In Japan, an insurance company has laid off a number of people, replacing them with an AI system.
In a move that sounds as though it was plucked straight out of a science fiction novel, a Japanese insurer has used AI insurance technology to replace 34 human staff members.
The company has started laying off its employees who have been replaced with an artificial intelligence system.
The company in question is Fukoku Mutual Life Insurance. The employees were replaced by the insurance technology which is capable of calculating insurance payouts on its own. The insurer has stated that it feels productivity will increase by 30 percent as a result of the removal of the humans in favor of the AI.
The system will be installed before January comes to a close. The insurance company predicts that it will save approximately $1.2 million in annual salaries as a result of the system. The system itself cost $1.71 million. Beyond the initial purchase price, the system will also cost around $130,000 per year to maintain.
This insurance technology system is based on IBM Japan Ltd’s Watson artificial intelligence.
IBM refers to Watson as its “cognitive technology that can think like a human.” That AI tech can “analyze and interpret all of your data, including unstructured text, images, audio and video.”
That said, Fukoku Mutual will be using the artificial intelligence in order to obtain the necessary information for processing claim payouts for policyholders. This will include reading surgery data, hospital stay records and medical certificates.
Japanese media outlets have also reported that there are three other insurance companies in the country already considering the use of AI systems. This could be used for the same purpose as Fukoku Mutual, but there may be other applications as well. They may include tasks such as assisting customers in finding the ideal plans for their coverage needs and budget.
A World Economic Forum study from 2016 predicted that robots and AI systems will lead to 5.1 million job losses in the 15 most powerful countries (nations that make up about 65 percent of the total global workforce) over the next five years. This includes uses in insurance technology as well as other industries.