AI will save insurance jobs, not kill them

Across industries, professionals are wringing their hands over artificial intelligence (AI) and its supposed job-killing abilities. The insurance industry isn’t immune to the anxiety: One recent report said that artificial intelligence could be on track to kill 2.5 million financial jobs by 2033, with a whopping 885,000 of those in the insurance industry.

It’s a chilling number, but I urge insurance professionals not to believe the fear mongering. AI won’t eradicate humans from the world of insurance, no matter how advanced it becomes. Agents will continue to serve as the industry’s primary distribution force. However, AI will have a positive impact on agents’ jobs by taking over tedious tasks, allowing them to spend more time on strategic work.

The industry should focus on the benefits of digital transformation instead of disruption and predicting casualties. But to get there, insurance carriers and InsurTech firms alike must determine which processes can benefit from automation, and then successfully implement AI technologies in their operations.

Transformation over disruption

In the tech universe, we have a tendency to cry “disruption” whenever a new technology enters the market. While many argue that AI and emerging InsurTech firms will shake up insurance, true disruption would require a quarter of all jobs lost. I don’t foresee that happening.

However, these new technologies will almost certainly cause digital transformation. From cloud-based solutions to data tools to machine learning algorithms, the prioritization of the customer experience through the improvement of digital insights will fundamentally improve the delivery of insurance and consumers’ perception of the industry at large.

Much of the industry already gets it: Nearly 70 percent of insurers report that their companies are on the journey to digitally transform their infrastructure, according to Ensono and Forrester. Those who don’t understand the impact these technologies have – or who don’t figure it out soon — will be left behind.

Unless you have the proper resources to improve the customer and agent experience through digital transformation, you’ll be weeded out down the line. Carriers and agents should be looking to InsurTech firms for ideas and partnerships — rather than viewing them as a threat — in their journeys to digital transformation.

What will AI change in the insurance industry?

AI’s data digestion capabilities will impact many aspects of the insurance industry, but for now, the one with the most potential is customer acquisition. While customer acquisition was formerly a cumbersome and shot-in-the-dark practice, AI allows insurers to serve customers in a much more educated fashion.

Currently, the industry widely relies on cold calling to make connections with new prospects. Thanks to AI, carriers and InsurTech firms will have the opportunity to more strategically target customers during the prospecting stage.

Here’s why: Customers use multiple channels to research and understand their options when buying insurance. They just don’t walk into an agent’s office or wait for a cold call. The industry needs to take that into greater account as we adjust our client acquisition approaches to take advantage of more sophisticated tools. The good news is that AI makes that easier to do, as it frees up agents’ time by automating simple service tasks and allowing them to focus on advising customers about their insurance coverage.

It’s also important to remember that insurance isn’t the full extent of your product; you’re actually selling the customer experience. This is true of all industries. For example, when you buy a flight, the product is not just transportation from point A to point B — it’s the simplicity of the airline’s online reservation system, the helpfulness of the call center if you need to change the flight, and the service you receive from the flight attendants and gate agents. AI’s capabilities will make the experiential aspects easier to optimize.

We’re focusing on predictions of how many jobs AI will kill when we should be strategizing how to use AI to improve the industry. AI is a friend of insurance and the customer experience our industry will offer. If carriers and insurers drag their feet on the path to implementation, they’ll be left behind in the dust of digital transformation. Conversely, if they hop aboard, they’ll see their investments pay big dividends.

Jeff Somers is president at Insureon. He can be contacted through LinkedIn.

The opinions expressed here are the writer’s own.

See also:

9 ways insurers can drive more value from technology investments

5 ways AI and data are transforming the insurance space

How artificial intelligence will affect the P&C insurance industry