Insurance firm to replace human workers with AI system

http://mainichi.jp/english/articles/20161230/p2a/00m/0na/005000c

by sjreese • 10 years ago

127 69 10 years ago

mooreds3• 10 years ago

I would love a 6 month or 1 year follow up story on the success or failure of such initiatives. Hearing about the plans of a company to implement a massive software system that affects core business processes is akin to hearing about the plans of someone to change a habit--things often work out as planned, but also can fail miserably.

davidgerard• 10 years ago

c.f. blockchain initiatives. All the announcements get wide publicity, their failure or quiet scrapping much more rarely.

bernardlunn2• 10 years ago

Yes, but it is like a VC portfolio, the payoff on the few that get to prime time is huge

bryanrasmussen2• 10 years ago

I thought the studies showed that changing habits and implementing massive software systems tend to fail?

bernardlunn2• 10 years ago

Changing habits work when it is done in lots of small steps. Like run 5 mins longer each day. Enterprise systems are like saying, next year I will run a marathon.

mooreds3• 10 years ago

Ha, I guess I was giving the benefit of the doubt.

Certainly you hear more about the failures, but that be because they get better press. Not sure about any studies, would love to see a link or two if you have them lying around.

tkyjonathan• 10 years ago

Maybe if the software system relies on humans in some degree..

mSparks• 10 years ago

such studies inevitably biased to find failures tho.

successes rarely get written up. so finding details on them is much harder.

also depends what you mean by fail.

if fail means "ran over budget and hit loads of unexpected problems" then yeah, most probably do "fail".

if fail means "shut down prematurly and abandoned without hope" then afaik, your only really talking about stuff by google and microsoft. most other software houses would fail with their software. and plenty are still arond from the 90s.

intel. ibm. apple... not so much real fail, for example.

baboun• 10 years ago

hello 2017

nikanj• 10 years ago

Feels like many insurance companies have replaced humans with a simple printf("No payout"). They only pay in the rare case when someone manages to raise a social media shitstorm.

mooreds3• 10 years ago

I have had good luck with complaining to my local health insurance regulator.

patio11• 10 years ago

This is believed by many people on HN. It's false.

A thing you might find useful to look at: loss ratios. Loss ratio is industry jargon for claims paid plus claims-related expense over premium income. GEICO's, for example, is 82.1: for every $1 in premium they take in, they pay 82 cents in claims.

The industry is regulated to a degree that few are, in both the US and Japan (and many, many other countries). If your loss ratio is too low, your friendly neighborhood insurance regulator will not look favorably upon that fact.

cmdrfred• 10 years ago

Did you know the original model for insurance was to get a loan for enough to cover your clients losses and charge them premiums enough to cover the cases where a payout is required plus the interest on the loan? To make a profit you would invest a portion of that capitol as not everyone's house will burn down at the same time. That all changed in 1945 when The McCarran-Ferguson Act exempted insurance companies from antitrust law and then companies began sharing information to set prices, now they make around 20% profit on the premiums as well as you cited.

zaque1213• 10 years ago

Not according to the loss runs I see at the insurance firm I work for.

drcross• 10 years ago

I have the feeling that before we put the support systems in place for universal healthcare that you'll need a Phd to have a janitors job, and be thankful at that.

new299• 10 years ago

I have no information on this, but the cynic in me thinks this is likely a total non-story/spin. I find it unlikely anyone would be so confident a AI system that they are "planning to introduce" that they'd schedule staff cuts.

What's more likely is that staff cuts were already planned. This puts a great spin on a (I would guess most likely free/cheap) experimental deployment of Watson.

rasz_pl• 10 years ago

This is a non story because insurance (and banking) replaced human workers with expert systems a looong time ago.

ecopoesis3• 10 years ago

That's just not true. Source: my sister is a commercial underwriter at a large US insurance company. And while they do have software that gives a suggestion for a premium, it does not know enough to be accurate, so she has to always adjust it.

This is definitely an industry where more automation could easily be done, but the big insurers are a conservative, risk adverse group.

dosomeresearch• 10 years ago

This is a very ambitious attempt to replace complex and messy human powered business workflows with an AI system. Most current business uses of "AI" tackle tightly defined problems, like assigning invoices to a certain group, filtering out spam etc. Even if the implementation is successful, they will still have to retain quite a few people to deal with exceptions generated by the automated process.

isoos• 10 years ago

Having seen how these expert systems are created, replacement is way overdue. For example a team of 10 "senior mortgage professional" spend weeks of figuring out what difference it makes if the co-applicant's age is 60 or 62. They argue, and arrive to a conclusion that it increases the risk by 0.01 (whatever).

Event the simplest logistic regression training + evaluation will provide value to most insurance, mortgage or other money-related decision/"expert" systems.

