by Dr Matthew Connell, Director of Policy and Public Affairs, Chartered Insurance Institute 

Industry View from

Why humans are an essential ingredient in the AI revolution

It is fashionable to conclude that, as the technological capabilities of artificial intelligence continue to expand, machines will make humans superfluous in many sectors – insurance being one. The popular theory is that machines are intrinsically more reliable than humans and have the ability to work around the clock, rendering them more cost-effective than the average human on the payroll.


There may be some truth to this sweeping prognosis – the extent of which only time will tell. But in insurance, the importance of human interaction will not be rendered obsolete by advances in AI. To the contrary, insurance is a product which, by its nature, is purchased but often only used after an accident or loss. In order to maintain and grow public trust in the insurance profession, it is important that the public feel reassured when making a claim – especially during what may be an emotive time. Most people would agree that human interaction typically provides more reassurance than an automated machine.


That is not to say that AI will not have a greater role in insurance than it does currently. But although some tasks will become fully automated, AI will not usurp the need for humans across the whole of insurance.


One analogy can be found with the food industry. In Britain in the 1840s, 22 per cent of the population worked in agriculture – today, the figure is less than 1 per cent. However, it has not been completely automated: in 21st century Britain, for every person working in agriculture more than three people work in restaurants.


While the future of AI in the profession is based to a large extent on speculation, there is no doubt that the UK’s demographics are undergoing a seismic shift. With the average life expectancy in the country expected to hit 90 in the coming decades, the insurance sector must, like others, adapt to growing numbers of over-75s. As the onus moves from the state to individuals to plan for their long-term care needs, the insurance profession has an opportunity to play a leading role in addressing one of the key societal issues of our time. Technology – such as the Fitbit – is already playing a role in shaping some health insurance policies, with provider Vitality providing an incentive to customers to pursue a heathier lifestyle in exchange for lower premiums.


Advances in medical research, and the move towards the digitalisation of health records, can allow for health insurance premiums to be more tailored to the unique requirements of every consumer. One danger which providers and consumes alike must be acutely mindful of is the potential impact on consumers who pose a higher risk. We must work with all sectors of society – including government and NGOs – to make sure that no one is excluded from protection, and if necessary, we should create public-private partnerships to make that happen.


These kinds of complex and sensitive issues underline the importance of the human touch in insurance at every stage in the process.


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