What impact is automation having on insurance employment?

What impact is automation having on insurance employment? | Insurance Business

What impact is automation having on insurance employment?

Online streaming services ended the dominance of cable and satellite TV services, automated telephone systems have displaced receptionists, and fully autonomous cars threaten all sorts of commercial driving jobs.

In Ontario’s insurance sector though, the adoption of technology – think artificial intelligence, blockchain, and cloud services – hasn’t yet resulted in less jobs, according to a new report, “Better, Faster, Stronger: Maximizing the benefits of automation for Ontario’s firms and people,” from the Brookfield Institute for Innovation + Entrepreneurship.

One reason that employment in the province’s finance and insurance sector grew by 35% between 2002 and 2016, in spite of increasing developments in technology, is that adoption has generally lagged other sectors, though the report finds that’s changing. Another is that people are simply harder to replace.

“The technological possibilities of automating work even throughout most of the 20th century was to take something that was very routine, manual, and build a physical robot or piece of machinery that would take away some of the tasks that a worker would do,” said Sean Mullin, Brookfield’s executive director.

“A service sector job is more sophisticated – you have to deal with humans, you have to make more judgment calls, you have to assess financial records. Those are things that are only starting to become possible to do with recent advances in computational power, the introduction of very sophisticated algorithms, like deep learning.”

The insurance jobs with the highest risk of replacement by automation include agents, brokers, adjusters, and examiners – notable occupations because many insurance professionals do exactly these jobs – but Mullin is careful to note that doesn’t mean the jobs will cease to exist.

“What technology is probably going to do is not necessarily replace an entire job, but start to replace some of the tasks that people do. When you look at things like insurance agents and brokers, for example, a big chunk of matching people to insurance policies have started to be done online,” he explained. “So, potentially not entirely eliminating all of the components of those jobs, but suddenly you need less people doing those jobs because more of it is being done automatically or being done through software.”

It’s not all bad news. Yes, individual jobs might be at risk in some ways, but there’s much to be gained from automation, like keeping companies profitable and ironically, protecting jobs.

“Technology is all about improving the productivity of our economy, which ultimately results in greater wealth creation and higher standards of living,” Mullin told Insurance Business. “From a competitiveness perspective, if Canadian firms or Ontario firms in the finance and insurance [sectors] are not adopting this technology and their peers around the world are, that’s going to put them at a competitive disadvantage, and that means in the long run, jobs you might save by not automating may actually be at risk if the company itself becomes uncompetitive.”

 

Related stories:
Brokers offer value that cannot be digitized
Call for insurers to "directly control" self-driving cars