_0w8t• 10 years ago

A friend told me about s Russia bank that tried to use true AI system. After initial precise results on the rate of defaults after one year they have to scrap it and went back to using logical regression with heavy human reviews. The biggest problem was that when AI errored, the errors were huge with no way to know what caused them.

charlieflowers2• 10 years ago

I only skimmed, but it indicated that 34% of a pool of ("primarily") 47 workers would be replaced.

So ... 16 employees. I suppose that's interesting, but it's not as big as the headline made me believe.

halflings• 10 years ago

That's not what the article is saying. It says 34 employees (not 34%) primarily from a pool of 47 workers on 5-year contracts will be "made redundant". (the rest may not have their contracts renewed) That's more than 30% of the 131 employees.

The article also cites other companies doing the same thing, even if no staff cuts are involved for now.

dclowd99012• 10 years ago

It sounds like they're replacing the adjusters, which I thought was a pretty unstructured aspect of insurance claim management. _That_ was the big story to me. Seems we're all closer to becoming redundant than we thought.

noisy_boy• 10 years ago

I wonder how long before somebody in the US senate introduces law(s) designed to regulate impact of AI on human employment.

bawana• 10 years ago

why can't we get AI to replace some of our government? Maybe our elected officials wont be saying stupid things? Maybe lobbyists wont be able to buy influence?

maverick_iceman2• 10 years ago

We'll use Bernie Sanders and Ted Cruz as training set.

nvartolomei• 10 years ago

bkor• 10 years ago

That's not AI, that's automation and improving their systems combined with cutting the number of branches (as people do more online vs needing going to a branch)

amelius2• 10 years ago

I'm wondering what jobs, according to people on HN, are most likely to be replaced by AI in the coming years.

SomeStupidPoint3• 10 years ago

Drivers, factory/warehouse workers (ongoing), clerks (ongoing), and secretaries.

And Im in the crowd that doesn't think we'll see it replace all jobs in a field -- just 60-90% of them, which causes major labor problems when talking about common jobs.

amelius2• 10 years ago

But some jobs can perhaps be replaced by "lower-education" jobs.

As a (perhaps contrived) example, family doctors could be replaced by lab workers, who take simple measurements, feed them into a computer, and the AI does the rest (i.e., correlating conditions to a large number of existing patient files, and hence referring patients to specialists).

eksemplar• 10 years ago

Almost everything. I work in digitization in the public sector and there are almost no business processes which can't be improved or turned into a self-service with minimum supervision and we've been doing it for a while now.

The reason it has been going on without anyone really noticing is because very few people get fired because of it. The real effect has been on a slow down in new hires as people retire.

The reason for this is that whatever efficiency you free up isn't directly tied to a single job function. Say you do a self-service system for handling employee transport costs. This might free up an entire job function worth of hours in a HR department, but they are coming from 6 different employees. Doesn't lead to anyone being fired, but eventually you'll automate enough systems that someone retiring won't need to be replaced.

Programming isn't even a safe zone. I mean, think about how much time you save by using things like modern frameworks and the interconnectivity of everything and then compare that to how it was 25 years ago.

empath752• 10 years ago

On what time scale? Eventually, all of them.

rokosbasilisk• 10 years ago

Expect a lot of doctors to be replaced especially for disease diagnosis.

ensiferum• 10 years ago

Great news for the stockholders!

LoSboccacc• 10 years ago

Training output set:

Denied

...

dclowd99012• 10 years ago

With AI starting to actually supplant jobs, something sad has just occurred to me:

I foresee our (the US) government (and probably others) restricting the development and deployment of AI systems that would supplant human jobs, merely for the sake of ensuring people are employed.

I think it's sad because it would present a real opportunity to advance our society significantly.

maverick_iceman2• 10 years ago

Based on our past history it seems unlikely to happen. Any country which institutes such policies risks falling behind. Also who wants to be branded a Luddite?

ryanx435• 10 years ago

The lesson you should be taking away from the luddites is not just that they didn't foresee that there were long term benefits to the technology, but that they violently opposed the progress. The potential for violence is the lesson. Get rI'd of large portions of the popukation's means of making a living by replacing their jobs with ai and there will be violence.

The process of replacing jobs with ai needs to go slow enough that the risk of large scale violence is minimized

congerous• 10 years ago

Watson doesn't work. This is more IBM spin coming out via clients who want to prove to themselves that their millions of dollars weren't wasted.

goda90• 10 years ago

My wife was working for an insurance company until September. Despite being one of the most efficient workers, and having full time coworkers retire, she remained a temp her whole time there. In fact, they stopped hiring full time for many positions because new software systems were in the works. Software devs occasionally came and shadowed my wife to see how things worked. I secretly hope their profits have been hurt by treating employees like they're disposable, but I doubt it...

nikolay• 10 years ago

10 years ago we put on the market a fully automated subprime mortgage loan underwriting system, guess which was the most frequently requested feature - manual overriding (exceptions)!

Insurance firm to replace human workers with AI system

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