AI technology can do wonders for the insurance industry – Should you be terrified?

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Artificial intelligence tech is already being used for many purposes, but there are issues to consider.

AI technology has been a central tech focus for the insurance industry for several years. The advantages it promises both currently and as we move into the future. However, these advantages aren’t without their drawbacks.

Security and adoption remain considerable concerns, said a panel of experts at an I.I.I. event.

At the recent Insurance Information Institute (I.I.I.) Joint Industry Forum which took place in New York, a panel of tech and insurance industry executives discussed the subject of AI technology. The executives talked about how promising this technology is when it comes to its capabilities both currently and moving forward. However, the top issues they discussed regarding artificial intelligence tech have to do with adoption and security.

“I’m a full believer in the enablement of our industry and the role that technology is now playing, particularly AI and big data,” said Groundspeed Analytics Inc. co-CEO Andrew Robinson. Robinson left a career of many years in the insurance industry “to join an early-stage insuretech company because I saw the great potential technology offered.”

Execs acknowledge that tech alone, even AI technology, is not a solution to all insurance issues.

The executives at the events agree that there are many challenges faced by the insurance industry. Technology all on its own is not the solution to all those issues, said Chubb Ltd executive vice president, chief digital officer and chief risk officer Sean Ringsted.

“For me and Chubb, we couldn’t be more excited about the possibility of AI and big data and how it can be a force for good,” said Ringsted. That said, he also pointed out that there were caveats to this statement, according to a Business Insurance report. “It’s not going to do everything by itself; you’ve got to bring other technologies and capabilities to bear on that,” he explained, also pointing out that the insurance industry will always require a “human touch”.

This belief is only underscored by recent studies conducted by reputable and respected organizations such as J.D. Power. That firm’s managing director of global insurance practice, Kyle Schmitt stated that while customers and clients are engaged by technology, concerns remain. He identified the two primary areas of concern for customers, which are the data, and the algorithms processing that data.

Schmitt pointed out that while customers are willing to share their data, trust starts to waver when they begin thinking of the way it is used by insurance technology algorithms. They question the ability of computers to make appropriate and secure decisions – which is a core component of what AI technology has to provide.

According to Verisk Analytics vice president of product development, James Roche, “I think what’s important is, as we develop AI systems, we develop them in a way that lends itself to fair outcomes.” Roche believes that if the AI AI Technology - Brain Think - Artificial Intelligencetechnology is properly developed for fairness, consumers will accept it. To that, Schmitt agreed, stating that “Customers actually want to participate,” and “They just want ground rules.”

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