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 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 in a net loss of 5.1 million jobs over five years in 15 of the world's leading economies, ABC reported.

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