With artificial intelligence becoming increasingly influential in the insurance industry, is it time for insurers to appoint executives to steer their long-term AI strategy?
Darien Acosta (pictured), Cover Whale’s chief AI officer, would say so.
“CTOs (chief technology officers) weren’t a thing thirty years ago, prior to the internet. But now every company needs a CTO” he told Insurance Business in an interview. “But now, every company needs a CTO.”
Billed as the insurance industry’s first chief AI officer, Acosta has been charged with leading the AI transformation within Cover Whale, a commercial trucking insurance provider and fast-growing insurtech based in New York.
Previously Cover Whale’s head of data analytics, Acosta will pursue the rapid adoption of AI and machine learning (ML) functions across Cover Whale to generate custom solutions for thousands of partner insurance agents and policyholders.
For Acosta, AI is emerging as a new pillar for businesses in the same way that the internet and its offshoot technologies did decades ago.
“[AI] needs to be led in a separate but different way because it has its own rules, processes, and means of doing things,” he said.
Cover Whale currently uses leverages AI and ML to power its driver safety program, which provides dash cam telematics and real-time driver coaching for truckers. CEO Dan Abrahamsen has said the company is doubling down on its existing AI efforts and building an AI-first company.
“You would consider Cover Whale a tech-first company,” Acosta said. “We think about how to build software to automate processes or produce value for our carriers, agents, and insureds.
“But what’s beyond being tech-first? It’s being ‘AI-first.’ So, how do we utilize AI technology to point us to the right direction, to do some of the work for us while we pick up the baton along the way?”
To become AI-first, however, organizations need to be comfortable with AI technology being central to its culture. For this reason, Acosta said, he’s not keen to view AI as co-pilot.
“A co-pilot suggests that you have a partner who's going to take the wheel if you need to take a nap,” Acosta said.
“They’re kind of guiding you, but more as equals. I think of AI more like a Sherpa while you’re climbing Mount Everest.”
The Sherpa is the expert who has better skills and abilities than you do, he explained, and whether a company summits its Everest depends on the capabilities of its AI.
In Cover Whale’s case, being a newer company has made the expedition easier.
“What makes Cover Whale interesting is that it's a fairly new company operating as an MGA (managing general agent),” Acosta said. “Normally, a company would need to build new processes and hire many different specialists to accommodate growth and scale. But with an AI-first mentality, we can be more efficient with our resource allocation.”
The impressive rise of ChatGPT has shown the mainstream public how rapidly AI develop to generate human-like conversation. But isn’t it still true that humans are still better, and AI is only a tool at best?
“I think that's true for now, but this technology is progressing exponentially,” Acosta said. “No expert on earth thought we would be at the point we are now, where if I give a few bullet points to an LLM (large language model), it will write a book for me, and that book might be interesting to read. That was inconceivable six to eight months ago, and that’s now the reality we’re living in.
“I do think at the current moment in time, humans are better at a lot of different things. But where are we going to be in 10 years?”
While neither humans nor AI can see the future, Acosta has a good idea of what the next few years of AI will hold.
“The next two to three years will be all about automating processes that humans don't want do or are not good at,” the chief AI officer said. “And even if humans are good at it, AI could do it faster, even if it can’t do it as well sometimes.”
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