We can see it coming — very incrementally at first. Then there will be large disruptions. That is how the workers’ compensation field will enter into the age of artificial intelligence.
The potential of AI for our industry includes computers that learn largely by themselves, reaching into immense databases, to perform complex tasks in claims and underwriting.
The timing is uncertain, but we can discern early signals today. Crawford has intensified automation of claims. Employers Insurance, which focuses on the small business market, has launched an insurer (Cerity) which uses computers to perform virtually all policy administration functions. Clara Analytics offers a system which automatically aggregates all digital and scanned claims data and predicts costs, litigation and other variables.
And, the emerging leaders in our industry are children of the computer age. They are better prepared. Tomorrow’s top leaders have radically different experience compared to today’s leaders. We need to better understand the impact of generations.
Today’s top leaders in many workers’ comp organizations are Baby Boomers. They are about to retire – perhaps be pushed out. Baby Boomers (I am using Pew Research’s classifications) were born between 1946 and 1964. Their median age today is 64. A person of that age used a slide rule in physics in high school during the internal combustion age. She learned Microsoft Office during her late 30s and her 40s. She started to use a smart phone in her 50s. And now she likely is puzzled and hesitant about the next stages of automation.
Most of today’s C suite occupants, however, are probably Generation Xers. Born between 1965 and 1980, their median age today is 47. The more quantitative ones used Excel in college, if not already in high school. They bought their first smart phone in their 30s. A relative handful are experienced in programming. (My three children, all Generation Xers, learned to program in their 30s or 40s).
When Generation Xers entered the workforce, corporate computer systems were handing to employees much more processing power and, for their time, better digital tools. What happened? Greatly reduced use of paper files, cycles of system improvements, and reduced training budgets.
Steve Hiller, of The Hiller Group executive search firm for the property/casualty industry, tells me that today a claims adjuster can transition from one claims payer to another and quickly learn a new claims system because the designs have become so compatible. At the operational level in claims, he says, computer-based work is highly routinized across the industry and that affects staff recruitment.
But at the highest level jobs, more far vision is demanded than compliance, more flexibility than routine. Who will fill these jobs in the next decade, when opportunities to deploy artificial intelligence will proliferate in our industry?
Today’s C-suite will be occupied in the future by Millennials, born between 1981 and 1996. Their median age is 31. They grew up with electronic games, powerful graphics, the internet, and cell phones. Social media are natural to them. A sizable share of them learned some basic programming at school. Many have friends who program. And they can expect that any entry white collar job for them may require a high level of comfort with analytics and ease in relying on smart phones and digital messaging.
I have conversed recently with some 50 individuals from many walks of life, in each of these three generations. They are all college graduates and in middle class jobs. I found, to my surprise, that the generations have similar experiences with computers. A majority of them buy consumer goods on the internet, which rose from nothing in the past 20 years. A majority enjoy social networking on the internet, which rose from nothing in the past 15 years. Many have some misgivings. And almost all feel queasy about computer security and privacy. But none are Luddites.
One striking thing is how intensely, for all generations, their work and personal lives have been affected, how strongly they feel about the increase in their personal productivity. This positive glow flows into their consumer lives, albeit not as glowingly. In sum, they say they have flourished, thanks to computers.
Millennials are native to today’s culture, not immigrants from the past. They are much more likely to select careers expressly tied to, even created by, computers.
For Millennials, a positive glow about personal productivity comes with direct experience with programming or with close friendships with others who program. Their greater comfort with computers will affect how they manage computer innovation.
I’m not referring to people who are according to official statistics in computer jobs. In 1990, the Bureau of Labor Statistics estimated for five computer-related jobs about 400,000 workers. Today, the Bureau counts close to four million workers in 10 job categories.
I am referring, rather, to non-computer specialists who are increasingly computer-savvy. They will move into the C suites. They will probably do a better job in picking which development projects to pursue. They will probably do better in keeping project costs and project risks low.
I’d like to talk with these Millennials about the future of workers’ comp.