Since the creation of the very first life insurance policy, mankind has needed human life insurance agents. Otherwise, who else would sell policies and lead and assist policy holders? And the life insurance industry has done well and managed to get by this way. Until now, that is.
As technology continues to advance at staggering rates, more and more companies are looking to implement technology in order to cut costs. The replacement of human workers in favor of robots or technology is nothing new, as several fast food chains and manufacturers have been practicing this for years. However, “white collar” companies have never really dealt with this situation before. But a Japanese company looks to change that.
Fukoku Mutual, a Japanese insurance company, will be implementing artificial intelligence into its insurance claim department this month. In doing so, the company will be replacing 34 of its human workers. According to the company’s official press release, Fukoku will be using IBM’s Watson Explorer A.I. in order to analyze various documents, such as hospital records, in order to determine insurance payouts. When determining these payouts, the AI will factor in medical histories, injuries and other details in order to ensure complete accuracy.
Installing the system will cost $1.7 million (200 million yen), with an additional $128 thousand per year for maintenance. While this may not sound cost effective at first, it will supposedly save the company an estimated $1.1 million dollars in salary costs each year. Fukoku also hopes to see a 30% increase in productivity through IBM’s A.I.
What does this mean for other insurance companies, or other businesses in different industries? According to a report from Engadget, almost half of the jobs in Japan could be performed by a robot by 2035, with the US and UK not far behind at 47% and 35% respectively. While the report is only hypothetical, the numbers are still alarming. If this transition from human insurance workers to artificial intelligence proves successful, saving Fukoku Mutual the amount it expects while outperforming its human counterparts, other companies may very well take notice. And, once that happens, it can spread like wildfire reaching other countries around the globe.
Could this spell doom for the life insurance agent? Only time will tell, but I will continue to update this story as it develops.