Embracing a growth mindset and understanding how new disruptive technologies could change our industry are among the best strategies to prepare for the opportunities and challenges of the Fourth Industrial Revolution. I highlighted some of the new disruptive technologies in Part 1 and Part 2 of this blog series.
At Gen Re, we advise clients to routinely update their companies’ boards on how artificial intelligence (AI) advancements and collaborative robots are changing their clients’ industries and whether technology is replacing or complementing workplace activities.
What are some critical actions for evaluating AI and developing technologies?
1. Separate the hype from reality. The amount of information can be overwhelming for any CEO or board, so consider getting assistance from trusted advisers in tracking developments.
2. Focus on the core practices, processes, products and people at your customer organizations. Your policyholders’ employees can help you analyze which industries in their portfolio are most vulnerable to automation within the next five years. If a critical assessment reveals that a significant part is susceptible to obsolescence, examine whether product development, market expansion or new partnerships can provide a buffer for anticipated premium or market share loss.
See also: Welcome to the Robot Revolution
3. Don’t overlook your own underwriting and claim operations. Can you use AI to improve your own underwriting results or identify creeping catastrophic claims? Having a work culture that encourages a growth mindset and embraces new technology is essential.
4. Critically track and examine the legal and regulatory issues that can slow the adoption of AI, robotics and automation. While AI technology continues moving forward, many legal and ethical questions surrounding this technology remain unanswered. Driverless technology provides one pressing example for insurers. As Warren Buffett commented at the 2017 Berkshire Hathaway annual meeting, “If driverless cars became pervasive, it would only be because they were safer,” which would mean that “the overall economic cost of auto-related losses had gone down and that would drive down the premiums" for insurance companies. We do not know when driverless technology will be widely adopted, but we know that now is the time to prepare for its impact on auto, umbrella and workers’ comp portfolios.
5. Don’t wait. It is not too soon to start the journey toward understanding the impact and possibilities of AI, robotics and automation. Ignoring the trend can be costly regardless of what lines of insurance you write.
See also: Succeeding in the Digital Revolution
