Chapter 10:
Higher Levels of AI Investment and Adoption
As we’ve established, there are varying degrees of AI within InsurTech solutions. In the last chapter, we discussed how companies across the property insurance ecosphere can make lower-level investments in AI.
CoreLogic solutions contain both lower and higher degrees of AI so that organizations across the property insurance ecosphere have a wide spectrum of innovative options for their digital strategies. CoreLogic’s goal for innovation is to integrate AI-powered features that are broadly impactful, yet specific enough to meet each organization's unique requirements.
What Is a Higher Degree of AI?
When a company adopts AI to a higher degree, the technology will have a direct impact on its customers. In these higher-level AI investment scenarios, the technology plays a more active role in the user’s decision-making.
These days, AI with the absolute highest degree of risk would be considered “human-out-of-the-loop." This is when a human does not monitor the machine and cannot directly override decisions made by AI technology. Instead, “the machine makes every decision, and the human intervenes only by setting new constraints and objectives. Improvement is also an automated closed loop. Adjustments, based on feedback from humans, are automated.”[25]
More common higher-risk AI models, though, are considered "human-on-the-loop." In these models, the AI software makes most of the decisions, and human users ideally only interfere with workflows when they disagree with a decision, or if the AI has failed.
Even though human intervention is possible—and often required by companies for consistent oversight—these “human-on-the-loop” AI models involve a level of risk that lighter-degree AI models do not. After all, humans are just humans at the end of the day. And for a company to produce any fail-proof system using a "human-on-the loop" AI tool, humans must pay constant attention to the operations.
[25] https://hbr.org/2021/11/managing-ai-decision-making-tools
Leveraging AI to a Higher Degree in the Property Insurance World
Technology with higher degrees of AI will not involve as much human interaction as lower-degree AI technologies. It can make determinations and decisions on its own. As a result, it is important for programmers teach the AI with an unbiased, comprehensive set of data. In turn, AI will come as close as possible to making objective decisions based on all the right criteria.
Still, it is impossible for any AI to be perfect. No AI model is accurate 100% of the time. In the property insurance industry, where the regulatory environment is complex, companies that leverage AI should involve humans in the decision-making process—even companies that leverage technology with higher degrees of AI. When AI makes a determination, a human should monitor the effects at a macrolevel and have process and capacity to intervene when adjustments need to be made. And remember: AI cannot replace process where legal and regulatory requirements are in effect.
The Value of High AI Adoption
The higher the degree of AI—or investment in the technology—the greater the potential for future-proofing an organization at a transformational level.
With successful higher degrees of AI adoption, companies not only shorten project lifecycles, eliminate manual processes, and make better data-driven decisions, but they also have the greatest opportunity to establish and execute a strategy to thrive. When you incorporate certain forms of AI into your workflows, business planning is no longer limited to solvency; instead, it is about increasing high-quality, effectual output at a time when that’s needed by more policyholders than ever before.
With high-level adoption, then, AI becomes more than serving your existing customers with the highest quality of service and empowers you to take on more policyholders and deliver personalized, omnichannel experiences in their greatest times of need.
A Responsible Approach to Higher Degrees of AI Adoption
Working with the right vendors and partners alleviates the pressures that come with higher investments in technology and organizational change. When implementing AI, it is essential to work with a vendor you can trust to put ethical AI at the forefront of your plans for innovation.
With this goal in mind, a partner like CoreLogic that keeps ethical AI as part of its innovation mission, is ideal for a property insurance ecosphere member looking to accelerate or intensify its digital transformation.
Success with AI comes with the understanding that humans should never be entirely removed from any part of the business, especially not a company whose sole purpose is to restore peoples’ assets and lives following catastrophe.
The key to success with any degree of AI is to find a partner willing to look outside the box and help you determine the right blend of AI- and human driven business processes and workflows. Your company must choose partners—vendor, implementation, and others—that are constantly questioning, “What adjustments can we make to this ecosystem to make it better while remaining ethical?”