Chapter 9:
A Lighter Degree of AI Investment and Adoption
With the right strategy and proper execution, the benefits of AI will supersede the challenges associated with putting it in place.
Determining the degree of AI and the types of technologies that are optimal for your business is a big part of the battle. You'll have these answers after analyzing your organization’s needs and risk tolerance.
Human insight will always be needed, regardless of the level of investment in AI.
A company's AI technology options are dependent on a company's level of AI investment.
For this ebook, we will classify these levels of investment into two different categories: lower-level investment—and thus a lower degree of AI technology adoption—and higher-level investment—adopting AI technologies that more directly impact your policyholders and customers.
Here, the term “investment” refers to both time and money. For example, the higher the degree to which AI plays a role in your digital ecosystem, the more likely it will be that a higher financial investment will be required. Higher levels of AI will also require programmers and other professionals to spend more time training and preparing the AI models to work autonomously.
What is a “Lower-Level Investment” in AI?
Even though a lower-level investment in AI translates to tools that don’t necessarily have the most sophisticated functionalities, technology with lighter degrees of AI still brings unquestionable benefits to an organization.
Low-degree AI adoption involves AI where humans are “in the loop.”[23]
According to Harvard Business Review, “Human-in-the-loop (HITL)” AI models involve humans making decisions with the machine “providing only decision support or partial automation of some decisions, or parts of decisions.”[24]
A human is still unquestionably involved.
These AI solutions are designed to make users more efficient in their day-to-day operations, thus indirectly benefiting customers—or policyholders. in our case.
AI technology that involves a lower investment is more of a value-add and is not designed to take over a function previously performed entirely by humans.
Pursuing AI to the lightest degree means using the machine for decision support and not for decision-making.
[24] https://hbr.org/2021/11/managing-ai-decision-making-tools
Lower investment AI is more of a “value-add" and not designed to directly impact humans.
How to Pursue a Lighter Degree of AI Integration
“Lower-risk” AI tools are often primarily designed to optimize workflows. They are either reactive machines that don’t make their own decisions independent of humans or they are limited memory machines that make predictions, but not decisions.
For example, machine learning models are based on the finite data they were trained on, enabling them to make precise predictions—such as suggesting the next element in a workflow sequence—but their predictive output still requires human validation for a final decision.
These AI solutions are incredibly useful by shortening and streamlining workflows to eliminate administrative tasks for professionals. As a result, users of these tools can spend more time making the strategic decisions for which humans are best equipped.
A lower level of investment in AI will often involve “human-in-the-loop” tools, which provide suggestions to users based on the data they process. Still, the machine cannot independently take any definitive action—a human command is always required.
These HITL technologies would include solutions that provide data to users, which then allow the human users to make their own determinations based on the data automatically provided to them. Or, another example of more narrow AI would be chatbots that answer basic customer questions.
In short, lower-level AI requires more human oversight because the machines are incapable of making independent decisions.
The upside of implementing these limited, HITL AI solutions is that there are fewer questions around them pushing compliance boundaries.
Even Smaller Investments in AI Bring High Value to Property Insurance
Like anything that brings value to an organization, there will be risks with any level of AI investment. A lighter investment in AI is a great foray into AI for organizations that are hesitant about more robust, sophisticated intelligent technologies that will have a direct impact on customers.