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Insurance firm to replace human workers with AI system

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Re: Insurance firm to replace human workers with AI system

#11

Post by tkyjonathan »

bryanrasmussen wrote: post #4
mooreds wrote: post #2

I 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.

I thought the studies showed that changing habits and implementing massive software systems tend to fail?

Maybe if the software system relies on humans in some degree..

Re: Insurance firm to replace human workers with AI system

#12

Post by bryanrasmussen »

mooreds wrote: post #8
bryanrasmussen wrote: post #4

Earlier quoted context omitted.

I thought the studies showed that changing habits and implementing massive software systems tend to fail?

Ha, 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.

probably just my having soaked in the conventional wisdom, looked around quickly found the following 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.

Re: Insurance firm to replace human workers with AI system

#14

Post by mSparks »

bryanrasmussen wrote: post #4
mooreds wrote: post #2

I 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.

I thought the studies showed that changing habits and implementing massive software systems tend to fail?

such 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.

Re: Insurance firm to replace human workers with AI system

#15

Post by new299 »

I 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.

Re: Insurance firm to replace human workers with AI system

#16

Post by [deleted] »

new299 wrote: post #15

I 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]

Re: Insurance firm to replace human workers with AI system

#17

Post by patio11 »

nikanj wrote: post #9

Feels 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.

This 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.

Re: Insurance firm to replace human workers with AI system

#18

Post by rasz_pl »

new299 wrote: post #15

I 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.

This is a non story because insurance (and banking) replaced human workers with expert systems a looong time ago.

Re: Insurance firm to replace human workers with AI system

#19

Post by cmdrfred »

patio11 wrote: post #17
nikanj wrote: post #9

Feels 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.

This 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 lo…

Did 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.
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