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Insurance firm to replace human workers with AI system
- mooreds 10y agoI would love a 6 month or 1 year follow up story on the success or failure of such initiatives. Hearing about the plans of a company to implement a massive software system that affects core business processes is akin to hearing about the plans of someone to change a habit--things often work out as planned, but also can fail miserably.
- davidgerard 10y agoc.f. blockchain initiatives. All the announcements get wide publicity, their failure or quiet scrapping much more rarely.
- bernardlunn 10y agoYes, but it is like a VC portfolio, the payoff on the few that get to prime time is huge
- bryanrasmussen 10y agoI thought the studies showed that changing habits and implementing massive software systems tend to fail?
- bernardlunn 10y agoChanging habits work when it is done in lots of small steps. Like run 5 mins longer each day. Enterprise systems are like saying, next year I will run a marathon.
- TeMPOraL 10y agoAnd halfway through, it suddenly is swimming and not a marathon, you need to wear a tie, and whether you'll be racing in water or in lava is to be decided in the future.
- mooreds 10y agoHa, I guess I was giving the benefit of the doubt. Certainly you hear more about the failures, but that be because they get better press. Not sure about any studies, would love to see a link or two if you have them lying around.
- bryanrasmussen 10y agoprobably just my having soaked in the conventional wisdom, looked around quickly found the following http://www.umsl.edu/~sauterv/analysis/6840_f03_papers/frese/ http://www.umsl.edu/~sauterv/analysis/6840_f03_papers/frese/ quotes: At companies that aren’t among the top 25% of technology users, three out of 10 IT projects fail on average. AND On average, about 70% of all IT-related projects fail to meet their objectives.” In this case Lewis includes not only projects that were abandoned (failed), but also those that were defectively completed due to cost overruns, time overruns, or did not provide all of the functionality that was originally promised. The difference between failure in the two quotes is that the first one seems to consider failure as just abandoned completely as being unachievable. Whereas the second also considers failure as not having achieved all goals. It seems to me that if the project is big and central enough to a company's processes that it might be worth betting against the survival of that company.
- tkyjonathan 10y agoMaybe if the software system relies on humans in some degree..
- mSparks 10y agosuch studies inevitably biased to find failures tho. successes rarely get written up. so finding details on them is much harder. also depends what you mean by fail. if fail means "ran over budget and hit loads of unexpected problems" then yeah, most probably do "fail". if fail means "shut down prematurly and abandoned without hope" then afaik, your only really talking about stuff by google and microsoft. most other software houses would fail with their software. and plenty are still arond from the 90s. intel. ibm. apple... not so much real fail, for example.
- baboun 10y agohello 2017
- nikanj 10y agoFeels like many insurance companies have replaced humans with a simple printf("No payout"). They only pay in the rare case when someone manages to raise a social media shitstorm.
- mooreds 10y agoI have had good luck with complaining to my local health insurance regulator.
- patio11 10y agoThis is believed by many people on HN. It's false. A thing you might find useful to look at: loss ratios. Loss ratio is industry jargon for claims paid plus claims-related expense over premium income. GEICO's, for example, is 82.1: for every $1 in premium they take in, they pay 82 cents in claims. The industry is regulated to a degree that few are, in both the US and Japan (and many, many other countries). If your loss ratio is too low, your friendly neighborhood insurance regulator will not look favorably upon that fact.
- cmdrfred 10y agoDid you know the original model for insurance was to get a loan for enough to cover your clients losses and charge them premiums enough to cover the cases where a payout is required plus the interest on the loan? To make a profit you would invest a portion of that capitol as not everyone's house will burn down at the same time. That all changed in 1945 when The McCarran-Ferguson Act exempted insurance companies from antitrust law and then companies began sharing information to set prices, now they make around 20% profit on the premiums as well as you cited.
- zaque1213 10y agoNot according to the loss runs I see at the insurance firm I work for.
- drcross 10y agoI have the feeling that before we put the support systems in place for universal healthcare that you'll need a Phd to have a janitors job, and be thankful at that.
- new299 10y agoI have no information on this, but the cynic in me thinks this is likely a total non-story/spin. I find it unlikely anyone would be so confident a AI system that they are "planning to introduce" that they'd schedule staff cuts. What's more likely is that staff cuts were already planned. This puts a great spin on a (I would guess most likely free/cheap) experimental deployment of Watson.
- deleted 10y ago[deleted]
- rasz_pl 10y agoThis is a non story because insurance (and banking) replaced human workers with expert systems a looong time ago.
- ecopoesis 10y agoThat's just not true. Source: my sister is a commercial underwriter at a large US insurance company. And while they do have software that gives a suggestion for a premium, it does not know enough to be accurate, so she has to always adjust it. This is definitely an industry where more automation could easily be done, but the big insurers are a conservative, risk adverse group.
- viewer5 10y ago> it does not know enough to be accurate, so she has to always adjust it What kind of stuff does it miss?
