Co-bots, not robots: the next big step for AI in insurance
Many have proclaimed that 2017 will be “the year of artificial intelligence (AI)”, with a 300% increase in investment in its technologies predicted compared with 2016. Start-ups with AI at the core of their business in particular will be looking to benefit from this surge in investment capital, as they did last year when 550 raised $5 billion in funding.
Oisin Merrins, editor at FinTech Futures Series (Banking Technology’s sister company), explores.
While efforts at embedding human intelligence into machines has a long history, recent years have seen a rapid evolution of the technologies captured under AI, spurred on by decreasing costs in computing power, advances in memory capacity and cloud computing, and the necessity borne of the generation of evermore quantities of structured and unstructured data.
Naturally, the ability to quickly and automatically process this data and derive actionable insights is creating a lot of excitement across multiple industries, yet there remain a number of obstacles to AI adoption; many business leaders cite the lack of a defined business case or required skills, or the need to first modernise internal data management platforms.
You want to automate what?!
Advances in AI are also fundamentally challenging assumptions about what is automatable: repetitive, rules-based processes are no longer the sole focus as AI opens up the possibility of automating activities that require knowledge and experience. Predictably, this has led to anxiety around the wholesale replacement of employees by machines, anxiety that can in part be challenged by a shift in focus from the automation of occupations to the automation of activities, where processes are transformed and roles are redefined rather than made obsolete.
That machines can complement the capabilities of employees, affirming the value of expertise while enabling them to dedicate more time to higher-value work, will soon become clear, first in sectors such as financial services, where automation will be mostly software-based. For many, then, and in contrast to well-reported events in Japan, the near future will be defined more so by the arrival of co-bots in the workplace rather than the sudden and dramatic disappearance of colleagues.
What’s so special about insurance?
Data rich and characterised by routine processes, the insurance industry is ripe for transformation using artificial intelligence, and its potential cuts across all lines. The ability, for example, to generate a continuous stream of insights through the automated analysis of both structured and unstructured data could provide a clear view of shifting customer needs at a level of granularity not possible in the past.
However, in order to arrive at this point, insurers must align themselves with AI’s rise from a cultural, technological, and organisational perspective: carriers will require an integrated and fully digitised environment, the capacity to gather and effectively manage data from a variety of sources, and a culture of innovation guided by senior leaders attuned to the pace of change and transformational potential of AI…
This is an excerpt. The full article is available in the April 2017 edition of Banking Technology.
FinTech Futures will hold its annual insurance focused conference, InsurTech Rising, on 16-18 October 2017 in London, with Banking Technology as a media partner.