Japanese insurance firm replaces human staff with AI

Japanese insurance firm replaces human staff with AI | Insurance Business

Japanese insurance firm replaces human staff with AI
A Japanese insurance company is replacing 34 human workers with an artificial intelligence (AI) system in hopes of raising productivity by 30 per cent.

Thirty-four human workers at the Fukoku Mutual Life Insurance will be made redundant as the company is set to implement, on 29 January, a system based on IBM's Watson Explorer technology to determine the company's insurance payouts, ABC reported.

The 34 employees, most on five-year contracts, will lose their jobs by the end of March.

Fukoku said it hoped the move would increase company productivity by 30 per cent — although human staff will continue to handle final payments, the report said.

The cognitive technology will cost Fukoku Life $2.36 million for its installation and some $177,000 in yearly maintenance fees, but will save the insurer about $1.65 million on employee salaries once the system is implemented. This means Fukoku Life will get a return on its investment in less than two years, ABC reported.

Other Japanese companies are already using similar technology — Dai-ichi Life Insurance uses a Watson system for processing payment assessments, while Nippon Life Insurance recently began using an AI system for analysing the best coverage plans for individual customers.

With AI and robots starting to take over the workplace, the World Economic Forum predicted that AI will result to a net loss of 5.1 million jobs over five years in 15 of the world's leading economies.

Jon Williams, an analyst with PwC, urged Australian governments to prepare for the big changes robots and AI will bring to the workforce.

"I think over the next couple of years, governments have to develop policies that allow them to support the development of new jobs and new industries or we'll see what we saw in the recent US election, where there's a huge disaffected group whose job in a factory disappeared and they haven't been able to replace it,” he said. "The next five to 10 years will see jobs in the professions — in medicine, in the legal profession, in professional services — starting to be replaced by computers and robots and machine learning."

In a statement, IBM Australia said Watson was already being used in many industries, saying: "We believe that in the future, every decision that mankind makes is going to be informed by a system like Watson," ABC reported.

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