Japanese Insurance Company to Replace Claim Reps with Artificial Intelligence System

01.10.2017


By: Robert Wilson

A Japanese insurance company is about to thrust the insurance industry into the future, as well as the ongoing debate over how much technology will really alter our industry.

I’ve spent a good deal of time this past year discussing the future of workers’ compensation at conference presentations around the nation. Obviously, technology is a big part of those discussions. I always caution my audiences that there is plenty of room for error when opining on what the future may hold for us. It has been my position that quite often futurists fail to properly anticipate what I call the “human factor”; while they may properly grasp technological potential, they cannot predict how societal changes will affect the future they see. This is best represented in a short video I use when opening these presentations.

Made in the 1950’s, the video attempts to show what the “kitchen of the future” will look like. By today’s standards it is quaint, if not downright funny. While a couple of the technology changes they saw have come to fruition (looking up recipes on a video screen), the expectations of the producers did not account for any societal shift beyond what existed in the era when it was created. The narrator speaks of kitchens “made for big gals and little gals”, and “Momma will feel like a fairy princess. You won’t be able to get her out of the kitchen”. While they were singularly focused on the technology quotient, they were completely blind to the fact that most women would not be housewives in 50 years.

The debate on the “human factor”; including our willingness to accept certain changes brought by technology, continues today.

In 2015 I spoke at a conference produced by the Idaho industrial Commission. The morning Keynote for the event was noted cost control expert and blogging pioneer Tom Lynch, of Lynch Ryan’s Workers’ Comp Insider. Lynch covered the development and advancement of Artificial Intelligence Machines, and boldly predicted that, within a very few years, workers’ compensation claims professionals would be replaced by “IBM Watson Style AI computers”, which would be capable of processing thousands of claims per hour, “flawlessly”. I have quoted Lynch regularly in my presentations, but have also been open about my hesitance to accept his full and unvarnished vision. I am not yet convinced that handing the reigns of life altering decisions over to artificial intelligence will be a successful endeavor. I am not at all certain that the “human factor” – the ability for society to accept this level of automation, is yet prepared for such a change.

I freely admit I could be wrong, and Lynch could be completely right. Now, thanks to Japanese carrier Fukoku Mutual Life Insurance, we are about to find out.

Fukoku is replacing 34 employees with a system that is based on IBM’s Watson Explorer. It is said that the system “possesses cognitive technology that can think like a human”, and will “analyze and interpret all of [their] data, including unstructured text, images, audio and video”. It will be able to read “tens of thousands of medical certificates and factor in the length of hospital stays, medical histories and any surgical procedures before calculating payouts”.

The company believes the move will increase productivity by 30% and provide them a full return on investment in less than two years.

This is all happening by the end of March.

Fukoku is saying that final payments will not be issued until the results are reviewed and approved by a human associate. For now, anyway.

The move shows that, at least for the short term, Lynch was right. How it plays out in the longer scheme of things will tell us if, when, and how far the technology could advance. One thing is clear; artificial intelligence is going to change the way we work. People need to be prepared for transformation, and develop specialized skills and services to maintain their viability in an increasingly tech dominant world.

The debate has been ongoing, but we now have an actual specimen to study. The results will be fascinating to watch, regardless of the outcome.

The foregoing was originally published on Bob's Cluttered Desk Blog and is reproduced here with permission of the author. No further republication is permitted without the author’s consent.

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