The insurance industry has only begun its foray into AI, and companies are already experimenting with new ways to incorporate it into their day-to-day operations in anticipation of further technological development.
“It’s the very early days of AI,” Breen said. “For menial, repetitive tasks, we put the computer on it … but we’re a ways away from a computer underwriter. We’re really just augmenting humans at this point.”
That’s still a significant change in the industry, he said. Underwriters at Argo Digital are now beginning to manage portfolios, rather than review every single submission. The more standard, predictable claims are handled by machine learning algorithms, Breen said, and the human underwriter is essentially fine-tuning the entire process and intervening in cases that need higher-order decision-making.
Pogreb sees even more potential for streamlining the underwriting process. She expects that the number of applications a human underwriter will be required to handle will significantly drop as machine learning makes even more of a foray into the insurance industry.
“We believe with technology and machine learning, a lot of [human underwriting] can be done away with,” Pogreb said. “The percentage of insurance applications that require human touch will go down dramatically, maybe 80 to 90 percent, and even to low single digits.”
While adoption of AI has come in rudimentary ways, it’s already drastically changing the lay of the land. Insurance companies that want to stay competitive should begin testing the waters of AI, Wolanow said.
“Companies can prepare and stay competitive by starting to assess the impact of machine learning on their business by prototyping their own algorithms,” Wolanow said. “An individual machine learning algorithm that performs its analysis on a stand-alone basis is actually quite inexpensive, [and] in many cases, a stand-alone analysis tool is more than fit for purpose.”