AI has arrived in Insurance
Insurance is on the cusp of a complete transformation at the hands of Artificial Intelligence.
Once an industry run by brokers, underwriters, and actuaries, insurance is transforming into an industry run on the back of AI models in areas like underwriting, claims routing, and dynamic pricing.
Consumers are naturally wary of having a service as important as insurance being influenced by machine learning rather than what they're used to - talking to their trusted insurance agent. Trust is of paramount importance when deploying AI that impacts people's lives, and this may prove to be a sticking point for the adoption of AI in insurance.
If AI-based insurers can't prove to their customers that they're making the robustness of their AI a priority, perhaps consumers will reject AI-augmented insurance and instead stick with the traditional model. The recent furor around a Twitter thread describing how Lemonade, a leading insurtech company, uses AI throughout their customer experience demonstrates just how fragile public opinion is when it comes to Artificial Intelligence.
How Insurance Industry Leaders are using AI
Robust Intelligence's partner, Masashi Namatame, the Group Chief Digital Officer at Tokio Marine, one of the largest insurance groups in Japan, gave us his perspective on the AI transformation in insurance.
We covered three main topics:
- How are you deploying AI to help your customers?
- Why is it so important for you to invest in secure and trustworthy AI?
- Why did the RIME platform resonate with you?
1. How are you deploying AI to help your customers?
Tokio Marine deploys AI across a broad range of applications, with the ultimate outcome of enhancing their customer experience.
- Tokio Marine leverages AI to assess images of damage to validate repair shops' decisions to repair damaged cars or simply replace damaged areas with spare parts. Importantly, the AI model can detect fraud based on prior learned cases.
- As the largest property and casualty insurance group in Japan, Tokio Marine is exposed to massive risk due to Japan's hurricanes and other natural disasters. To counter this, Tokio Marine has deployed AI models which quickly and accurately forecast the expected damages from these events.
- Tokio Marine has leveled up their customer experience by using AI to route and sort incoming calls via an AI voice recognition system. This helps solve one of the most painful parts of any customer experience - getting support when something goes wrong.
- Accenture reported in their 2020 Technology Vision for Insurance, that Metlife has similarly used AI to reduce claims turnaround time from 12 days to 15 minutes using AI augmentation for their case managers.
- Tokio Marine uses recommendation engines to provide targeted, relevant product recommendations to their customers to allow them to quickly find the insurance products that are most relevant to them. These recommendations are based on AI profile learnings.
2. Why is it critical for you to invest in secure and trustworthy AI?
The Tokio Marine team is embracing AI to build the next generation of insurance and recognizes that if this is to be successful, building and maintaining their customers' trust has to be a central focus at all times. Investing in secure and trustworthy AI gives customers the peace of mind that everything has been done to make these AI models as robust and secure as possible.
Tokio Marine highlighted two specific areas where secure, trustworthy AI is critical, Customer Service and Risk and Pricing.
- As previously mentioned, Tokio Marine is leveraging AI to improve the quality of service received by Tokio Marine customers, whether they are purchasing insurance or making a claim.
- Protecting the customer experience from malfunctioning AI systems is critical to maintaining the quality of service expected from the largest property and casualty insurance group in Japan. Even something as simple as a temporarily broken data pipeline could cause thousands of customers to have a bad experience.
Risk and Pricing
- AI is core to the accurate analysis of risk and pricing of insurance for Tokio Marine. As any insurance professional knows, effective pricing of risk is essential for any insurance business. Accordingly, AI failures like bugs, edge cases, and data drift in an AI risk pricing model are unacceptable in this mission-critical application of AI.
- Falling foul of these risks would have massive impacts on both Tokio Marine and their customers. For example, if their AI models were silently mispricing insurance premiums due to a broken data pipeline that went unnoticed. Trustworthiness in AI is critical to make Tokio Marine's business sustainable and valuable for their customers.
3. Why did Robust Intelligence's solution resonate with you?
Tokio Marine has recognized the value in the vision put forward by Robust Intelligence - that every AI system should be stress-tested and monitored as rigorously as any piece of production quality software. As Tokio Marine's business becomes increasingly integrated with AI, the more dangerous AI vulnerability is to the business.
There is a growing general awareness of the need to secure AI models that are making decisions for us, but this is especially critical at industry-leading insurance companies like Tokio Marine, where the adoption of AI has already begun in earnest.
In the words of Masashi Namatame, Group Chief Digital Officer, at Tokio Marine:
Robust Intelligence provides unique and unparalleled services to identify and assess the vulnerabilities of AI, which are otherwise very hard to recognize.
Secure AI for Insurance
Insurance is on the precipice of widespread adoption of AI. The same Accenture report stated that 76% of insurance executives say "the stakes for innovation have never been higher" and "getting it right will require new ways of innovating with ecosystem partners and third-party organizations."
At Robust Intelligence, we envision a future for AI in insurance where trust and security are top priorities, just as they are at Tokio Marine. When AI-driven decisions impact people's financial wellbeing, the trust and security of that AI must be at the forefront of everyone's mind.
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