Will AI Replace Insurance Agents?

Sheri and I watched an episode of 60 Minutes in November on IBM’s Watson, a super computer equipped with artificial intelligence, or AI. AI was merely science fiction material when I worked in technology, however, after watching 60 Minutes, it’s easy to see how far it’s progressed in the past 20 years. I began to wonder what jobs could AI replace? Specifically, could AI replace insurance agents in the not too distant to distant future? There is no clear answer if that will happen, but I think it’s interesting to look at the arguments for and against it happening.

The Case for Yes: AI is in its still in the early stages. To use a human analogy, it’s probably still in pre-kindergarten which means it has a way to go and develop its full potential. AI is currently being used in ways people may be familiar with such Siri, Alexa, and even Cortana, digital assistants on our phones, home devices, and Windows computers. In addition, Google uses Rank Brain to help with searches, Facebook and Google use it for facial recognition, and Watson is being used in cancer diagnosis and treatment.

To bring it closer to home, a Japanese life insurance company, Fukoku Mutual Life Insurance, began introducing cognitive computing (AI) to its claim department in late December. The system will displace about 30% of its claim workforce as it’s more efficient at reading medical certificates. The system will recognize disease and injury names, as well as, automatically encode and classify diseases, disasters, and surgery.

Zurich Insurance Group of Switzerland has rolled out a project using AI in the UK in their claim department too. It discovered the time to review 10, 100 page documents fell from 58 minutes on average to less than 5 seconds saving 39,000 hours of claim handler capacity annually. Overall savings is estimated to be $5 million a year. Risk assessment and underwriting functions are being evaluated to automate.

The Case for No: Accenture conducted a study where it found 7 in 10 respondents will welcome robo-advisory services in lieu of human advisors for banking, insurance, and retirement planning assistance. Of these respondents, 71% will welcome this service in when determining the right bank account to open, 74% the right insurance coverage to select, and 68% for traditional investing.

While those numbers may sound like glowing recommendations for embracing AI to replace human advisors, the same study uncovered an interesting counterpoint; nearly two-thirds want human interaction when dealing with complex financial needs and complaints.

The biggest appetite for robo-advisory services was found in emerging market countries such as Indonesia, Thailand, Brazil, and Chile with the lowest demand for these services in western countries such as Canada, Germany, and Australia. Many respondents who expressed openness to switching to Google, Facebook, or Amazon for banking, insurance, and financial products are 18 to 21 but only comprise 41% of their age category.

This indicates there is still many people who want human interaction when it comes to their financial, banking, and insurance advisors. Many Boomers, Millennials, and Gen Xers want easy access to data and a satisfying digital experience based on trusted human advise and guidance. This may mean that while AI will cut costs and increase efficiencies in service sector industries, the need for human interaction won’t go away.

I have no idea where this will lead us, but I do know it will be an interesting ride. What do you think? Share your thoughts, guesses, and experiences with me on my Facebook, Google +, and LinkedIn pages. I’d love to hear from you!

Evie Wise
Evie Wise


Evie Wise
Evie Wise

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