Is the Insurance Sector Risking Over-Reliance on Artificial Intelligence? Part One

Originally published by FinTech Times on March 31, 2024.

FinTech Times convened insurance and technology leaders to examine whether the sector risks becoming overly dependent on artificial intelligence. The consensus: AI should augment rather than replace human judgment, particularly as the technology remains in its early stages.

Geoff Andrews, chief operating officer at Carpe Data, emphasized that insurers are still determining optimal AI applications. "Insurance has always had to adapt to changing market conditions and human behaviour, but rarely has it adapted fast, " Andrews noted. He highlighted efficiency and accuracy as the strongest current use cases, pointing to underwriting automation and claims monitoring as prime examples. "Done right, AI will enhance 'human-in-the-loop' processes but never entirely replace them, " he explained. "People should be the brain and AI the engine, automating repetitive tasks and organising data-driven insights so people can make more confident decisions with better context."

Other contributors stressed that machine learning requires experienced data scientists to structure and deploy data effectively within regulatory frameworks. Several experts challenged the notion of over-reliance, arguing the insurance industry remains appropriately cautious given data privacy concerns and the technology's nascent state. They pointed to specific applications where AI delivers measurable value: streamlining underwriting processes, reducing claims processing time from weeks to near real-time, and improving fraud detection.

Multiple respondents acknowledged customer concerns about losing human interaction, with research showing 30 percent worry about diminished personal contact and 43 percent distrust AI decision-making. The prevailing view positions AI as a productivity multiplier that frees insurance professionals to handle complex cases requiring empathy and nuanced judgment, rather than a wholesale replacement for human expertise.

Read the full article at FinTech Times.