatives
• Payroll and accounting clerks
• Paralegals and legal assistants
• Market and business analysts
• Junior underwriters and risk model analysts
• Technical writers and documentation specialists
• Basic-level programmers and testing staff
• Compliance and policy reporting coordinators

What this ultimately means is that most of the jobs people begin with in insurance are likely to be replaced — if they’re not already — by AI. The process is also being used in ways that an ordinary human cannot.

Allstate is using AI to go through thousands of photos in just a few minutes to assess the damage to a vehicle after a crash. State Farm is using AI to set up algorithms to predict potentially fraudulent claims before an adjuster can review them. MetLife is developing an AI program to create a summary of customer interactions to speed up the documentation for policies.

The goal for these processes isn’t to cut jobs but it is to speed up business and make it more consistent. Claims that used to take two days to validate could now take two hours.

While it might be a positive for insurance companies, AI working with insurance is a big concern for consumers. A survey by the home business answering service, Answering Service Care finds 36% of the people they talked with worried that AI bots will decide whether an insurance claim will be accepted. 

Logan Shooster, Answering Service Care Vice President, said there is more:

• 80% of us want to know if we’re talking to AI or a real person
• 37% say they’d no longer trust a company that hides its AI use
• 15% say they’d forever boycott the brand

"Quietly swapping claim handlers for chatbots doesn’t just alienate customers, it de-skills licensed professionals, depresses morale and accelerates attrition by stripping judgment from the job," Shooster noted. "The path forward is transparent policies and live, licensed people on the line for claims with any automation kept behind the scenes and a one-step path to a human every time. Insurance claims are human moments.”

There’s more:

• 81% are convinced that AI is being used secretly by companies
• 60% are concerned that AI is radically changing sensitive business being done by banks and healthcare companies
• 62% of small businesses worry customers will no longer do business with them if they find out their calls are done by AI
• 43% worry about the long term trust of such a discovery
• 71% of consumers worry AI voices are being used and are not being disclosed to those accepting a call
• 62% of small businesses fear financial losses if people find calls from them are from AI
• 41% are particularly worried that banks and financial institutions are using AI and not disclosing it
• 34% think tax or government helplines are using AI

Generation Z — those born between 1997 and 2012 — are the most at-risk of being replaced by AI but don’t worry about artificial intelligence stealing their jobs. They see AI as their friend, and, as being helpful in their career goals.

• 50% don’t see AI as a threat to their jobs
• 69% see AI as helping them with their workflow
• 45% say the slow adopting of such technology is the real worry

Tanner Hackett is the CEO of insurance expert firm, Counterpart. He said so far insurance has not been negatively impacted by AI.

"AI is transforming industries across the economy, but the insurance sector has staved off technological change for decades, leaving systems and thinking far behind other industries," Hackett said. "As insurance scrambles to catch up, young professionals have a unique chance to establish themselves as indispensable leaders in an industry undergoing complete reinvention, where AI expertise has the potential to trump traditional tenure."

The Evercore study contradicts Hackett’s assumption. The junior roles that many people get to begin their insurance careers are going away. They are like apprenticeship jobs that have helped beginners for eons. Underwriters in the future might come into the business fully trained in the science of data but they’ll miss an education in areas like risk, regulation and human behavior in a claims situation.

Evercore’s report says insurers are starting to see the negatives that are sitting around the edges of all of AI’s positives. Many are introducing programs to teach employees how to use AI.

Not totally trusting companies to do the right thing, the National Association of Insurance Commissioners (NAIC) has put together a working group on the ethical use of AI and how algorithms ought to be applied to pricing and claims handling.

Source link: PropertyCasualty360.com — https://bit.ly/4hM39Qy

Source link: Insurance Business America — https://bit.ly/47pjHdG