Technology is changing the landscape of the insurance industry. There’s a new facial recognition software that analyzes how well a candidate for life insurance will age. Facial recognition technology already promises to prevent fraud and crime at ATMs and self-checkout counters. Emotion recognition technology holds the promise of preventing insurance fraud by building upon facial recognition. It could help agents recognize a person’s emotional state based on voice signals and word usage. These tools may help agents and carriers measure risk while better serving consumers but are also creating some anxiety about whether robots will soon replace insurance agents.
Some of us in the insurance business remember the days when carriers relied on an agent’s gut feeling when it came time to determine risk based on personal knowledge or predictions. Many things have changed since then. Not only do carriers have far more precise, sophisticated predictive models, but they also no longer allow agents to deviate from set pricing.
While there isn’t much insurers can do about technology pushing price as the bottom line, they can and are using some tools to their advantage. For instance, 2017 McKinsey research suggested that automation could reduce the cost of a claims journey by as much as 30%. Technology can also prevent challenges like cybersecurity threats through accurate predictions. Chatbots are assisting customers on a 24/7 basis at many businesses, which could increase customer retention. But this all leads to the question: How can an agent compete with the new technology? Can the two co-exist in the future?
According to U.K.-based firm Autonomous Research, AI and machine learning could replace over $1 trillion of the current financial services cost structure. And let’s be clear: The savings would likely largely be attributed to displaced jobs. Why shouldn’t insurance agents worry, then, with predictions that around 2.5 million financial jobs will be gone by the year 2033?
In the heyday of the neighborhood brick-and-mortar insurance shop, agents were the face and brand of an insurance company. While agents continue to interact with clients via phone, in person and over the internet, carriers are experimenting with technology to increase direct interaction with clients. Insurance carriers are already working with SmartFinancial. Many businesses are also using technology to enhance the quality of insurance jobs. In fact, according to Deloitte’s 2017 white paper, the insurance industry is lagging behind compared with banking and financial services in its adoption of automation. Only recently have insurers begun looking to explore the benefits of robotics and AI. However, that does not mean that agents will not still be needed in the future. Robotics and AI, more than anything, could automate transactions and processes like claims processing and document verification. Consumers could see more options for self-service, and over time, this will create less of a need for back-office jobs. On the flip side, there will be a greater demand for agents with skills in data analytics and machine learning.