Throughout human history, automation has served to save time and effort otherwise devoted to manual labor. In ancient times, scribes would interpret laws and write them down by hand to preserve them. Banks had entire staffs of accountants devoted to the manual reconciliation of spreadsheets.
Such manual labor tends to be repetitive, and humans become bored and make mistakes. Now, these tasks are performed more quickly, accurately, and efficiently by computers.
Faulty judgment calls
However, there’s a drawback to artificial intelligence (AI): it’s weak on making judgment calls in certain instances.
For example, in 2014, the city of Sydney, Australia, experienced a shooting and hostage situation. Several people requested Uber to take them to safety. However, Uber’s algorithms didn’t account for the chaos and danger to customers; all the algorithms “knew” was that demand was rising significantly. With increased demand, Uber automatically raised prices, and the perception was that it was taking advantage of the situation. Users were livid.
The lesson? Artificial intelligence is great, but human intelligence is superior—and necessary—because it can make judgments.
Insurers rely on data and analytics to help them mitigate risk, project future losses, and set premiums. Much of that information is delivered automatically, and insurers use intelligent software to process it.
The rise of straight-through processing is connecting various systems, tools, and methodologies and making things even smoother, faster, and more efficient. But our team of field analysts regularly encounters risks that would go undetected if not for human observation.
Importance of human intelligence
Our analysts know firsthand the importance of human intelligence. One analyst recently took a photo of an electrical box that he encountered on a routine inspection of a commercial property. The overloaded breakers, nonstandard fuses, and missing panel cover constitute a significant hazard that needs mitigation. Would intelligent software warn you about a risk like this? Probably not. That’s why on-site field inspections are crucial.
A proven approach for commercial insurers is to conduct in-person inspections to complete the picture provided by data, analytics, appropriate underwriting guidelines, and straight-through processing. We can’t abdicate human responsibility, because that’s where the best judgments and nuances in underwriting decisions often come from.
Take our survey featuring pictures of risks that our analysts have encountered in the field, and vote for what you think is the worst electrical risk shown. And for more information on ISO Survey Services, visit our website.