- ecopoesis 10y agoMarket stuff, like how the companies entire book is doing (what losses they've had so far that year), regional balancing, past payouts to the insured, raising or lowering the overall risk of the book, and just plain sales (sometimes you have to take on more risk then you'd like to meet a sales quota, but you can balance that by making other lower risk clients pay more). It's also complicated because it's hard to model buildings correctly. My sister likes to tell a story about a total loss she had for a standard masonry building with sprinklers. From her point of view, this is the perfect type of building. They're hard to catch on fire, and if there is a fire, the building puts it out. At worse, your damage is limited to the one room or section where the fire was, since the internal masonry walls keep it from spreading. This building burnt down because the solar panels on the roof caught fire, which spread across all the panel over the entire roof. The sprinklers never got a chance to go off because the roof collapsed. It's certainly possible to model this one case, but the problem is there are a million one off cases like this, and we don't know about them until there's a loss. Right now, human intuition from the underwriters and inspectors is what they use to cover try to cover the gap.
- noisy_boy 10y agoI wonder how long before somebody in the US senate introduces law(s) designed to regulate impact of AI on human employment.
- bawana 10y agowhy can't we get AI to replace some of our government? Maybe our elected officials wont be saying stupid things? Maybe lobbyists wont be able to buy influence?
- maverick_iceman 10y agoWe'll use Bernie Sanders and Ted Cruz as training set.
- nvartolomei 10y agoSomehow related: http://qz.com/799816/dutch-bank-ing-is-replacing-5800-people-with-machines-at-a-cost-of-2-billion/ http://qz.com/799816/dutch-bank-ing-is-replacing-5800-people...
- bkor 10y agoThat's not AI, that's automation and improving their systems combined with cutting the number of branches (as people do more online vs needing going to a branch)
- amelius 10y agoI'm wondering what jobs, according to people on HN, are most likely to be replaced by AI in the coming years.
- SomeStupidPoint 10y agoDrivers, factory/warehouse workers (ongoing), clerks (ongoing), and secretaries. And Im in the crowd that doesn't think we'll see it replace all jobs in a field -- just 60-90% of them, which causes major labor problems when talking about common jobs.
- amelius 10y agoBut some jobs can perhaps be replaced by "lower-education" jobs. As a (perhaps contrived) example, family doctors could be replaced by lab workers, who take simple measurements, feed them into a computer, and the AI does the rest (i.e., correlating conditions to a large number of existing patient files, and hence referring patients to specialists).
- SomeStupidPoint 10y agoTo use your example: Suppose right now, we have 1 doctor, 1 nurse, and 3 lab techs per 50 patients per day. I think technology generally lets us do the same job with just 2 nurses and 1 lab tech. So we lose 40% of the jobs from the higher paying side and probably more like 50-75% of the pay. In less contrived examples, I think we lose a lot of the jobs in the 25th-75th percentile range, which is the middle classes. So it's not that we see no jobs, it's that we see bad jobs and the elites. The middle gets automated out, and it's starting to be faster than people can retrain.
- avz 10y ago> Suppose right now, we have 1 doctor, 1 nurse, and 3 lab techs per 50 patients per day. I think technology generally lets us do the same job with just 2 nurses and 1 lab tech. So we lose 40% of the jobs from the higher paying side and probably more like 50-75% of the pay. You're making the extreme assumption that the amount of medical care demanded remains constant despite the fall in prices (e.g. employees: 5->3, patients: 50->50). An alternative extreme is that employment remains fixed while falling prices improve accessibility (e.g. employees: 5->5, patients: 50->90). In reality we may easily end up somewhere in between (e.g. employees: 5->4, patients: 50->70). This also highlights two aspects of automation: on the dark side, it reduces demand for work, on the bright side it improves availability (here, of medical care). If as a society we're able to deal with the former (e.g. by conjuring up new occupations) we stand to improve our future significantly through the latter.
- ensiferum 10y agoGreat news for the stockholders!
- LoSboccacc 10y agoTraining output set: Denied Denied Denied Denied Denied Denied ...
- dclowd9901 10y agoWith AI starting to actually supplant jobs, something sad has just occurred to me: I foresee our (the US) government (and probably others) restricting the development and deployment of AI systems that would supplant human jobs, merely for the sake of ensuring people are employed. I think it's sad because it would present a real opportunity to advance our society significantly.
- maverick_iceman 10y agoBased on our past history it seems unlikely to happen. Any country which institutes such policies risks falling behind. Also who wants to be branded a Luddite?
- ryanx435 10y agoThe lesson you should be taking away from the luddites is not just that they didn't foresee that there were long term benefits to the technology, but that they violently opposed the progress. The potential for violence is the lesson. Get rI'd of large portions of the popukation's means of making a living by replacing their jobs with ai and there will be violence. The process of replacing jobs with ai needs to go slow enough that the risk of large scale violence is minimized
- congerous 10y agoWatson doesn't work. This is more IBM spin coming out via clients who want to prove to themselves that their millions of dollars weren't wasted.
- goda90 10y agoMy wife was working for an insurance company until September. Despite being one of the most efficient workers, and having full time coworkers retire, she remained a temp her whole time there. In fact, they stopped hiring full time for many positions because new software systems were in the works. Software devs occasionally came and shadowed my wife to see how things worked. I secretly hope their profits have been hurt by treating employees like they're disposable, but I doubt it...
- nikolay 10y ago10 years ago we put on the market a fully automated subprime mortgage loan underwriting system, guess which was the most frequently requested feature - manual overriding (exceptions)!