The protection industry “must avoid the temptation to rely solely on technology outputs” as artificial intelligence technology develops, Swiss Re's chief underwriting officer, Gianfranco Lot, argued.
Lot warned there “must be a balance between artificial and human intelligence” when it comes to underwriters and that it is vital to “challenge and validate” the outputs from AI-driven algorithms with their own experience.
He added, while technology can automate routine administrative tasks and augment underwriters’ ability to assess risks “it remains a tool, not a silver bullet”.
One issue with the over-reliance on technology Lot identified was AI hallucinations which, he warned, can fabricate information and deliver false information, potentially leading to poor underwriting decisions and liability claims.
Another problem is the issue of biases which, he argued, can lead to repeated poor decisions.
He added: "If a client wants to restructure a portfolio to improve performance or add a new distribution channel, human conversations needs to happen first.
“Without the human factor, it is difficult to really understand intentions and understand how we can help clients through capacity or with other solutions.”
AI benefits
However, Lot highlighted the benefits of AI, adding the increased use of data and technology in underwriting is already positive.
One such benefit he identified was being able to use more accurate, forward looking models rather than purely relying on historical data.
Furthermore, in the claims space, the industry is using AI-driven tools to provide natural catastrophe loss assessment data to clients.
The biggest opportunity identified by Lot is for companies like Swiss Re to use its aggregated global view on risk to deliver unique insights on their clients.
He said this will enable them to either navigate risks better or identify areas to grow their businesses.
tom.dunstan@ft.com
What's your view?
Have your say in the comments section below or email us: ftadviser.newsdesk@ft.com
