Artificial intelligence represents a double-edged sword for the risk transfer industry

Recent developments in artificial intelligence (AI) in the re/insurance industry in 2017, such as the  alleged job losses at Fukoku Life Mutual and the  rise of AI in the insurtech space, has sparked a series of discussions surrounding both the potential and concerns arising from this phenomenon.

Many studies reach similar conclusions around the automation of jobs, with around 47 percent of total US employment is at risk of computerisation, based on a report from the Oxford University.

A Bank of England study published in 2015, Labour’s Share, suggested that up to 15 million jobs were at risk of being replaced by a robot.

Intelligent Insurer spoke with an AI specialist at PwC, Anand Rao, who examined some of the potential that this medium has in the industry in terms of presenting new possibilities and sophistication as the more manual tasks in risk transfer could be automated in the future.

While he was very positive about the use of AI as a tool for the industry, he said:  “There are a few concerns surrounding security—privacy, confidentiality of individual-level and company-level data—and also any bias behind the decision-making of the machine itself,"

Furthermore, Intelligent Insurer also sent out a survey on AI, asking whether its readers see it as an opportunity or threat to their job or business.

The poll showed that 89 percent saw it as an opportunity and 11 percent perceived it as a potential threat, many of them citing AI's potential to free up creative talent and allow more analyses.

The use of AI in the re/insurance industry is not unknown, with many insurtech companies creating solutions that offer a faster, more convenient way to do business.

For a wider snapshot of artificial intelligence in the re/insurance industry, please click here.

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