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Insurance Claim Adjusters Replaced By "IBM Watson Explorer"

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Manufacturing jobs have already been decimated by robots. White collar workers are next in line.

Fukoku Mutual Life Insurance in Japan is about to replace claim adjusters with a software robot from IBM.

Most of the attention around automation focuses on how factory robots and self-driving cars may fundamentally change our workforce, potentially eliminating millions of jobs. But AI that can handle knowledge-based, white-collar work are also becoming increasingly competent.

One Japanese insurance company, Fukoku Mutual Life Insurance, is reportedly replacing 34 human insurance claim workers with “IBM Watson Explorer,” starting by January 2017.

The AI will scan hospital records and other documents to determine insurance payouts, according to a company press release, factoring injuries, patient medical histories, and procedures administered. Automation of these research and data gathering tasks will help the remaining human workers process the final payout faster, the release says.

Fukoku Mutual will spend $1.7 million (200 million yen) to install the AI system, and $128,000 per year for maintenance, according to Japan’s The Mainichi. The company saves roughly $1.1 million per year on employee salaries by using the IBM software, meaning it hopes to see a return on the investment in less than two years.

Watson AI is expected to improve productivity by 30%, Fukoku Mutual says. The company was encouraged by its use of similar IBM technology to analyze customer’s voices during complaints. The software typically takes the customer’s words, converts them to text, and analyzes whether those words are positive or negative. Similar sentiment analysis software is also being used by a range of US companies for customer service; incidentally, a large benefit of the software is understanding when customers get frustrated with automated systems.

The Mainichi reports that three other Japanese insurance companies are testing or implementing AI systems to automate work such as finding ideal plans for customers. An Israeli insurance startup, Lemonade, has raised $60 million on the idea of “replacing brokers and paperwork with bots and machine learning,” says CEO Daniel Schreiber



So soon your insurance claim will be rejected by a real robot- not just some human acting like a robot.:D

I wonder what impact this might have on any disputes that  arise in insurance claims- would the fact that a machine provided the data that drove the decision make it easier or harder to argue a case either way?

My suspicion is that our tendancy to belive that computers are dispassionate and objective will make it harder to argue that a rejected claim happend for nefarious reasons- but of course any system will only return the outcomes it has been designed to deliver.

There's an interesting trend developing here in the white collar space wherein we have a human 'figurehead' fronting up the process, but the actual nuts and bolts analysis is being automated- I suppose the rational will be that the human still makes the final decision- but since that decision will be based on the machinations of the software it's not all that clear where the real power lies here- will those human leads really have any discretion- or is their role  simply  to provide some kind of legitimacy to outcomes that are in reality totally the province of the technology?

One final thought- in a future of automated cars and automated insurance claims adjusters one could imagine a scenario in which the vehicle itself provides the data that is then used to determine the outcome of any insurance claim- so the accident and any subsequent legal liabilites would in effect become one seamless process in which the need for an intermediary insurance company claims adjuster would in fact be redundant- the car itself would deterimine it's own liabilites in the event of a crash.


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I used to work for Norwich Union. The underwriters would use a computer program called Magnum to work out the rating for policies. Glorified data entry with a bit of analysis at the end.

 They never seemed to be at work - all gone by 4pm, long lunches etc. Maybe the company eventually realised it didn't need 8 underwriters to do the job that 2 underwriters and 2 computers could do. Lots of company-wide job cuts were announced around that time - 2008. Might be even worse now.

Edited by EnglishinWales

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