Recent studies have fuelled fears that insurance professionals will eventually lose their jobs to robots. Earlier this week, new findings reported by an Oxford University director revealed that underwriters face the highest risk of being automated among middle-income jobs.
In January, a Japanese insurer made headlines worldwide after it laid off over 30 claims staff and replaced them with an AI system. In the same month, consultancy firm Accenture released a report which showed that 74% of customers worldwide would get robo-advice and services for insurance, although two-thirds of consumers still want human interaction.
Should these developments alarm insurance brokers and advisors? Could they, too, be replaced by robots?
For commercial insurance broker Konsileo, the answer is both in the affirmative and in the negative. The tech start-up pointed at another recent study – this time from the McKinsey Global Institute – which revealed that the finance and insurance sectors have an overall automation potential of 43%. The research, however, explored the impact of artificial intelligence on employment by looking at job tasks rather than job roles across all industries.
“The short summary of their work is that true relationship-based interactions will continue to need people but that back office administration and simple transactional stuff will be done by robots,” Konsileo founder John Warburton told Insurance Business.
Warburton and his company have teamed up with accounting firm PKF and the Chartered Insurance Institute to work on a major report and to try to understand the implications of automation for insurance broking.
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“Our view is that it is indeed likely that much of consumer-based insurance advice will become automated, fundamentally because it’s not that complex and self-serve works well. This will also be true for micro-SMEs,” Warburton said.
“For larger SMEs and corporates, we feel that the role of the broker/advisor will continue because the advice itself is both more complex and more valued and because the risks and costs of self-serve are higher for customers.”
Warburton stressed the need for brokers to change their processes to save back office time and differentiate.
“We feel that brokers need to fundamentally change their processes to either become commodity transactional enablers, giving robo-advice but perhaps with manual intervention at some very high impact ‘moments of truth’, or become true advice based organisations,” he said.
“The latter will apply in much of commercial lines but broking firms will need to start to look a lot more like the professional services firms they aspire to be and less like processing factories.”
Brokers also need to develop differentiated services, including digital services, even for their advisory clients, Warburton added.
“Technology will be key to this and having a proprietary technology advantage is likely to become increasingly important.”