Is Artificial Intelligence the future of employment?

It’s really nice to not have to make decisions all the time. In fact, the more you can automate, the more you can concentrate on the things that are really important to you. And there’s nothing wrong with that. Since the Jetsons (but probably long before that) the human race has dreamed about getting robots to do all their hard work while they sit back and relax. Slowly, but surely, that’s happening. But it may not be what everyone ultimately desires.

In the financial services space, and insurance in particular, there has been an uptick in activity in the Artificial Intelligence (AI) space. AI helps Axa’s product ‘fizzy’, to determine whether it should pay a customer out for a delayed flight, while some predict that AI will soon help to underwrite marine risks.

Insurer Tapoly recently revealed that it is also using AI to make it easier for its customers (short-term freelance contract workers and small medium sized entrepreneurs) to apply for ‘on demand’ insurance. AI effectively gives it the ability to create a 24 hour insurance broker service without the need for human intervention.

But now AI is helping asset management companies to pick stocks too. Just this month, Aberdeen Standard Investments announced that it has launched a new fund that utilises machine learning to identify sources of potential returns.

The Aberdeen Global (AG) Artificial Intelligence Global Equity SICAV, launched in Luxembourg, is the product of a collaboration between Aberdeen Standard Investments’ Quantitative Investment Strategies (QIS) team and Mitsubishi UFJ Trust Investment Technology Institute (MTEC)/Mitsubishi UFJ Trust and Banking Corporation (the Trust Bank) in Tokyo, Japan – a centre of excellence in robotics, artificial intelligence and financial technology.

The Fund embeds machine learning techniques within the investment process and will use a variety of quantitative techniques to time its investments. These investments will be based on  ‘factor premia’ – those sources of risk such as value, quality, momentum, small size and low volatility that can provide investors with persistent risk-adjusted excess returns said Aberdeen.

Recently Aon referred to AI as the ‘new electricity’ in its Global Insurance Market Report and there’s no reason why it shouldn’t be referred to as such. AI really has the ability to transform lives, not just for customers but for businesses too.

As Accenture puts it in its ‘Realizing the full value of AI in Insurance’ report, it will enable collaboration while also providing cost savings and growth. “Insurance company employees on the other hand expect AI to create opportunities for them and to improve their work-life balance,” adds Accenture in its report.

So what, if anything, is holding the industry back? Well, according to Accenture, only 1 in 4 employees is willing to work with AI. The company is therefore encouraging insurance companies to start planning and developing the workforce for the future as it looks like AI is here to stay. The benefits appear to be real and tangible. Accenture further highlights that insurers that invest in AI and human-machine collaboration at the same rate as top-performing businesses could boost their revenue by an average 17% and their employment by 7% by 2022.

Perhaps employees are reluctant to work with AI as they fear that it could replace them. Machines have after all taken over a lot of the tasks that humans and animals have done before. We’ve gone through several industrial revolutions and every time the result is the same – things have improved thanks to technology and humans have the ability to work smarter instead of harder.

It’s understandable that there is this fear that jobs are under threat. These fears could be misplaced, however, as it could in fact offer the opposite – more employment prospects! But as we’ve seen in previous generations these jobs may not have yet been created so it’s hard to know exactly what’s on offer when the positions haven’t even been created. But in spite of all of that AI, and the prospects that it could provide, should not be feared but embraced.