In her latest missive, Inga Beale explains why it's time to befriend the technology disrupting our industry-¦
The robots are coming to steal our jobs!" Headlines like these are increasingly popping up in the media, accompanying almost daily reports on the latest developments in artificial intelligence, robotics and data analytics and their advance on our workplaces.
None of us, it seems, are immune to digital disruption. Last year, Stephen Hawking, the physicist, said he thinks artificial intelligence will eventually end up becoming so advanced that it will outperform humans and become a new form of life.
Who knows whether that will play out or not (I hope not!) but dig beneath the headlines and a more nuanced story emerges.
An MGI Research study on the automation potential of the global economy found the proportion of occupations that can be fully automated using current working technology is actually less than 5%.
The research also found that about 60% of all jobs have at least 30% of activities that are technically automatable, based on current working technologies.
Parts of the insurance profession are perhaps more vulnerable than most. We have already seen technology driving distribution in areas like home and car insurance, where brokers used to dominate. Other areas will surely be impacted soon.
Type '100 jobs most at risk from being replaced by robots' into Google and you'll find a list in which insurance underwriters are in the top 10, with a 99% probability of being replaced -- that's what I started out as in the 1980s so it's a sobering thought. There are others such as claims and policy processing clerks, as well as brokerage clerks, with a 98% probability of being replaced. Personal financial advisers though are at only a 58% probability.
It's clear that automation will deliver higher productivity and therefore greater economic growth, along with increased efficiency, safety and convenience. That means there will be an impact on jobs.
What is unclear, and what the headlines don't capture, is whether the impact on jobs will be negative or positive. Yes, technology is replacing some jobs, but it's also creating new jobs.
A 2011 study by McKinsey showed that the internet had destroyed 500,000 jobs in France in the previous 15 years, but during the same time period had created 1.2 million new ones. That means that for every job destroyed, another 2.4 were created.
What additional jobs could be created by new technology in insurance?
Data analysts will be in high demand as increasingly huge amounts of data are used to create bespoke insurance policies. Customer services departments will grow as insurers provide more tailored services in more areas of their clients' lives. The need for risk mitigation expertise will increase as customers seek to reduce risk in return for lower premiums. Image analysts and drone pilots will be employed by claims functions as technology in this area improves and speed of payment becomes an increasingly important competitive difference.
These are just some of the possibilities but the point is: change is coming.
Whichever part of the business model it impacts, automation will transform the way we work and the way we interact with our customers. In doing so, it will present us with new opportunities -- so let's take advantage of them and be bold and befriend technology.
With the right mindset, we can provide all of our people with the right skills to make our profession fit for the future.
Dame Inga Beale ACII, President, CII