Why Insurance Robots Should Not Scare You

I am an insurance nerd.  I realized this over a beer with a fellow insurance nerd.  Most people would have a beer and talk about sports or vacation or family.  The insurance broker and I were talking about insurance and technology.  

Since launching Riskgenius, I have been identifying more insurance nerds.  Take, for instance, Tony Canas.  He's a self identified insurance nerd: his blog is called Insurance Nerd.  Tony and I have both been ruminating on similar topics.  He wrote a blog post about Uber and insurance.  And, he has been thinking about how technology will help or hurt insurance professionals.  In his article The Coming Robopocalypse of Knowledge Jobs, Canas states: 

This is truly scary stuff, McKinsey  predicts that by 2025 this kind of technology will take over tasks currently performed by hundreds of millions of knowledge workers. This is no longer science fiction.

Canas' article asks one central question: is technology going to destroy the insurance industry?

I believe the answer is no.  I can justify this belief through the deep thinking of two brilliant business people. 

First, I will start with Paypal founder Peter Thiel.  In his book Zero to One, he states: 

People have intentionality -- we form plans and make decisions in complicated situations.  We're less good at making sense of enormous amounts of data.  Computers are exactly the opposite: they excel at efficient data processing, but they struggle to make basic judgements that would be simple for any human. 

Now couple that with the brilliant musings of John Maroff, NY times technology journalist.  In an interview, Maroff makes two key points.  First, he believes that technological developments are slowing down.  The perceived Robopocalypse is not close to reality.  Artificial intelligence has not made any quantum leaps in the last fifty years.    

My second takeaway from Maroff's interview is more important.  Knowledge worker jobs that are eliminated will be replaced by new knowledge worker jobs.  Maroff dissects the classic Instragram-Kodak example to make his point: 

The classic example is that almost everybody cites this apparent juxtaposition of Instagram—thirteen programmers taking out a giant corporation, Kodak, with 140,000 workers. In fact, that's not what happened at all. For one thing, Kodak wasn't killed by Instagram. Kodak was a company that put a gun to its head and pulled the trigger multiple times until it was dead. It just made all kinds of strategic blunders. The simplest evidence of that is its competitor, Fuji, which did very well across this chasm of the Internet. The deeper thought is that Instagram, as a new?age photo sharing system, couldn't exist until the modern Internet was built, and that probably created somewhere between 2.5 and 5 million jobs, and made them good jobs. The notion that Instagram killed both Kodak and the jobs is just fundamentally wrong.   

So what does this mean for the insurance industry?  Insurance technology is coming but it won't work without insurance professionals.  Insurance technology can glean new insights from piles of data.  But insurance professionals must understand and communicate these insights to customers.  Only insurance professionals will be able to convert insights into new products.  

Many of the insurance professionals that I meet aren't scared of technology.  They are ready; they want to leverage technology.  If you are one of these insurance "nerds," please let me know.  I want to connect with you.  I want to hear your ideas.  You can email me at [email protected].  Tell me your insurance nerd story.  

Insurance nerds unite!  

If you liked this article, you should subscribe to the Riskgenius Insights Newsletter. It's a secret club for Insurance Nerds and Risk Geniuses.